Smucker Uses the Entire Toolbox for Sustainable Coffee Sourcing
The J.M. Smucker Company started out with jams and jellies, but the American food and beverage manufacturer’s extensive brand portfolio has since expanded to product categories such as snacks, fruit juices, pet foods, and coffee.
Smucker brands including Folgers, Dunkin’ Donuts, Café Bustelo, and Café Pilon make the company one of the largest annual purchasers of coffee in the United States. Sourcing green coffee, which is the traded commodity coming from growing regions that hasn’t yet gone through the manufacturing process, means navigating a complex global supply chain.
This year, as part of Smucker’s new corporate responsibility report, the company outlines how they are working with suppliers on responsible sourcing. “Suppliers must operate transparently, responsibly, and sustainably in order to minimize social and environmental risks across our supply chain,” the report states.
To find out more about the company’s coffee sourcing strategy, we caught up with Julia Sabin, vice president of government relations and corporate sustainability, and Rebecca Ott, director of sustainability. As part of her responsibilities, Sabin oversees sustainability and has been with Smucker for 34 years. Ott, who has more than 17 years of experience in the coffee industry, joined the company a decade ago through the Folgers acquisition and works on strategic interventions at the origin.
How important is coffee sourcing for Smucker?
Julia Sabin: Coffee is a big part of our business. We are a market leader in the US coffee category, and one of the largest annual purchasers and roasters of coffee in the nation.
Rebecca Ott: We’re sourcing from nearly two dozen origins at any given time. Coffee grows at the equator between the tropics, so the countries we’re sourcing from are in those regions.
What are the company’s goals for coffee sourcing?
Ott: Since 2016, we achieved the goal of sourcing 10% of our retail coffee from certified green coffee sources, which does include Rainforest Alliance and UTZ. We have the goal to maintain that volume of certified coffee.
But I’d like to point out that certification is one of the tools in our toolbox. Certification is not always feasible for smallholders and, because of that, they’re the most vulnerable producers. We looked at our sustainability strategy, focusing on balancing certified coffee purchases with more direct strategic interventions. We make an effort to utilize the full toolbox to support sustainability.
What is the company’s approach to making coffee sourcing more sustainable?
Sabin: Our strategy built on three legs. The first focus is responsible sourcing. The second is smallholder support. We feel passionately about helping vulnerable small producers to be more successful with their farming practices, resulting in stronger yields. The third is integrated environmental efforts.
We have affected over 16,500 smallholder farmers, and provided over $3.6 million in loans. We also have goals around training, financing, climate change adaptations, addressing coffee rust, and capacity building.
Ott: It’s looking at how we take the complexity within the coffee supply chain and balance the activities — figuring out the ways we can improve productivity and have those positive effects within the communities in which we are working.
Have there been significant challenges as you’ve pursued this strategy?
Ott: Location is one of the challenges. In Indonesia there are a lot of remote villages, and it takes motorbike rides for hours through mountainous dirt roads to get to some of these producers. In places where you have very low yields, producers have never received or have very limited farming assistance. So when you bring opportunity to learn and improve agricultural practices, it improves the environmental, economic, and social conditions for them.
Also, a lot of the work we do with smallholders is through training modules. You have to gain the trust of producers, and explain the benefits of attending trainings and participating. In other models, there’s some incentive —providing them with fertilizer or inputs. We empower producers through access to knowledge.
How do you address these challenges?
Ott: Partners become very important because they are very familiar with the culture.
Sabin: Our public partners like USAID are working on projects to bring the best of development knowledge, which complements our commercial and supply chain expertise. On-the-ground partners include TechnoServe and the Neumann Foundation. They bring the depth of knowledge in the coffee sector and that training experience. We have worked with these organizations for a number of years.
Where does productivity and yield fit into sustainable coffee sourcing?
Ott: Productivity is critical to the long-term sustainability of these coffee farmers. Supporting them and achieving greater returns from coffee is that win-win. It starts with improved farming practices, and many are fairly straightforward — looking at their farms, understanding the age and quality of trees, which types of trees they are actually growing, the farm layout, the distance between trees. Then you can move to more advanced techniques like pruning, plant nutrition, and soil quality.
Measuring productivity is important in these projects, as is access to financing. We measured how much credit we’ve been able to facilitate. We also measure the adoption of practices. We look at the organizational development, and how many coffee farming groups we’ve built better governance structures and systems.
Sabin: When you think about a small producer, increasing nearly 40% of their yield economically changes their lives, their families, and their children. It has other downstream effects because once they are trained, there’s less likelihood that they’ll leave and build somewhere else. They can live on that farm for generations.
Are you optimistic about the future of sustainable coffee sourcing?
Ott: Coffee sustainability has gotten a lot of attention, and rightfully so. There is also interest in maintaining coffee livelihoods. The industry as a whole is looking at a lot of different models. I am optimistic that, as an industry, we can continue to find ways to empower producers and increase resiliency because there will always be fluctuations — climate, weather, markets. Building that resiliency is critical for these smallholder producers.
Ott: We continue to identify new opportunities to support coffee farmers. Our direct intervention work in Indonesia supporting smallholder growers continues through 2019, and we launched a five-year commitment in Honduras in 2017. We remain platinum sponsors of World Coffee Research, a critical organization globally. Their mission is to maintain supplies of quality coffee in a sustainable manner.
Sabin: We have worked hard to develop extensive internal processes and controls to ensure we’re able to purchase green coffee in a responsible manner. Our Master Agreement and Operating Guidelines, which all suppliers are required to sign, are designed to address human rights laws, environmental practices, and safety procedures.
Additionally, what’s amazing to me is the longevity and expertise of our coffee training team. They have years of experience in the industry and have been able to develop longstanding supplier relationships. Everything comes down to relationships and trust.
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