November 2014

WELCOME TO THE NOVEMBER 2014 EDITION OF THE SUSTAINABLE SOURCE

Dear readers,

Last summer I moved to the global Sustainable Sourcing team, where together with a great team of enthusiastic professionals we drive Unilever’s agenda to source all of our agricultural materials sustainably by 2020.

Within my portfolios I am focussing on the two routes to achieve sustainable ingredients: self verifi-cation through SAC (e.g. sugar beet, sunflower and rapeseed oil) as well as certification through third party standards, particularly for cane sugar. With the support of you as our partners, we have made incred-ible progress so far, but I am sure we can do even better through co-petition.

By cooperating with our competitors we are convinced we can make even bigger steps and make a real difference, whilst avoiding duplication of efforts. Focus on the Sustainable Agricultural Initiative, leveraging scale through landscape approaches and any other potential forms of collaboration will be the key success factors for 2015 and beyond.

In this edition you will find some fantastic news about the Dow Jones Sustainability Index, an exciting update on soy, a few new partnerships we have signed as well as a spotlight on some of our fantastic supplier initiatives.

Happy reading and if you have any thoughts or comments, please send them to unilever@muddyboots.com.

Leslie Leinders

My name is Leslie Leinders, I was born and raised in the Netherlands. After my studies I started my career with Unilever in the local supply chain with our Frozen Foods business in the Netherlands. In 2004 I joined our European Procurement organisation and within 10 years I was responsible for several categories, varying from dairy & egg products, sugar & cocoa, and ultimately taking global responsibility for cocoa & chocolate. In these roles I developed a great interest and passion for sustainability, for example I am proud of initiating the transition of our Hellmann’s mayonnaise to cage free eggs or transforming our cocoa for Magnum towards it Rainforest Alliance certification.

CONTENTS 3. KEY FACTS UPDATE4. DOW JONES SUSTAINABILITY INDICES - UNILEVER NAMED LEADER5. MUDDY BOOTS UPDATE 7. YOUR AUDITS AND ASSESSMENTS8. SOY PLEDGE9. YOUR CONTROL UNION11. NEW PARTNERSHIPS ANNOUNCED AT SUPPLIER SUMMIT13. UNILEVER’S JOURNEY TO 100% SUSTAINABLE PALM OIL15. MEET A SUPPLIER - SUNRICH16. MEET A SUPPLIER - LEMON KING17. MEET A SUPPLIER - FRUCO18. BRAND SPOTLIGHT - RAMA

SUSTAINABLE SOURCINGKEY FACTS UPDATE

5,863 DOCUMENTS HAVE BEEN SUBMITTED SO FAR:

3,077 – Cool Farm Tool input spreadsheets

1,891 – Biodiversity Action Plans

1,330 – Other documents

1 year ago we introduced the requirement to attach your Cool Farm Tool input spreadsheet and Biodiversity Action Plan when submitting your farmer assessments.

IN THE MUDDY BOOTS ASSESSMENTS PLATFORM THERE ARE:

60,322 active farm sites

486 active processor sites

Total assessments submitted in 2014 are 18% higher than they were at the same time in 2013.

KEEP UP THE GOOD WORK!

ENHANCING LIVELIHOODSSince our last newsletter, Unilever has expanded its Sustainable Living Plan targets to include a more specific focus on Enhancing Livelihoods. You can read more about this here: http://www.unilever.com/sustainable-living-2014/enhancing-livelihoods/

One element of this is Unilever’s Responsible Sourcing Policy. Enhancing livelihoods is about the impact that Unilever as a business has on people’s lives. The Responsible Sourcing Policy has recently been launched to replace the supplier code and to drive the Enhancing Livelihoods pillars of the USLP. This incorporates the UN Guiding Principles on business and human rights and the roll out is going well.

