How can Danone Ecosystem sustainable sourcing innovation be scaled up?

Summary

Sustainable sourcing and agriculture are of major importance for the future of large agribusiness companies such as Danone. The issue is about preserving natural resources, strengthening the company’s stakeholders and global ecosystems, and ensuring that it is still able to accomplish its mission in the most sustainable way possible in the future. To reflect on these issues, Danoners and stakeholders gathered for an intense and fruitful three-day work session.

20Mai.
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2014 has been declared the International Year of Family Farming by the Food and Agriculture Organization of the United Nations (FAO). “Family farming includes all family-based agricultural activities, and it is linked to several areas of rural development,” according to the FAO definition.

Family farming mainly relates to small-scale operations, but it is “the predominant form of agriculture in the food production sector” (it makes up over 98% of farming holdings and is responsible for at least 56% of agricultural production) and as such it contributes greatly to shaping the face of international agriculture. Its links with rural development, ecosystem reinforcement and people’s empowerment also explain why the FAO has chosen to highlight it in 2014.

One of the main questions to be addressed throughout the year is the link between family farming and sustainable agriculture. How can small farmers be helped and empowered to go down the sustainable road? This links to an equally important question: how can we help sustainable agriculture to scale up?

Can our whole farming system be changed to better respect the environment and feed the world? How far can family farms go? Are the largest agribusiness companies capable of transforming their approaches so dramatically? How? Within how many years?

 “The whole idea of coming up with innovative ways to build sustainable sourcing is central to creating an environment for Danone that we can safely rely on to co-deliver, with our partners and stakeholders, the promise of our brands to our consumers. Nothing can be sustainable if it is not fair. As a large company, we should pay a lot of attention to how we deal with small actors in our supply chain.”

To try to answer these questions, the Danone Ecosystem Fund organized a workshop entitled “Innovative Sourcing Solutions and Sustainable Agriculture” in Amsterdam in March. These issues are of the utmost importance for Danone’s future: through sourcing, the Group is directly connected to farmers and must ensure that the supply chain is built with reliable and sustainable partners. “We share, with the farmers, the same future,” said Pierre Bou, Ecosystem Development Manager on Sourcing, in the introduction to the workshop. Over three days, the workshop brought together farmers, project managers from local BUs who work on Ecosystem sourcing programmes, NGOs partnering on these projects, business units which implement Sustainable Agriculture experiments, Danone Sourcing and Supplier Development teams, etc. to share the experience they have acquired in these “labs”. As Pierre Bou summed it up, “our ambition is the convergence between Ecosystem, sustainable agriculture initiatives and the purchasing function (SSD): our goal here is to build bridges between them to strengthen and accelerate the projects and make our practices more consistent, innovative and sustainable.”

The definition of sustainable agriculture

What is sustainable agriculture exactly? According to the man who coined the term, Australian agricultural scientist Gordon McClymont, it is “an integrated system of plant and animal production practices having a site-specific application that will last over the long term”, i.e. an ensemble of farming practices that minimize the use of resources to preserve the environment and its biodiversity in the long run.

 

The accurate definition of what sustainable agriculture means for Danone is actually an important issue for the coming years. Philippe Bassin, General Manager of DanTrade and the Ecosystem Fund, explained during the workshop: “We’ve been having different labs and small-scale experiences, but what we have ahead of us are big steps. We will have to feed 9 billion people by 2050. We have to make it impactful and massive, we have to scale up.” The challenge is made all the more complex by the fact that environmental protection demands we minimize the use of natural resources. Bernard Giraud, Senior Advisor Sustainability & Shared Value Creation and President of Livelihoods Venture, summed it up: “It is about how we use the capital of nature and how we invent production and consumption models that leverage this capital without destroying it.”

 

How will Danone define these models? The Danone Ecosystem Fund already assesses its projects using a holistic compass with four axes: Nature, Economy, Well-Being and Social. Jean-Christophe Laugée, Social Innovation and Ecosystem Director, explained: We miss some parts if we focus only on the economic and social axes. Environmental practices can help us achieve a better balance, for instance. There are strong interdependencies between all four dimensions, which is why we moved to the compass approach. The idea is to focus on our global footprint.”

