FEEDING THE WORLD IN A SUSTAINABLE ENVIRONMENT
Friday, October 17, 2003
Speaker: Dr. Jeroen Bordewijk
The Food Industry Response to Sustainable Agriculture
DR. JEROEN BORDEWIJK
President, Sustainable Agriculture Initiative (SAI)
Chairman, Unilever Sustainable Agriculture Steering Group
Ladies and gentlemen, it is a great honor for me to speak to this very prestigious forum. I am going to present to you initiative of the food industry, particularly starting out of Europe. But maybe before that I would like to say a few words on the company which I am working for, Unilever.
Just to share with you what is our vision in relation to sustainable development, particularly also the Millennium Development goals, which we think are extremely important for the continuing success of our corporation. Just to explain: So I am working for Unilever, which is a British-Dutch multi-national, and as you heard earlier this morning, the world “multi-national” doesn’t sound with everyone as good as maybe with myself. But let me explain that we feel ourselves as a multi-local, multi-national which works around the world with operations in about 85 countries and selling products in over a hundred countries.
Now, we are a company who sells branded goods for food but also for personal hygiene and for household hygiene. That means that about more than 200 million times a day, a consumer somewhere in the world is buying a product from Unilever. So we have a very intermediate contact with consumers, with people all around the world.
That means, for a company like Unilever which has been active over a hundred years in many countries around the world, that we depend very much on the prosperity of the communities in which we work. So we need to have a long-term prospective, even as we also have to deal with the quarterly results.
Now, how do you measure those things? We have clearly already, I think, about ten years ago decided as a company that if we want to stay successful we also need to concern ourselves not only with being successful in delivering nice products to our consumers and customers but also that we have to concern ourselves with the effect it can have on the resources we make use of – and it can be natural resources, it can be social recourses – and that we have to make sure that we aren’t a part of the problem but that we are part of the solution.
Now, we have selected three priority areas. First of all, water. And we have heard before in this panel in its presentation on the water issues. Now for us as a company, water means not only at the agricultural sites is important to grow our key raw materials, but also at the source of the consumer. So we say that we are the biggest seller of tea in the world – the Lipton tea may be well known by a lot of you – but no water, no tea.
And so for us it means we have started initiatives which range from working with local communities – an example is the... River in the Philippines to clean up the river to make sure that there is also access to good and proper drinking water. And we do that together with local NGOs, local communities, but also the other private sectors in those areas. We have those projects in India, in Indonesia, and in all the parts of the world.
The second priority area for us is fish. We are in Europe the biggest seller of branded frozen fish. And we all know that there is a huge issue about depletion of fish stocks, and it also has a huge impact on the hunger agenda which you are discussing over the last two days. So for us also we have a very simple formula there: “No fish, no fish sticks.”
And we have been working since 1997 with the... first of all to set up... Stewardship Council, an independent organization to help formulate criteria for sustainable fishing, reorganizing our supply chains for fish to... by 2005 only from sustainable resources. And that’s not an easy task.
The third area of priority is agriculture. About two thirds of our product raw material portfolio is coming from agriculture. And we have a great concern about availability of agricultural material long term and also the capacity of the natural and social resources to really produce and give access to the proper quantity and quality of those raw materials.
So therefore we started in 1998 activities around the world on sustainable agriculture. And that has resulted so far for tea,..., tomatoes, and vegetables in what we call sustainable agricultural guidelines, which we are now rolling out to our supply base... because... is... competitive. And we work in all those projects at local levels with local farmers with local NGOs and local institutes.
Now, that brings me to the subject of this presentation – the Sustainable Agricultural Initiative, the platform we have launched early this year with a number of other food companies.
So why did we start that? I explained already to you that we as Unilever are very active in generating or bringing together knowledge on changing the way, improving the way agriculture is performed. And one of the issues which we have to deal with is certainly the long-term supply which we have to secure for our businesses, but also the real damage that’s happening to natural resources, environments, including also the social systems in rural areas which are extremely important for the continuation of agriculture.
And also we have to deal, as a branded food company, with consumer confidence in the way we deliver goods and products to their table. It has to do with quality, functional quality but also food safety, but also how we have been able to get those products from faraway places, from close-by places to their table. So... performs responsibly.