1. Business is conducted lawfully and with integrity2. Work is conducted on the basis of freely agreed and documented terms of employment3. All workers are treated equally and with respect and dignity4. Work is conducted on a voluntary basis5. All workers are of an appropriate age6. All workers are paid fair wages7. Working hours for all workers are reasonable8. All workers are free to exercise their right to form and / or join trade unions or to refrain from doing so and to bargain collectively9. Workers’ health and safety are protected at work10. Workers have access to fair procedures and remedies11. Land rights of communities, including indigenous peoples, will be protected and promoted12. Business is conducted in a manner which embraces sustainability and reduces environmental impact

THE FUNDAMENTAL PRINCIPLES OF THE RESPONSIBLE SOURCING POLICY ARE:

UNILEVER TOPS INDUSTRY GROUP IN DOW JONES SUSTAINABILITY INDICES

BEST-IN-CLASS APPROACH

The DJSI is a globally recognised independent bench-mark that measures proven company performance across material economic, environmental and social criteria. This year is the 15th anniversary of the DJSI, with Unilever being one of just 15 companies to have been a member of the DJSI World Index since it began in 1999.

Jeff Seabright, Chief Sustainability Officer at Unilever, says: “This is a proud moment for Unilever. Our thanks go to everyone who contributed to this annual submis-sion and the results reflect the progress we are making in delivering the Unilever Sustainable Living Plan.”

INDUSTRY-LEADING SCORES

Unilever achieved an overall score of 90 out of a possible 100, with maximum points being awarded in five criteria including Health & Nutrition and Packaging.

High scores were achieved for Innovation Management, Supply Chain Management, Operational Eco-efficiency, Human Capital Development and Labour Practice Indicators and Human Rights.

Elsewhere, Unilever was the best company within the Food Products industry for both the Economic and Social dimensions of sustainability.

DEMONSTRATING A LEADING POSITION

The DJSI Industry Group Leader Report, compiled by RobecoSAM, states: “Unilever continues to demonstrate a leading position in the global food and personal care space. Strong innovation and a focus on product stew-ardship elements such as packaging and raw material sourcing are embedded in the company’s strategy.

“Sustainable sourcing remains a key focus area, and Unilever supports local sourcing, development and human rights. Transparent communication on supply chain issues and indicators ensures awareness among customers and other stakeholders,” it adds.

The Report also highlights Unilever’s achievements in nutrition with 31% of the company’s food and refresh-ments products meeting the highest nutritional standards for their respective product categories, based on globally recognised dietary guidelines.

DOW JONES SUSTAINABILITY INDICES REVIEW

The DJSI annual review 2014 results including the S&P Dow Jones Indices/RobecoSAM Press Release and the Industry Group Leader Report are available at www.sustainability-indices.com.

Unilever has been named leader of the Food, Beverage and Tobacco industry group in the 2014 Dow Jones Sustainability Indices (DJSI) review - one of only 24 companies to be named as industry group leaders.

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MUDDY BOOTS SOFTWARELATEST UPDATES

If you are completing SAC Assessments for the fourth time this year please be aware that in order to continue to be counted as ‘Sustainably Sourced’, 80% of applicable ‘Must’ category questions per SAC chapter must be achieved, it was 50% for assessment sets 1-3. If you fall below 80% your assessment set will be counted as non-compliant.

This continuous improvement functionality was launched in the Muddy Boots Assessments platform at the beginning of September. The first supplier to be counted as ‘Sustainably Sourced’ for their fourth assessment set is Cedenco Foods New Zealand Ltd for sweetcorn - well done to the team at Cedenco Foods!

If you are working on assessment set 4 remember to check your scores in the Sustainably Sourced Report before you close your assessment set. For help with this please view the Unilever SAC Reports webinar http://en.muddyboots.com/unilever-quickfire-webinars or contact support@muddyboots.com.

Anna Powell, your Muddy Boots Account Manager.

CONTINUOUS IMPROVEMENT

The number of sites loaded on the Muddy Boots Assessments platform on page three is testimony to your commitment to the Unilever sustainability program and a high level of software adoption in the last year. Many suppliers are working on their SAC Assessments for the fourth time - look out for our section on Continuous Improvement and details of how to continue to be counted as ‘Sustainably Sourced’ in your fourth assessment set.

