Sourcing challenges and sustaining a “circular economy”: The supplier view

18 Dec 2018 --- With growing consumer interest in health, sustainability and the ethical aspects of food ingredients, the notion of a “circular economy” and a sustainable supply chain has been in the spotlight this past year. “Circular economy” has been a buzz phrase in 2018 and suppliers are indeed addressing this trend. FoodIngredientsFirst spoke with some key suppliers about current sourcing challenges and how these can be overcome.

Going green is now a given but as 2020 targets draw ever closer, it is high time that actual updates are presented. Showing a company’s green colors is something that today’s “mindful consumer” expects. This is why Innova Market Insights listed Green Appeal as one of its key trends for 2019.

A 2018 Innova Market Insights survey found that 64 percent of US and UK consumers expect companies to invest in sustainability. This market dynamic has inspired product development, with 57 percent average annual growth reported in food & beverage launches with an ethical/environmental claim (Global, 2013-2017). 

Ingredients suppliers were also keen to highlight their sustainability credentials since manufacturers and retailers are becoming ever keen to present the carbon footprint of their entire chain: “from farm to fork.”

Creating more value
Givaudan has been investigating circular economy solutions for sometime and Geraldine O’Grady, Sustainability Manager Flavor Division at the company believes in the importance of creating more value for customers and stakeholders through sustainable product development. 

“When developing new flavors, we always consider their impact on the environment. We look for new ways to make flavor compounds via natural processes, such as fermentation and use sustainable plant materials,” she says.

There are many different categories of waste across Givaudan’s value chain; packaging waste, side streams from production processes and so on. It’s important for businesses to have a full view of the different kinds of waste, to then be able to identify ways to reduce or eliminate them, according to O’ Grady. “We are all looking to design more circular solutions,” claims O’Grady.

Part of moving toward a circular economy means reducing waste and protecting raw materials, securing the supply chain and guarding against unwanted challenges. Givaudan’s sourcing at Origin initiative involves working with local smallholder farmers, transformers and partners to secure the long-term supply of these ingredients while strengthening the local economic fabric by contributing to more stable incomes for thousands of farmers.

Preventing waste from being a problem in the first place is a crucial facet of circular thinking – in essence, designing processes that have no waste, according to O’Grady. “As a player in the food industry, we recognize that one of the biggest causes of food waste is through food loss during food production, both at the source when it is grown as well as through processing. In looking to a sustainable future for food and feeding a growing world population, it is critical that we minimize food loss, and produce food more efficiently,” she notes. 

Linda Duijnhouwer-Tomaselli, Marketing Manager, Sweet & Savory at CorbionEyeing sustainable alternatives
Corbion recently announced that it has committed to supplying customers with certified sustainable palm-based products, not as an option, but as a standard offering. Now it’s going one step further by signing on as a member of NASPON which was launched in December 2017 by the Roundtable on Sustainable Palm Oil (RSPO) to educate, build momentum and assist North American companies in making and delivering on commitments to source sustainable palm oil. This year, the 17 founding members of NASPON – which include Albertsons Companies, Dunkin’ Brands, Grupo Bimbo, Kellogg Company, Kraft Heinz, PepsiCo and Target – have been joined by 15 additional members, among them Aldi, Campbell Soup Company and Colgate-Palmolive Company, along with Corbion. 

“So far, we are on track to achieve our target of 100 percent RSPO MB certification of all palm oil and primary oleochemicals globally by 2020. In 2017, 24 percent of our palm oil and primary oleochemicals was RSPO MB-certified globally. Since then, we have been making excellent progress, and when we reach MB certification of all palm-containing products produced at two of our four palm-using U.S. plants in early January, it will be a significant step towards the 2020 target,” says Diana Visser, Senior Director of Sustainability at Corbion. “We began sourcing RSPO-certified products several years ago, which was a good starting point. But we realized that achieving 100 percent conversion would require a lot of teamwork across functions. So last year, we created a multi-disciplinary team that included procurement, R&D, communications, finance and sustainability to develop a roadmap for meeting our 2020 target. The implementation of that plan commenced in 2018.”

For Duijnhouwer-Tomaselli, circular solutions are a key enabler for a circular economy. “They can be a sustainable alternative for ingredients derived from fossil fuels,” she comments. Sustainability has always been at the heart of what Corbion does and the company’s sustainable ingredient solutions are based on renewable resources. Dependence on fossil resources is a major challenge and a serious concern, she stresses. “It is imperative we transition to a circular economy, using renewable resources powered by renewable energy. We feel well-positioned to support customers with this transition. For instance, 98 percent of our products are already bio-based and we’re aiming for 100 percent renewable electricity by 2030, a goal we are confident that we will achieve,” explains Duijnhouwer-Tomaselli.

Production and sourcing
Meanwhile, the “circular economy” is much more than a buzz phrase for Sensient in the company’s production and sourcing processes. Speaking to FoodIngredientsFirst, Dr. Roland Beck, Managing Director Sensient Colors Europe GmbH, says: “We take our environmental responsibility very seriously and all our processes meet ISO Standard 14001. In the area of wider sustainability, Sensient was the first company to launch a range of palm-free natural coloring solutions, all of which perform well in a wide range of applications and avoid the need to use palm oil-based products.”

With the constant sourcing challenge, Sensient adapted its “Seed to Shelf” program which sees the company work closely with growers and seed producers to ensure responsibly sourced materials are readily available for their customers.

“Sensient has a dedicated agronomy program in place supporting best farming practice throughout its supply chain,” adds Dr. Beck. 

Coping with environmental challenges
Coralie Garcia-Perrin, Senior Marketing Manager at Kerry Europe, also notes that the environmental challenges of the company’s business model are accelerating rapidly and becoming more and more visible.

As a food ingredients company, Garcia-Perrin believes that part of Kerry’s duties is to find new ways to produce, to develop products to be more respectful of the people and the planet. Kerry has initiated several sustainability programs to deliver on this promise, such as the Tsara Kalitao or RAIN project.

“But we also have several initiatives in our innovation funnel looking at ways to make better use of our waste,” Garcia-Perrin adds.Coralie Garcia-Perrin, Senior Marketing Manager at Kerry Europe

One other big challenge is finding the right balance between consumers’ expectations around natural ingredients and the sustainability challenges generated by those expectations, she notes. 

What’s next?
As 2018 draws to a close, much has been made of the various sourcing challenges throughout Europe and the rest of the world in recent months, as harvests of several crops have been affected by drought. Europe experienced a dry spell and above-average seasonal temperatures, including many heat waves, in the summer of 2018, and the repercussions may not be truly felt until 2019. Above all, sustainability and moving towards a more “circular economy” will continue be key themes for the coming year, with many suppliers having already highlighted their goals in creating a more transparent supply chain, amid the challenges that lie ahead.

By Elizabeth Green