The current implementation of the RISE tool also constitutes a first global approach to sustainable agriculture. RISE (The Response-Inducing Sustainability Evaluation) is a method that “serves the holistic assessment of the sustainability of agricultural production at the level of the individual farm,” and was developed by the University of Bern (HAFL, Switzerland) in the late 1990s. The tool is being implemented in several pilot business units in Poland, France, Brazil, Germany, the United States and Indonesia. According to Didier Moreau, Milk Quality, Environment and Sustainable Agriculture Director at Danone Dairy, “it is a good basis to start to share a diagnosis with the stakeholders.”

Building on these initiatives, the Group is working to deliver an accurate definition of sustainable agriculture, along with concrete goals, in the coming months. Experience acquired in the field will be immensely helpful in coming up with this definition: “Ecosystem sourcing projects and experiments on Sustainable Agriculture are playing a major role in moving to more sustainable agri-sourcing practices and to the transformation of our sourcing models,” the organisers explained in the workshop booklet. Their goal for this event was thus twofold: to reflect on sustainable agriculture at Danone in the medium/long-term, and to « inspire, share and accelerate » the projects that are qlready implemented.

Co-creation and co-fertilization: an efficient way to reflect on the future

The workshop participants all had a project to talk about, issues and best practices to share, and an eagerness to hear about new solutions that have proven efficient elsewhere. They therefore worked together on six specific issues:

  • How to go from subsistence to family farming,
  • How to use Ecosystem to support the BUs’ strategy to move towards sustainable agriculture,
  • How to implement efficient change management,
  • How to implement and empower farmers’ organisation models,
  • How to improve efficiency, productivity and quality
  • and How to build and implement a sustainable agriculture roadmap in mature countries.

 

The backbone of the workshop was to focus on ways to achieve both sustainable business impacts and sustainable social impacts. According to Ken McCarty, a family farmer from Texas, business, social and environmental impacts can in fact walk hand in hand:  People have begun to realise that there are social and economic gains to be made from sustainable agriculture. » This can only inspire Danone’s reflections on the subject. As Emmanuel Faber, Deputy General Manager of Danone, put it: “The whole idea of coming up with innovative ways to build sustainable sourcing is central to creating an environment for Danone that we can safely rely on to co-deliver, with our partners and stakeholders, the promise of our brands to our consumers. Nothing can be sustainable if it is not fair. As a large company, we should pay a lot of attention to how we deal with small actors in our supply chain.”

 

The strong interdependency between all actors of the food-production chain also explains why the workshop favoured co-creation and cross-fertilization between projects. This approach is in fact at the heart of the Ecosystem model, where BUs always work on a project hand in hand with local NGOs and the beneficiaries, and of the Sustainable Agriculture pilot programme as well. Before the workshop, the participants were all asked to answer a survey: 85% of them said they felt it necessary to reinforce the community. Everything was thus done so that participants could draw inspiration from each other. For instance, Milk Collection Communities from Egypt could share insights with the Ukrainian strawberry cooperative and NGO Heifer on quality and farmers’ organisations; the Merapi project from Indonesia could talk about supplier development with the SSD teams; the Sustainable Agriculture pilot in Poland could reflect on the transition to sustainable farming with guest speakers Ken McCarty (USA) and Anton Stokman (the Netherlands), both family farmers, etc.

Ecosystem workshop

There were talks about financing solutions to help family farms scale up and become sustainable; how to improve training on farming management and develop the farmers’ technical knowledge; how to attract young people to the farming world; how to foster their organisation into cooperatives; how to change the farmers’ mindset and fight their reluctances about switching to sustainable agriculture; how to support the development of favourable public policies and legal frameworks; how to develop pricing systems that are fair to everyone, etc.

A strong focus on challenges

The workshops ended with a strong focus on the challenges the projects face. Based on votes from all participants, a list of the 5 most important ones was drawn up:

1. How to make farmers’ organisations and farmers financially sustainable

2. How to attract young people to continue the farming business

3. How to foster co-creation within Danone and look for internal support

4. How to develop farmers’ knowledge

5. How to leverage animal feeding to further sustainable agriculture

 

Participants were then free to volunteer to work thoroughly on one of the challenges for the next year and present their recommendations next September.

Although plenty of best practices were shared during the three days (and this will continue online), choosing to focus on these challenges highlights Danone’s commitment to deepening its work on sustainable agriculture. It is not just about taking pride in what already works, it is also about constantly striving to go bigger and better.

Photo © Shutterstock /  Martin Lehmann