In this section we also introduce you to the rebranding of the Office and Reporting websites and recent changes to some of your reports. Our current focus is on updating your reports to make your data really simple to access and there are some exciting new developments coming soon, read on to find out more.

We’re also updating your reports to make your data really simple to access. So far the Sustainably Sourced, Individual Non Conformance and the Combined Non Conformance reports have been updated, here are a few of the changes:

• Simplified, smart report filters

• Assessment sets no longer split into assessment years. All sets displayed on the same report with a new ‘Assessment Number’ column

• Improved Excel export format

• New reports will exist alongside old reports during the adoption period

FURTHER REPORT UPDATES COMING SOON

• Performance analysis dashboard

• Updated metrics reports

EVEN BETTER REPORTING

In 2015 the Muddy Boots annual licence for Unilever suppliers will include Greenlight Supplier Approval. This is our new industry wide collaborative software that connects all members of a supply chain together to easily access, update and share due diligence information. There will be more information about this coming later in the year. You can find out more about Greenlight Supplier Approval at: http://en.muddyboots.com/supplier-approval.

GREENLIGHT SUPPLIER APPROVAL

Our name has changed! Quickfire is now called ‘Greenlight Assessments’. Quickfire’s sole purpose is to underpin safety and integrity in the supply chain, it therefore seemed a natural progression for Quickfire to join the Muddy Boots Greenlight family of solutions; a well-known brand that resonates quality from field to fork.

It means that our customers of multiple products will no longer need to get to grips with very different platforms. We’ll be using the same colour scheme, the same simplistic layout, the same icons, menus, and more.

And, if nothing else, at least the name means something now! The industry and our customers are no longer focussing on third party audits, but instead they are empowering their suppliers with self-assessments. This is just one step in our recent work to improve the overall appearance and usability of the whole Assessments platform.

QUICKFIRE TO GREENLIGHT ASSESSMENTS

GET IN TOUCH

For further detail on anything mentioned in this section please email sales@muddyboots.com.

If you have any technical questions related to Greenlight Assessments (Quickfire), please contact support@muddyboots.com.

SGS VERIFICATION AUDITS In the final quarter of the year we have once again been undertaking our annual round of verification audits with third party auditors SGS. These visits aim to give our claims of sustainable sourcing additional credibility, so that we can talk about them externally and share the great sustainability work that suppliers are doing. This year 31 suppliers have been selected in 18 countries. SGS has been visiting both the supplier and three of their farmers to check that self-assessments have been correctly completed and that the results are reliable.

Audit results will be available in December. If you have any questions about the process please speak to your usual Unilever contact.

SAC 2015 PILOTS Over the past year Unilever has been developing an update to the Sustainable Agriculture Code. Many of you gave some really useful feedback, for which we would like to thank you. Several suppliers are now testing the update with their farmers, which will help further highlight areas which are not clear or which cause difficulty. The pilot will run over the next few months and the new code will be published next year.

END OF YEAR ASSESSMENT SUBMISSION PEAK As you know the end of the year is a busy time for assessment submissions. Last year over a third of total submissions took place in December (see graph below) and call volume to the Muddy Boots support line was very high. Some suppliers almost missed their deadline for submission. In order to prevent problems this year, we strongly advise you to start your assessment submission process as soon as possible – there are 86 suppliers with a December deadline still outstanding. Submitting early will allow Muddy Boots to give you the best support possible, give you confidence in reaching your deadline and prevent you from losing Sustainable Source status. Submitting early does not affect your deadline for next year – ‘Sustainably sourced’ status resulting from any submission made before December 31 2014 will have an end date of 31 December 2015.

YOUR AUDITS AND ASSESSMENTS

As we come to the end of the year, here is a reminder of Unilever’s SGS Verification Audits, the results of which will be available in December, and your assessment submissions that must be complete before the end of 2014.

SUSTAINABLE SOY PLEDGE AT WALMART

On October 6, Mike Faherty, Unilever’s VP Foods North America, delivered a pledge at the Walmart Global Milestone meeting to have all Unilever soy sustainably farmed by 2017. The Unilever Procurement team has been working hard to support this.

