Coca-Cola and Sustainable Agriculture

Presented by: Olivia Knight-Adams – NWEN Environment Manager

10 December 2014

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Content1. Sustainability at Coca-Cola

2. Why sustainable agriculture matters

3. Our approach to sustainable agriculture

4. What sustainable agriculture means for our suppliers?

5. Sustainable agriculture in practice

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Sustainability at Coca-Cola …

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Enhancing Enhancing Enhancing Enhancing People’s People’s People’s People’s WellWellWellWell----BeingBeingBeingBeing

Building Strong Building Strong Building Strong Building Strong CommunitiesCommunitiesCommunitiesCommunities

Protecting the Protecting the Protecting the Protecting the EnvironmentEnvironmentEnvironmentEnvironment

SUSTAINABLYSUSTAINABLYSUSTAINABLYSUSTAINABLYGROWINGGROWINGGROWINGGROWING

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COMMUNITIES ENVIRONMENTPEOPLE

NutritionNutritionNutritionNutrition

Active Healthy Active Healthy Active Healthy Active Healthy

LivingLivingLivingLiving

Responsible Responsible Responsible Responsible

MarketingMarketingMarketingMarketing

Product Safety & Product Safety & Product Safety & Product Safety &

QualityQualityQualityQuality

Charitable Charitable Charitable Charitable

ContributionsContributionsContributionsContributions

Human &Human &Human &Human &

Workplace RightsWorkplace RightsWorkplace RightsWorkplace Rights

Women’s Women’s Women’s Women’s

Economic Economic Economic Economic

EmpowermentEmpowermentEmpowermentEmpowerment

Water stewardshipWater stewardshipWater stewardshipWater stewardship

Sustainable Sustainable Sustainable Sustainable

PackagingPackagingPackagingPackaging

Energy Efficiency & Energy Efficiency & Energy Efficiency & Energy Efficiency &

Climate ProtectionClimate ProtectionClimate ProtectionClimate Protection

Sustainable Sustainable Sustainable Sustainable

AgricultureAgricultureAgricultureAgriculture

FRAMEWORKFRAMEWORKFRAMEWORKFRAMEWORKSUSTAINABILITYSUSTAINABILITYSUSTAINABILITYSUSTAINABILITY

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Why sustainable agriculture matters…..

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Agriculture is critically linked to energy and water and all three are at the heart of the sustainability challenge

greater supply volatility

more unpredictable yieldshigher production costs

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Why sustainable agriculture matters to Coca-Cola?

Brand risk tied to

sourcing

Supply disruptions

£ increases & £ volatility

Changing consumer

preferences

Social media

Power of civil society

Globalization

Declining trust in

corporations

Population growth

Emerging middle class

Climate volatility

Water stress

Soil degradation

More

agricultural

ingredients

2020 Growth

Vision

=

Changing operating

conditions

+

Agricultural

supply constraints

+

Global trends magnifying

market forces

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Our approach to sustainable agriculture….

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We are committed to promoting sustainable sourcing and supporting sustainable sourcing practices across industry

• Incorporating sustainable sourcing criteria into long-term ingredient sourcing

plans

• Working with partners and suppliers to improve livelihoods through efforts

to increase crop yields and reduce production costs

• Helping farmers to improve agricultural practices and reduce environmental impacts such as minimizing use of pesticides & optimizing

fertilizer applications.

• Helping build industry-wide collaboration to gain alignment and effect

change in the agricultural sector

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GOAL: 100% of priority commodities meet sustainable procurement standards

SUSTAINABLE AGRICULTURE

Tea

Sweeteners:

Sugar (Cane)

Sugar (Beet)

Corn(HFSS)

Stevia

Fruit:

Orange

AppleMango

Lemon

Grape

Coffee Soy Palm OilPulp & Paper (Forestry products)

Other:

Coca-Cola’s 2020 Sustainable Agriculture Goals and Commitments

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Environment

7. Water Management

8. Energy Management and Climate Protection

9. Conservation of Natural Habitats and Ecosystems

10. Soil Management

11. Crop Protection

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Human and Workplace Rights

1. Freedom of Association and Collective Bargaining

2. Prohibit Child, Forced or Abuse of Labor

3. Eliminate Discrimination

4. Work Hours and Wages

5. Safe and Healthy Workplace

6. Community and Traditional Rights

Farm Management Systems

12. Harvest & Postharvest Handling

13. Reproductive Material Identity, Selection & Handling

14. Management Systems, Record Keeping and Transparency

15. Business Integrity

Sustainable Agriculture Guiding PrinciplesLAY THE FOUNDATION FOR “SUSTAINABLY SOURCED” EXPECTATIONS

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Building a comprehensive set of criteria

Sustainable Agriculture Guiding Principles

Environment (shortened)

Principle 7. Water Management

� Comply with applicable laws and regulations

� The annual volume of water withdrawn is recorded and withdrawal

amounts do not exceed an authorized or permitted amount

� Sources of water (surface and groundwater) utilized are inventoried.

