NEW ORLEANS, La. — Providing sustainably sourced food to consumers is a difficult and costly proposition, says one of the world’s largest snack food companies.
“It is a challenge, to say the least,” said Dave Brown, vice-president of global commodities for Mondelez International, which was formerly Kraft Foods Inc.
Non-governmental organizations (NGOs) have placed the company under the microscope for how it sources its cocoa and coffee.
Mondelez is the world’s largest manufacturer of biscuits, chocolate, candy and powdered beverages and the second largest supplier of gum and coffee.
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Brown said consumers are increasingly interested in where those commodities are sourced and whether the farmers who produce them are adequately compensated.
“People are beginning to look all the way back to the beginning of the supply chain,” he told the Oilseed and Grain Trade Summit.
It’s why Mondelez is investing $400 million over the next 10 years to assist its cocoa farmers, who are largely based in West Africa.
“We’re trying to help them with yields,” he said.
“We’re trying to help women-owned plantations. We’re trying to make sure that child labour is not a problem.
The company, which had revenues of $35 billion last year, is spending another $200 million to sustainably source all of its coffee by the end of next year.
Its efforts do not end with small commodities. Mondelez is heavily involved with the Rainforest Alliance in an effort to obtain more sustainably sourced palm oil.
It has a program in the European Union to ensure that the wheat it uses in its biscuits will be 60 percent sustainably sourced by 2016. It also has initiatives in the sugar and dairy industries.
Brown said NGOs are breathing down the necks of large food companies to ensure their sustainability efforts are genuine.
“I’m really amazed at the power and influence that they have,” he said.
“There are some that will take you at your word a little bit more and are willing to work with you, and there are some that threaten to tell all the bad things that your company is doing on Facebook by 5 p.m. on Friday if you don’t change, and we’ve had that happen before.”
Brown said it is a monumental task to implement some of the sustainability initiatives.
Mondelez sources coffee from more than one million small farmers located in the tropics. It is hard to measure the plight of those farmers spread throughout the world.
The company pays a premium for wheat and coffee produced in a sustainable manner. In return, it receives a valuable marketing tool.
Climate change is another motivation for sustainability initiatives. It has food companies extremely nervous and eager to assure future supplies of the commodities they use.
“If you look at the price of coffee over the last year, it doubled,” said Brown.
“I know we all deal in volatile commodities, but I mean, that’s craziness and that was all weather related.”