Unilever, along with United Suppliers, were the only guests asked to make a pledge on stage. Other companies, such a Kellogg’s, General Mills, Campbell’s and Pepsi, were invited to stand and be recognised for the work they were also doing.

Unilever colleagues joined the packed audience to see Mike deliver our pledge, linking sustainability to the total business machine and the great brands we sell at Walmart.

This was a great moment for Unilever, with personal thanks coming from Walmart executives such as Jack Sinclair, Executive Vice President, Grocery Division, and Kathleen McLaughlin, SVP, Sustainability.

Walmart’s press release demonstrates alignment with the USLP, and the event has also been featured in Supermarket News and other media.

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YOUR CONTROL UNIONMARIA CLARA LISSARRAGUE

The ULSAC programme gives Unilever suppliers the opportunity to be at the forefront of global market trends, it is in the interest of suppliers to make the most of the tools provided. In order to implement this sustainability programme and accomplish its goals it is important to have commitment from the whole operational team and confidence that sustainability is an added value, which is not always tangible in the short term.

During my work as a consultant for this project I had the opportunity to visit suppliers producing various types of products with different cultivation techniques. This year I visited a supplier that was close to reaching compliance with the ULSAC sustainability requirements. When I asked the manager what he thought was the

most important achievement, he confirmed that it is the experience of working within an interdisciplinary team during the implementation process.

When I visit a supplier for the first time they are often worried about the biodiversity initiatives. The farmers are not familiar with the concept of biodiversity and normally associate this with polar bears in the arctic or colourful flowers in the jungle, but never with their own plantations. After sharing different ideas, the farmer starts to understand how these requirements can add value to their farms, and they begin to value the flora and fauna in the (non) arable areas.

Being a Unilever SAC consultant in Argentina has been a great experience for me. I started working with sustainable standards as a Control Union auditor. My initial role was limited to verifying the compliance of the operator to the programme requirements but now as a consultant my task is to combine my own experience with the strengths of each Unilever supplier. It is crucial to interact and communicate with the farmers and to understand the different cultures and ways of production.

Pictured from left to right: Cristián Becerra, Natalia Caro, Joselyn Hermosilla, Javier Hernandez, Maria Clara Lissarrague and Franco Diaz.

Sometimes the biodiversity initiatives need to be adjusted during implementation. A very good example was the strategy developed by a farmer placed in the dry province of San Juan (Argentina) to avoid foxes breaking the irrigation hoses when they wanted water. The farmer decided to spread small containers around the plantation so the foxes could drink from them. What the farmer didn’t notice was that the water was heated by the sun during the day, so the foxes still preferred the water from the irrigation hoses. Finally the containers were moved close to the holes of the irrigation hoses, so the water was renewed each time the crop was irrigated. This gave the foxes (and other thirsty animals) access to fresh water from the containers. Through this initiative, the farmer has also reduced the plastic waste produced by the broken hoses.

Another good biodiversity example comes from Mendoza (Argentina): where the supplier encouraged their farmers to use a wooden pole as an owl perch, this was particularly relevant as a nest was found in the area. The farmers agreed to build the owl perch as a biodiversity initiative, there was just one 60 year old

farmer who was reluctant to do this. He went ahead, but without motivation, until his little granddaughter discovered the owls on his farm. From that moment, the grandfather and the little girl shared the birds care and did other farming activities together.

During my visits I often discover less obvious benefits such as the improved relationship between suppliers and farmers through being partners in the sustainability project. Interest from new professionals in these (and other) sustainability initiatives is growing which suggests that the sustainability pillars can be spread in agriculture through the enthusiasm of farmers and employees and also through the motivation of neighbouring farmers.

I want to encourage the commitment of suppliers and their farmers on their sustainability journey. Sustainability is based on continuous improvement and there will always be new challenges.

