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Guest article

‘The pendulum is swinging towards in-house sustainable sourcing’

By Amarjit Sahota , 11-Sep-2017

Green & Black’s Velvet Edition bar. Picture: Green & Black’s.
Green & Black’s Velvet Edition bar. Picture: Green & Black’s.

‘One of the most difficult issues associated with sustainable sourcing is whether companies should adopt third party standards or develop in-house schemes.

Recent developments suggest the pendulum is swinging towards in-house sustainable sourcing schemes.

Cadbury’s Dairy Milk

 

Green & Black’s, the iconic ethical chocolate brand, has launched a Velvet Edition bar this month in the UK. It is its first product that is not certified organic and/or fairtrade.

The brand decided to source cocoa beans from the Dominican Republic according to its parent company’s Cocoa Life sustainability program.

Mondelēz Foods has already dropped fairtrade certification for its Cadbury’s Dairy Milk chocolate.

By 2019, all Cadbury’s chocolates in the UK and Ireland will carry the Cocoa Life logo.

Also in the UK, Sainsbury’s recently decided to drop fairtrade certification for its private label teas.

The second leading supermarket chain decided to work directly with African tea groups and co-operatives to develop its own ‘Fairly Traded’ scheme. 

Sainsbury’s is one of the largest retailers of fairtrade products in Europe, generating about €200m sales. 

There are concerns that its ‘fairly traded’ scheme will also be extended to its private label coffee, bananas, and other products. 

Sustainable Foods Summit

Ecovia Intelligence believes there are many benefits for large food companies and retailers to develop their own in-house sustainable sourcing schemes.

Apart from providing greater control and less bureaucracy, such schemes can be integrated into their wider sustainability programs.

As illustrated at the upcoming Sustainable Foods Summit, the number of third party standards or charters continues to grow, especially for single ingredients.

The Roundtable for Sustainable Palm Oil (RSPO) is highly established for palm oil. New sustainability roundtables have now been developed for soya beans, beef, cocoa and cotton.

New schemes are also emerging for non-agricultural commodities. For instance, the Responsible Mica Initiative was set up in February to ensure mica mineral is ethically sourced from mines in northern India.

With growing proliferation in sustainability standards, charters and similar schemes, it is not surprising companies are opting for in-house schemes.

The concern is that companies like Mondelēz Foods and Sainsbury’s are adopting third party standards as a ‘rite of passage’ into sustainable sourcing.

The knowledge and expertise gained is then used to develop their in-house sourcing programs which are not subject to the same scrutiny as independent schemes.

Sustainable coffee

Although critics question the commitment of large companies, Ecovia Intelligence believes a positive is that more raw materials are now sustainably sourced.

Sustainable coffee now has a market share of over 30% of total coffee. Starbucks is the leader with its Coffee And Farmer Equity (CAFE) program.

The market share of sustainable tea and cocoa is also above 20% because of similar commitments by large companies.

Whether the future is with third party standards or in-house schemes, the market share of sustainable ingredients is only going in one direction.

Sustainable sourcing will be featured in upcoming events organized by Ecovia Intelligence such as the Sustainable Foods Summit Latin America in São Paulo, Brazil from September  18-20 September and the Sustainable Foods Summit Asia-Pacific in Singapore from November 28-30.

The aim of the Sustainable Foods Summit is to explore new horizons for eco-labels and sustainability in the food industry by discussing key industry issues in a high-level forum. 

Ecovia Intelligence (formerly known as Organic Monitor) is a specialist research, consulting & training company that focuses on global ethical product industries.’

Amarjit Sahota is the president and founder of Ecovia Intelligence.

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