Now, just to explain a bit what we mean by sustainable agriculture. First of all, it has to be productive. That’s important, not just because of the profit margin issues behind it but also it has to do with if agriculture is not becoming more efficient, then natural habitats in the world that are diminishing will be even less. I mean, ... growing in Brazil is making big impacts on the Amazon area. Is that acceptable or not?
And I think we should find solutions to those issues. The same is... ... The... production is expected to double in the next 20 years. Does it mean that we have to, again, destroy rain forests for that, or can we do that in other ways?
So we have to do those things at the same time that we protect and improve our natural resources, but also the socioeconomic conditions of the local communities. Now, you all are familiar with... people plan a profit, and that is just to stress that we have to find ways to improve both the natural capital, the social capital and the economic capital. And there are in all those areas issues which need to be tackled. ... about food quality and food safety but also to rural socioeconomic conditions. Profit... certainly farmer income is an issue, but also how to organize a sustainable supply for businesses like ours. And at the... we have to do with biodiversity issues, water quality, etc.
Now, what is the SAI platform? We are a platform where our food companies can join, on a free competitive basis to really work together on finding solutions on sustainable agriculture and share that not only between ourselves but also with other important stakeholders.
Now, Unilever together with Nestle and..., both... companies based in Europe but all active globally, have founded this organization at the end of last year, and at this moment we have already 16 members, of which you will recognize a number of them are American-based. And we are very pleased with this quick start, and also we are pleased that all those companies are coming to this platform with examples of good practice.
We also are really inviting all companies, particularly more American companies, to join this initiative. But we always say, “You have to be committed to the goals we have set.”
Now, what are we aiming at? We really want to support the development of sustainable agriculture in a practical way, so we bring together Best Practices. We work from that, and we see stakeholders to see how we can not only define them but also find practical implementations.
If we look at that whole supply chain and value chain in which we work, then you see a huge complexity, and I think that’s one of the issues which is all the time blocking us. Also if you listen to the descriptions we had yesterday about not making progress and our beautiful statements from policymakers about what should happen and what should we do to trade policies, etc., I think supply chains are complex.
And there are many different stakeholders and many different input providers, and somewhere we have to make sure that we start working at levels that we can manage it. And what we try to do is to start working on specific areas – it can be raw material based – to really start tackling those things in those complicated supply chains, and find ways we can bring improvements to the table but also align incentives. Because all those different players you see on this overhead, they have very often different incentives. And I think the task is, not to disagree that they don’t do the things we expect them to, but to understand why they are doing that and help them to make a change also in their own advantage.
Now, some of the key activities and products we are working on. That is, we involve stakeholders, we have a network, we have general activities where we invite all different organizations, we have awareness information, the ... newsletters – but more importantly, we are supporting implementation. So we bring together companies to work not only on case studies but to assess practices and to come to recommendations on Best Practices.
And finally, we give input to discussions, dialogs on trade and policy developments and to really pinpoint areas where, if you do interventions there, you can make improvements.
A few examples on what we are working on at this moment: The way we work is that each of our members will lead a specific area where they bring expertise to the table. In the area of cereals, ... of France is leading that. At this moment, the focus is in Europe, but we expect that soon with participation of particular American companies, we can extend that more widely.
We have coffee initiatives, and Nestle and Kraft have the biggest coffee producers and marketers in the world. But also we have there a company like ..., which not now but actually is the biggest company in terms of coffee trading and coffee roasting.
And we have... Unilever’s leading initiatives, acting together with the... brought together already about 150-200 organizations on the roundtable to work on improvements in practices in... and plantations, including the conversion from rain forest into plantations.
Now, the whole process is based on involving the different stakeholders, reviewing existing guidelines... the best, and the output of those good agricultural Best Practice guidelines. We share them, so there are no secretes. It is all again precompetitive.
Now, here’s what are the expected results. We really would like to capitalize, to dialog and a joint working between all the food chain stakeholders on a precompetitive basis. We want to share the good practices. We also want to really contribute to better management of the agricultural resource base, and that includes the farmers and the rural communities. And we want a reduction of environmental quality and safety and availability risks....We are a branded food company. It is important that we reinforce the consumer confidence in everyday foods.
So that’s what I would like to share with you, and thank you for your attention.