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NEW PARTNERSHIPS ANNOUNCED AT SUPPLIER SUMMIT

At this year’s summit, attended by more than 400 suppliers in London on 1 September, Unilever announced two new partnerships. One is with the World Resources Institute, a global research organisation that helps leaders turn ideas into action to sustain the world’s natural resources. The other is with Solidaridad, an NGO that helps companies create sustainable supply chains.

HELPING END DEFORESTATION

Unilever is partnering with the World Resources Institute to increase transparency in agricultural commodity supply chains with the aim of ending tropical deforestation.

The partnership will enable Unilever and its suppliers to draw on the resources of Global Forest Watch (GFW) Commodities, a project of Global Forest Watch, which offers an online monitoring and alert system that enables better forest management.

GFW Commodities has produced a suite of online tools that are used to monitor forest cover change around supply areas and processing facilities such as palm oil mills. In using these tools, Unilever will be able to make better informed sourcing decisions and improve its reporting of performance against sustainability commitments.

Deforestation has serious repercussions on the global climate, local livelihoods and biodiversity – posing a

growing problem to commodity businesses. Research suggests that the world lost 2.3 million square kilometres of tree cover from 2000 to 2012.

Unilever is committed to reducing its environmental impact and ending deforestation across its supply chain through the Unilever Sustainable Living Plan, which sets out to source 100% of agricultural raw materials sustainably by 2020, with a strong focus on biodiversity and zero net deforestation.

“Unilever is firmly committed to transparent and sustainable sourcing of raw materials, and GFW Commodities is providing us with the means to reach our targets,” said Pier Luigi Sigismondi, Chief Supply Chain Officer. “In today’s world, businesses can no longer ignore the risk deforestation poses to vital ecosystems and people’s livelihoods. This partnership will bring new focus to see where our risks are highest and to improve forest management.”

Read more about the World Resources Institute partnership on www.unilever.com.

Find out more about the GFW Commodities tool.

Now in its fourth year, the global Partner to Win Supplier Summit has become a key event in the Unilever calendar. Strategic supplier partners join Unilever leaders from across the business to discuss how to grow sustainably together in partnership.

IMPROVING THE LIVES OF 1 MILLION PEOPLE

The aim of the new strategic partnership with Solidaridad is to improve the lives of one million people in Unilever’s extended supply chains.

The partnership will focus on promoting gender equality, and improving agricultural and labour practices, as well as land management and supporting young agricultural entrepreneurs. It will be targeted at key raw materials – tea, cocoa, sugar, palm oil, fruit and vegetables, soy and dairy – in Africa, Latin America and Asia.

This builds on Unilever’s and Solidaridad’s long track record of creating sustainable supply chains that already engage more than 150,000 smallholder farmers and workers in India, Mexico and Colombia.

Dhaval Buch, Chief Procurement Officer, said: “This partnership helps drive real change across our value chain. We are branching into new areas, which is why it is so important to have the experience and knowledge of an NGO like Solidaridad. This program will also analyse and address gender issues in each project as well as providing access to training on agriculture, finance, health and hygiene and nutrition.”

The partnership is an example of how Unilever’s Responsible Sourcing Policy will be brought to life. The policy, published earlier this year, stems directly from Unilever’s ambition to increase its positive social impact.

Read more about the Solidaridad partnership and watch a short video that outlines its purpose on www.unilever.com.

TARGET TO IMPROVE A MILLION LIVES

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UNILEVER’S EUROPEAN FOOD BUSINESS REACHES 100% TRACEABLE, CERTIFIED SUSTAINABLE PALM OIL

58% OF GLOBAL VOLUME NOW TRACEABLE TO KNOWN SOURCES

All palm oil directly sourced for its European Foods business will be 100% traceable and certified sustainable by the end of 2014.

Unilever now has visibility of around 1,800 crude palm oil mills, representing around two-thirds of all mills in the global palm oil industry.

58% of palm oil is now traceable to known mills.

Knowing the origin of palm oil is vital to halt deforestation which blights communities and the environment. The Unilever Sustainable Palm Oil Progress Report 2014 was published at the 12th Round Table of the RSPO in Kuala Lumpur.

