The guide, written by the FDF’s Sustainability Steering Group, sets out a step-by-step guide to help large-, medium- and small-scale food and drink manufacturers identify, prioritise and manage supply chain risks.
The not-for-profit sustainability organisation Forum for the Future welcomed the guide. Dan Crossley, its principal sustainability adviser, said it was critical that all food and drink companies understood supply chain risks and acted to mitigate them.
‘Understand the risks’
“The era of cheap oil, water and labour is over," he said. "So while, in the past, food businesses may have been able to get away with not having full grip of all their risks in the supply chain, that time has now gone. They have to be forward-looking. They have to understand their risks. And this guide is great place to start.”
All food business ultimately are fundamentally agricultural companies that rely on agricultural inputs, he said. “Even companies such as PepsiCo with multiple billion dollar brands, would not be a branded company if they did not have the raw materials to put on the shelves. That is the same for any food manufacturing company.”
Understanding the risks of sustainable sourcing was a critical first step before taking action to mitigate those risks. “All sustainability risks are ultimately business risks. When you are looking at security of supply, that is critical.”
Ian Bowles, head of sustainability at Premier Foods, said one of the objectives behind the plan was to try to provide guidance for small- and medium-scale enterprises, which do not have the resources of larger businesses, to develop sustainability programmes.
“A lot of small businesses are struggling at the moment and what is front of mind is keeping afloat. So it is not just about sustainability from an ethical or an environmental point of view, it is around financial sustainability as well to ensure you can keep your business running during these troubled economic times,” he said.
Andrew Kuyk, FDF director of sustainability said the initiative followed the organisation’s Every Last Drop campaign, which focused on saving water along the supply chain.
“At a time of diminishing resources, it makes good business sense for companies to look at what is required to produce the product and how they would manage if some resources were not available,” he said. While it was possible to gain early easy wins, it became progressively more difficult to meet sustainability challenges.
Recent severe weather at home and abroad had underlined the importance of managing risk in the supply chain, he said.
Woulter Van Tol, Nestlé head of sustainability and communications UK and Ireland, said it was important to start planning for the long-term now. “The cocoa plant has a 25-year life, so by planting varieties now that are more drought resistant, you are already managing your drought risk for 25 years’ time,” he said.
He also stressed that sustainability assessments should be a continuous process. “This is not a one-time process. You have to keep going back over the steps to reassess them. It’s a constant cycle of improvement.”
Meanwhile, next week Crossley is to take up the role of executive director of the Food Ethics Council.
Five-step sustainable sourcing guide
1) Map your supply chain: Collect information to describe your supply chain on a product basis.
2) Identify impacts, risks and opportunities: Understand the key risks and opportunities in your supply chain which may impact on resilience.
3) Assess and prioritise your findings: Analyse how your business can manage resilience-related risks to take advantage of opportunities.
4) Create a plan of action: Define a set of actions to reflect the risk and prioritise opportunities already established.
5) Implement, track, review and communicate: Ensure action is taken, progress tracked and communicated.