Symrise’s “Secure Sourcing” program to boost raw material supply chains amid agricultural volatility

27 May 2024 --- Symrise has launched its Secure Sourcing program, an initiative designed to secure the supply of natural raw materials. This comes at a time when various factors, including climate change and geopolitics, are impacting the production of agricultural raw materials and increasing the risk of supply shortages.

Barbara Malmezat, global purchasing and risk director at Symrise (Food & Beverage, Naturals), speaks to us about the program.

“We started the secure sourcing program because the supply of raw materials is becoming increasingly complex. First, the climate change that we have seen accelerating since 2022 impacts ingredient production. For instance, the frequency of heat waves in the US has tripled in the last 60 years.”

Secondly, geopolitical change impacts supply chains, Malmezat tells Food Ingredients First. “We see the surge of economic wars, sometimes linked to oil prices, which disrupts global trade flows. As a result, consumers are asking for more transparency, sustainability and clean labels.”

At the same time, Malmezat observes “regulatory and legal constraints that are rising from food safety,” particularly in Europe. “We have a rising global population that keeps increasing, and it becomes less certain that global production can keep up with feeding the whole global population. This, in turn, creates tension between the countries and leads to weaker supply chains.”

As agricultural production faces challenges and the risk of supply shortages increases, Symrise is looking to future-proof its supply chains.“The level of the risk is increasing at all steps of the supply chains, from farmers to food and beverage manufacturers and to end consumers,” she continues. “e have already put in place the sourcing with purpose approach on one side, responsible production and consumption on the other side. The sourcing with purpose approach defines three layers of sustainability targets to drive for more transparency and traceability.

The secure sourcing roadmap is a new approach within this approach based on risk management to ensure business continuity through sustainable sourcing strategies, she explains. 

Risk to farmers and growers
According to Malmezat, there is a “high risk for growers who see yields decreasing, production costs increasing and price volatility further developing uncertainty.”

“This situation is forcing farmers to become less loyal and more opportunistic, particularly for annual crops as they switch to less risky or costly crops or more profitable crops.”

She notes that natural ingredients suppliers face the risk of a shortage of raw materials from one year to the next with high price volatility, adding that this “also creates a risk on the quality of the fruit and vegetables that we can get.”

Further, there are significant risks for consumers who may need help finding all the products they want on supermarket shelves. “So what we are seeing right now is that there is a power balance that is starting to shift from the end of the value chain to the beginning of the value chain.”

Anticipating and implementing change
In 2022, Symrise started anticipating growing concerns around this context and consequences and initiated its “Secure Sourcing” approach.

“Our in-house agronomists started to assess a wide range of fruits and vegetables and noted the risks relating to water, weather events, access to labor and land loss of interest from farmers, among other factors.”

Malmezat explains that this long-term risk assessment was the basis for defining vital strategic directions to mitigate those risks. Barbara Malmezat, global purchasing and risk director at Symrise (Food & Beverage, Naturals), discusses the program with us.

“Based on this analysis, we were able to define a roadmap with five key pillars involving implementing regenerative agricultural practices, using smart agriculture tools and identifying drought-resistant varieties.”

Looking ahead, Malmezat underscores that “the biggest challenges that ingredient suppliers face and must overcome are first to ensure business continuity in this context of significant change.”

“That means bringing to our customers secured volume and quality and limited price volatility, as well as identifying and addressing weak points together with our customers.”

She concludes that another key challenge, which Symrise is working on, is to set up and measure KPIs based on sustainable agriculture, which means finding reliable data based on environmental footprint and moving from an obligation of means to an obligation of results. 

By Elizabeth Green