2014 A DEFINING YEAR

Pier Luigi Sigismondi, Unilever Chief Supply Chain Officer, said: “2014 has been a defining year for our goal to create a more transparent palm oil industry. Knowing where it comes from is a critical step in the journey. The challenge is enormous and not easy to achieve but we are determined and can now report good progress. We want to share our learnings with the rest of the industry.”

Mr Sigismondi, continues: “This is about doing the right thing for our planet and our consumers because you cannot have a healthy business in an unhealthy world. We want to continue to meet our consumers’ every day needs in decades to come and this means sourcing in a fully sustainable way to future proof our supply chains. Halting deforestation is our end goal and this is what we work towards.”

OPPORTUNITIES FOR SMALLHOLDERS

Unilever is firmly committed to smallholder farmers and with its suppliers, works towards improving livelihoods, incomes and working conditions.

Engaging with smallholders on palm oil is the next stage of the challenge and is critical to achieving full traceability. For many smallholders in developing countries, palm oil provides a way out of poverty and a chance to raise their families’ aspirations, enabling them to send their children to school. Unilever is involved in programmes of this type, such as a pilot partnership with IDH in North Sumatra. Additionally, a broader social impact partnership with Solidaridad focuses on palm oil as a key commodity in West Africa with potential to scale into Asia and Latin America.

Unilever is also gathering many learnings from its global smallholder farmer programme with other commodities and applying this knowledge to palm oil.

It is Unilever’s vision that, by 2020, we will achieve a transformation of the palm oil market to see the entire industry to move to 100% sustainable palm oil. Unilever believes that a profitable and sustainable palm oil sector must get the right balance between social, environmental and economic objectives. This is a shared responsibility between governments, the private sector and society at large. Hence, Unilever is working with industry leaders and NGOs to find a solution to halt deforestation, protect peat land, and drive positive economic and social impact for local communities.

MEET A SUPPLIERSUNRICH

Sunrich Manufacturing Corporation is among the first suppliers in the Philippines that responded to Unilever’s request for support in achieving its sustainability objectives. It manufactures dehydrated fruits, vegetables, spices, meats and seafoods used for Knorr products. Here, Lorenz Tolentino, Control Union Consultant, shares Sunrich’s journey with us.

The journey started with two key employees attending the Regional SAC Training in Jakarta, Indonesia in June 2013. Learning about Unilever’s sustainability principles from Control Union, and appreciating the benefits to propel the business, and ensure the welfare of their employees and other stakeholders in their supply chain. By implementing biodiversity-vigilant production methods for their growers, they brought a big objective back to the Philippines - to gain sustainability for their main product, tamarind (Tamarindus indicus), before 2014.

It would not be an easy road to achieve their goal, which became clear during the first meeting conducted by Control Union Philippines. Sunrich was faced with different challenges due to the nature of how tamarind is being produced in the country. It is considered as a garden plant and has been used for more than ten decades as a fence for family compounds. It is a neglected fruit that was only recognised to have a market value with the introduction of Knorr Sinigang Mix. In some areas the tree is grown in homes and in small numbers. During the mapping of farms, Sunrich discovered that the tamarind trees grow abundantly on mountainous or upland regions. Since there were no agricultural production protocols being implemented, Sunrich was faced with the following challenges:

1. Supply chain complexity2. Logistics and geographical mapping3. Availability of technical resources4. Availability of science-based production methods

Control Union Philippines, customised its service provision locally in order to provide the best support to Sunrich. It meant more coaching activities and maintaining contact which was possible through desktop and mobile communica-tion. With the commitment of the company’s senior manage-ment, Mr. Garcia, the President and Ms. Alarcon, and the Vice President, the team worked their way out of the grey zone.

They did what most small manufacturers in the Philippines are afraid to do - they staged a number of stakeholder meet-ings with the farmers and other farm workers to further understand the intricacies of the chain; they consolidated all available resources to establish a simplified production protocol for their growers; they crossed rivers and climbed mountains in the different areas of the Philippine archipelago several times to monitor the status of the implementation of their sustainability activities.

