People for palm oil: Unilever leverages crowdsourcing to boost supply chain transparency

16 Feb 2022 --- With deforestation being critically linked to unsustainable practices across palm oil production, Unilever is leveraging smartphone-enabled crowdsourcing to broaden its oversight of this hot commodity’s supply chain in Indonesia.

The FMCG giant is recruiting mill workers and suppliers to provide photos and information about collection points and ramps – collection points where fresh palm fruit from different smallholder oil palm producers are collected, purchased and subsequently sold to the mills – via the digital crowdsourcing platform Premise.

Contributors are taught, through Premise’s platform, how to collect insights in a way that respects people and property laws in line with Indonesia’s regulations.

To ensure a deforestation-free supply chain, ingredients must be traceable all the way back to where they are grown.

“World’s first case” of large-scale crowdsourcing for commodities
In Aceh province in Sumatra, Indonesia, where Unilever ran the pilot of its initiative, the company was able to identify and document more than 5,000 collection points in a single region.

“Individuals, either as consumers or part of an organization, can often feel helpless in the face of challenges like deforestation or climate change. Our partnership with Premise is changing that by inviting people on the ground to help us follow the journey raw materials take in the first mile of the supply chain,” says Andrew Wilcox, senior manager of sustainable sourcing and digital programs at Unilever.

“We believe our pilot in Aceh is the world’s first case of large-scale crowdsourcing technology being applied to commodity sourcing. Technology is a powerful enabler of supply chain traceability and transparency,” he continues.

“Crowdsourcing and partnerships are critical to building the capabilities Unilever, and the world, urgently needs to tackle deforestation.”

“Transparency Triumphs” was crowned the Top Trend of 2021 by Innova Market Insights, and is sustained this year in 2022’s Top Trend, “Shared Planet.”

“With consumers increasingly demanding to know where the products they purchase came from and the prospect of potential bans on commodities linked to deforestation, we’re not only safeguarding the environment by making sure our supply chains are sustainable, we’re also future-proofing our business,” stresses Wilcox.

In Sumatra, Indonesia, where Unilever ran the pilot of its initiative, the company was able to identify and document more than 5,000 collection points in a single region.Traceability for the critical first mile
To ensure a deforestation-free supply chain, ingredients must be traceable all the way back to where they are grown.

For a product like palm oil, the first mile from the plantation where palm oil crops are harvested to the point where they are processed is often where the most visibility is required.

But tracing what goes on in that critical first mile is not always straightforward, Unilever concedes.

Conventionally, companies draw a 50 km radius around the mills in their supply chain and assume that the farms or plantations in those areas are likely to be supplying the mills.

Palm oil fresh fruit bunches need to be processed within 24 hours of harvesting, so it was widely accepted that mills would therefore source from nearby farms.

However, given the complexity of palm oil supply chains, Unilever stresses it is necessary to improve the monitoring of these areas so that it can verify that its sourcing is not linked to deforestation.

“We know that, while some produce will go straight from farm to mill, sometimes the oil palm fruit is traded through a middleman, with fresh fruit bunches being dropped off and picked up at informal collection points,” the company details.

“These collection points can be far away from where the fruit was grown, making it harder to determine whether the fruit was produced sustainably or not without concrete data,” it underlines.

“But now, working with our partner Premise, we are creating a community of local people in Indonesia who will help us track the palm from point of origin to processing.”

Putting the power in people’s hands
Premise runs the sourced material through its AI-powered quality control system to verify the credibility of the photos and to ensure collection points are not being double counted.

The company details that this helps it build a better picture of previously undocumented parts of the palm supply chain operating in the area.

“We can integrate this with the rest of our sourcing information, joining the dots for a fuller picture of our supply chain and enabling us to take more targeted action to improve it – whether that’s rolling out more support for smallholder farmers or starting new conversations with our suppliers,” Unilever concludes.

Edited by Benjamin Ferrer