Apr 20 2009
Kraft Foods (NYSE: KFT) has reached two important achievements that progress sustainability within its agricultural supply chain. Last year, the company increased its year-over-year purchase of coffee beans from Rainforest Alliance Certified(TM) farms by 50 percent, bringing the total to nearly 30,000 metric tons -- once again making Kraft Foods the world's largest buyer of coffee from Rainforest Alliance Certified(TM) farms. In February, Kraft Foods and other industry, government and nongovernmental partners joined with the Bill & Melinda Gates Foundation and announced the launch of a comprehensive program that will invest $90 million over five years to advance the sustainable production of cocoa and cashews in Africa.
"These are two excellent examples of the progress we're making in advancing the sustainable sourcing of our agricultural commodities," said Steve Yucknut, Vice President, Sustainability. "This is a journey and we still have work to do, but expanding our sourcing of beans from Rainforest Alliance Certified farms and partnering with the Gates Foundation represent significant steps."
Rainforest Alliance Certification Addresses Coffee Sustainability
In the early 1990s, Kraft Foods began addressing coffee sustainability with the support of public-private partnerships and expanded this strategy in 2003 to include Rainforest Alliance certification. Kraft Foods' purchase of nearly 30,000 metric tons of coffee from Rainforest Alliance Certified farms in 2008 not only represents a 50 percent increase versus the prior year but also a 12-fold increase from 2004. Over the last five years, the company's partnership with the Rainforest Alliance has benefited more than 300,000 farmers and their dependents on more than 60,000 hectares of farmland in developing markets.
Importantly, the decision to source from Rainforest Alliance farms has been both a sustainability and business success. For example, Kraft Foods relaunched several Kenco coffee products in the United Kingdom last year, highlighting Rainforest Alliance certification. Initial consumer impact has been impressive, generating double-digit revenue growth and share growth of 1.2 points in the fourth quarter 2008. In Sweden, sales at a key away-from-home customer of instant and espresso coffee doubled since Kraft Foods began selling coffee with the Rainforest Alliance Certified seal in 2006. In total, eight of Kraft Foods' coffee brands in Europe and North America now carry the Rainforest Alliance seal. This support for farms that have earned Rainforest Alliance certification showcases the commitment our employees have to making a delicious difference in our world.
In 2005, Kraft Foods expanded the collaboration with the Rainforest Alliance to include cocoa and purchased approximately 3,000 metric tons in 2008. Last year, under its Suchard brand, Kraft Foods became the first European manufacturer of hot chocolate to carry the Rainforest Alliance seal.
Gates Foundation Partnership Helps Boost Incomes of African Farmers
Seventy percent of the world's cocoa comes from West Africa. One-third of the world's cashews come from West Africa. These two industries provide income for millions of smallholder farmers who, like a majority of the world's poorest people, live in rural areas and rely on agriculture for their food and income. The projects aim to strengthen the entire agricultural value chain -- from seeds and soil to farm management and market access -- so that progress against hunger and poverty is sustainable over the long term.
Kraft Foods is the only major branded food company involved in both projects. The projects will be managed by the World Cocoa Foundation and the German development organization Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ) GmbH.
"By lending support at the farm level and forward, Kraft Foods can help address the cycle of poverty and hunger that undermines the communities from where we source our raw materials," said Yucknut.
On-Track to Reach Aggressive Sustainability Goals
Advancing sustainable sourcing of our agricultural commodities; reducing the use of water, energy and packaging; transporting more efficiently; and minimizing the amount of waste we produce will all play a vital role in ensuring the long-term health of our business and our planet.
In addition to the work we're doing with agricultural commodities, we've set some aggressive goals in five key areas that round out our sustainability focus:
- Reduce plant energy usage by 25 percent
- Reduce plant energy-related carbon dioxide emissions by 25 percent
- Reduce plant water consumption by 15 percent
- Reduce plant waste by 15 percent
- Eliminate 150 million pounds (over 68 million kg) of packaging material
Kraft Foods is making strong headway against these goals. The company has published a fact sheet here with examples from several initiatives underway in each of the company's six focus areas.