It was not a smooth path, but the effort put in by Sunrich was balanced by a desire to operate in a manner that does not compromise the welfare of anyone, or anything, including the environment.

This year, Sunrich has started its tree planting activities both in Batangas and Bicol areas, a total of 3,400 seedlings were planted from June to July, 2014.

For tamarind, a once neglected plant, to be produced using sustainable methods, is a great result of the strong partner-ship of the local offices of Unilever Philippines, Control Union Philippines and Sunrich. Everybody is geared up towards the frontiers ahead - sustaining what was started, and cascading the activities to the other raw materials.

The company processes 30% of the total processing lemon volume in Spain, and is the largest lemon processor in Europe. Over 100,000 tonnes of fruit (including lemons, oranges and clementines) are processed in the 30,000 m² facility, with the fresh market being the main driver for farmer’s decisions. Spain delivers an average of 70% of its lemons to the fresh market, leaving only the fruits that do not fulfil the physical quality requirements of the fresh market for processing.

Lemon King are based in Murcia - a very dry region of Spain, as such Unilever’s efforts have been focused on managing water use through drip irrigation. The program is facilitated using the ‘Cool Farm Tool’, which was originally developed by Unilever and researchers at the University of Aberdeen to help growers measure and understand on-farm greenhouse gas emissions. It has been tailored in this instance to manage the use of water, and Lemon King has found it to be very successful. Now 90% of irrigation is achieved using a drip system, not only has this reduced the amount of water used for irrigation, it has also allowed the company to colonise semi-desert areas to expand the orchards.

Lemon King remains a family-run business and is deeply linked to their local agriculture upstream. All of their produce comes from their own orchards, where their efforts are dedicated to improving the step-by-step processing of their fruits. The company hires an agronomist and offers technical advice to supplying farmers.

Lemon King achieved excellent results in their first Sustainable Agriculture Code (SAC) assessments completed in the Muddy Boots Greenlight Assessments platform in June this year. 100% of the volume that Unilever sources from Lemon King can now be claimed as sustainably sourced, and their SAC Diploma is valid until 30 June 2015. SAC assessment results from suppliers such as Lemon King play a critical role in achieving Unilever’s goal to purchase 100% of its fruit from sustainable sources by 2015.

MEET A SUPPLIERLEMON KING

Unilever has been working with their Spanish lemon supplier, Lemon King, to reduce water used to grow crops. This has involved working with farmers to implement proper management practices, as well as making better use of public/private infrastructures. For example, a 500km aqueduct and individual reservoirs have allowed water to be assigned to specific farms proportionally.

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The idea first sprouted in 2012 when Colombia’s President, Juan Manuel Santos, met with Unilever CEO, Paul Polman. During their meeting the pair discussed the idea of growing tomatoes for Fruco locally and the mutual benefits this would have for both Colombia’s economy and the Fruco brand.

After several months of discussions and planning, a pilot project, lead by Unilever’s Colombian External Affairs and Procurement teams, started in June this year, with tomato seed trials being carried out north of Cauca and in Valle del Cauca Departments. These crops will be carefully monitored for six to seven months to see how well they flourish in the local soil. Unilever will assist the smallholder farmers involved in the trial with improving their agricultural practices, crop yields and profits to give everyone the best chance of success. Unilever and its tomato seed supplier, Syngenta, are simultaneously working on feasibility plans to test the price competitiveness of locally grown tomatoes versus imported tomatoes and the capabilities we have in our value chain to meet the project needs, such as land availability and local tomato processing capabilities.

Colombia Corporate Communications and USLP Director, Guillermo de la Torre, said with Colombia still recovering from internal conflict, it is hoped this project will contribute to the on-going peace process: “This initiative will provide thousands of jobs to people that are willing to enter into the peace process and don’t have any immediate source of income.”

He said consumers recognise when brands make an effort to source local ingredients and support the local economy, saying; “not only will this initiative help thousands of smallholder growers and reduce transportation costs and CO2 emissions; it’ll drive brand preference for Fruco too, making this a sustainable initiative that feeds into our USLP ambition in every sense.”