� Overall demands on local water source(s) are understood. If the water

source is under stress, a dialogue is initiated with other stakeholders to

develop a solution.

� Total water usage is reduced by implementing water saving practices.

� Where irrigation is used, the most efficient system as is technically

available and financially affordable is implemented

� Appropriate management and treatment systems for all wastewater

discharges exist and are maintained.

� Land management practices are implemented to minimize impacts of diffuse pollution (e.g., runoff) on surface and groundwater bodies.

� Irrigation water quality is monitored and managed to minimize negative

impacts on crops and surrounding ecosystems.

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What sustainable agriculture means for our suppliers…..

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Route to SAGP compliance

Beet

Clear expectations

All Tier 1 direct suppliers must have full line-of-sight to farm

locations-which must meet SAGP minimum expectations

Flexible approach

Various pathways to compliance according to commodity &

whether supplier is already working against existing standards

(which we have benchmarked SAGP against)

Industry alignment

Where existing standards do not exist (e.g. beet) we are

supporting development of industry wide initiatives such as

SAI Platform FSA to demonstrate compliance with SAGP

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What is SAI Platform?• Founded in 2002 by Unilever, DANONE & Nestle, as non-profit organization to

exchange sustainable agriculture knowledge across range of food chain stakeholders

• SAI Platform now a global food and drink industry initiative with 60 active

members supporting the development of sustainable farming practices at the field level.

• Retailers are being invited to join SAI further changing the dynamics of the platform

• Aims to make it easier & more flexible for farmers worldwide to adopt sustainable

farming practices

• Developed series of common principles & practices which evolved into Farmer Sustainability Assessment (FSA)

Why SAI Platform FSA?

Meets needs of the industry

A simple, yet comprehensive tool with implementation & verification guidelines to assess farm sustainability

Applicable to all crops (including arable, fruit and vegetables) and all farm sizes

Addresses environmental social &economic criteria & promotes continuous improvement

Offers an easy scoring system resulting in a clear overview of the farm’s sustainability

Unique advantages for farmers

Increases supply chain consistency

Excel tool backed-up by comprehensive IT solution reduces duplications and time requirement by farmers, www.standardsmap.org

Responds to needs of many customers in value chain (Unilever, Heineken, Mondelez, Mars already support joint action on sugar beet) reducing audit needs & costs

Reduces work for the farmer as it pre-filters legislation and cross-compliance requirements (in EU) on the ITC tool

Added value from SAI training, insights & tools for continuous improvement

Our preferred route to demonstrate compliance with SAGP for beet & fruit

Provides harmonised approach to sustainable sourcing across F&D industry

2020

Sustainable agriculture in practice….

Globally: We support over 40 sustainable sourcing projects in 25 countries aimed

at improving crop yields & livelihoods of farmers, while reducing costs &environmental impact

Europe: We actively support Innocent’s Doñana Strawberry & Sustainable Water Management project in Spain & Skylark Foundation in Netherlands (friends in rotation” approach)

England: Partnership with WWF since 2012 promoting water sensitive farming,

supply chain sustainability and good water stewardship. Focussed on River Nar

in Norfolk, source of approximately 80 % of beet used in our drinks made in GB

Collaborating and sharing knowledge with farmers, local communities and other

strategic partners has been key to successful implementation of sustainable

agricultural practices

Pressures on the River Nar

• Nar failed to reach “Good Status” under EU Water Framework Directive

• Soil erosion & compaction resulting in in-river sedimentation

• Phosphate and nitrate loss from soils resulting in in-river eutrophication

• 21 high sediment ingress points identified

• Need identified to reduce farm runoff (which carries nutrients, pesticides and sediments) from entering the River Nar

SolutionsBuilt partnership with Norfolk Rivers Trust – trusted local knowledge

Appointed Farm Advisor to provide farmer support – hotspots identified & bespoke farmer management plans

created

Key interventions included installing:- baffles - swales

- silt traps - reed beds

Achievements & Benefits Preventing agricultural pollution running

into river, restoring 1.8km of river habitat for trout & other species

Reducing need for fertilisers and improving soil quality for farmers

Worked with communities & government in river catchment planning to help

rivers meet good ecological status

Promoted water stewardship through stakeholder engagement

THANK YOU

oknightadams@coca-cola.com