Transparency focus helps Kraft Heinz accelerate towards supply chain goals

EXCLUSIVE: Food processing company Kraft Heinz has enrolled in a journey of transparency to help deliver its CSR strategy, with the company's first ever sustainability report highlighting achievements with palm oil sourcing and challenges related to water consumption.

The company published its first ever sustainability report, since the merger of the two legacy companies back in 2015, last week. The report outlines progress against key CSR goals, which includes targets to reduce energy use, water consumption, waste and emissions by 15% by 2020 and a goal to create a fully-traceable supply chain for palm oil commodities.

The report reveals that Kraft Heinz – owner of major brands such as Capri Sun and Philadelphia – is now sourcing 100% of its palm oil from certified sustainable sources, with more than 90% traceable to the mill.

Speaking exclusively to edie, Kraft Heinz’ head of global corporate reputation Caroline Krajewski reiterated the company’s commitment to tracing 100% of its palm oil to mills, noting that work to date had been achieved by embracing more transparent practices.

“Last year we were 0% traceable to the mill, and it’s a very complex supply chain, but we worked with the Rainforest Alliance and over 90% is now traceable back to the mill. We’ll keep working until we get to 100%,” Krajewski told edie. “It wasn’t a complete overhaul of the supplier base, but rather asking the right questions and putting the right implementations in place to understand the mills we source from.

“Traceability was something the neither of the legacy companies had ever focused on and traceability, from and industry perspective, has really started to grow in prominence amongst stakeholders over the years. It is our intention to get 100% traceability on that specific commodity. Then we’ll expand to others as it makes sense and as our materiality analysis evolves.”

Malaysian and Indonesian companies dominate global palm oil production, but have been linked to deforestation and slash-and-burn clearance methods that have contributed to the huge forest fires. The complexity and lack of traceability of this particular supply chain has already seen high-profile brands such as Nestlé, Hershey and Mars criticised by the media, while Unilever had to suspend sourcing from an Indonesian-based palm oil supplier over deforestation allegations.

While Krajewski notes that Kraft-Heinz is a “relatively small player” for palm oil sourcing, she is still proud of the progress achieved in this area to date and is hoping that the other areas of the supply chain can also be transformed.

As part of the report, Kraft Heinz introduced a new goal to transition to a 100% cage-free egg supply globally by 2025. So far, more than one-third of the company’s global egg supply has transitioned to cage-free status.

Kraft Heinz is also working to end the use of fish aggregating devices (FAD) for tuna, which often led to sharks and sea turtles being captured as well. The company is targeting fishing activities in Australia and is aiming to only source 100% FAD-free tuna in all Greenseas products by early 2018.

The company is also delivering training courses and resources to more than 2,000 Honduran coffee farmers to help them increase yields and incomes and improve sustainable farming practices.

Murky waters

Accelerated process is also matched in Kraft Heinz’ environmental footprint targets. All targets are measured against a 2015 baseline and emissions have been reduced by 5.1%, energy use has fallen by 3.6% and waste sent to landfill by 9.5%. For the last target, six global facilities achieved landfill-free status in 2016.

The key footprints will need to be reduced by 3% on average each year to achieve the 15% reduction by 2020 and Krajewski is confident the targets will be reached. However, she is aware that water consumption has proved a particularly difficult challenge.

Earlier this year, Kraft Heinz was ranked bottom for its sector in the Ceres Feeding Ourselves Thirsty report, which evaluated 42 of the largest food companies on water risks across packaged foods, beverages, agricultural products and meat.

The company’s sustainability report revealed that water consumption had been reduced by 1.4% against a 2015 baseline, and Krajewski noted that much of 2018 will be spent trying to accelerate progress in this area.

“We achieved a reduction in 2016 that we’re proud of, but we’re behind track,” Krajewski added. “It’s a concern. We feel good about the goal and finding a way to achieve the goal. The reality is that we don’t know specifically what is holding us back in this area.

“There are a lot of hypotheses and variables that could be causing our water reduction strategy to be behind schedule. Water reduction will be a focus for us as we move into next year. We want to better understand the delays and challenges and how we can get better.”

Matt Mace

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