The results of the feasibility study are expected in two years, at which point Unilever will decide if the quality, productivity and price are right to start supplying locally.

MEET A SUPPLIERFRUCO

Colombian local jewel, Fruco, is sowing plans to create brighter futures for farmers and a better deal for the local environment. Colombia’s much loved tomato sauce brand has begun an inspired attempt to source local tomatoes for its tomato sauce and paste products.

BRAND SPOTLIGHT RAMA

“Spreads are like margarine, but with less fat. To be classified margarine, fat content must be 80% or more, similar to butter. Because people want to live healthier lives, we have worked hard to reduce the amount of fat in our products. For the production of margarine, the main materials we buy are a selection of vegetable oils (e.g. Rapeseed oil, Sunflower oil, Palm oil) which are then mixed with a pinch of salt leading to our final product, the Rama margarine (Reactive: some other specific ingredients will be added for reasons that will be explained by the factory managers).

“To guarantee our consumers the best quality and to secure safe products in all cases, we have set very clear requirements with regards to quality assurance at our suppliers as well as in our own plants. We assess our Supplier’s Quality Systems ensuring their factories work against the optimal quality and safety conditions. This is all being assured through clear requirements and audits.

“Only then do we define the actual Ingredient Specifi-cations (definition of composition and quality require-ments); In order to know what we have to buy, we de-fine an ingredient specification. A specification is always jointly defined by R&D, QA and our supplier. Together we agree the most optimal definition of an ingredient needed in terms of functionality, quality and efficiency. Important aspects are taste, colour, melting behaviour and absence of free fatty acids.

“So our main focus with our ‘traditional’ suppliers is to guarantee quality standards through factory au-dits defining which quality level a factory should be operating at and product specifications defining what composition and quality aspects the material should comply with.

“Product quality, food safety and security of supply are all equally important factors for Procurement based on which supplier selection is being conducted. Clearly pricing is an important element as well but if the first attributes are not met, we do not even need to start to talk about cost.

“Our focus on quality is stronger than ever but with our corporate ambition to double our business whilst halving our environmental footprint and improving the livelihoods of a billion people we have added a new dimension to our strategy, which is sustainability. With this strategy, sustainability and traceability have become equally important factors to our sourcing process. Also here we are very demanding and consider those factors to be pre-requisites for a strategic relation-ship. With the transparency we are creating we achieve two goals in one: through the transparency we know where our ingredients we buy are coming from and on top of that we much better understand the supply chain and its respective cost drivers hence we can determine much better where there are still inefficiencies to be tackled.”

Leslie Leinders, Procurement Manager, takes a look at how Unilever Procurement sustainably sources materials for the Rama brand.

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Traditionally, Unilever sourced its vast majority of volumes of ingredients from parties one level up in the value chain i.e. processors/traders agreeing its require-ments with those processors. So in the case of rapeseed we only engaged with our first tier suppliers being the oil crushers and refiners and considered them to be responsible for the sourcing of their materials.

Today, we are more and more engaging upstream in the upstream supply chain i.e. we connect with growers to even better understand their issues, to guide them on the implementation of sustainable practices and to provide full transparency to our consumers of our supply chain.

This practically means that we are mapping the origin of the rapeseed enabling us to tell our consumer as ex-actly as possible, where the materials we buy are grown. Knowing the origin of our ingredients we are getting much more involved in the upstream supply chain up to the farmers. Working closer together with our suppliers and their farmers obviously is only possible now that we increased our knowledge about where our products are originally coming from.

In general we do not pre-determine where the supplier needs to grow its crops. As we are often faced with existing historically grown supply chains, often based on the farmers expertise where to best grow specific crops, our first aim is to make the origin transparent.

Once we know the source of our ingredients we embark together with our suppliers and their suppliers on a journey to implement the Sustainable Agricultural Code. As part of the Unilever Sustainable Living Plan where we consider the full supply chain (raw materials, processing, transport, consumer) we have introduced the Sustainable Agricultural Code enabling all our agri-cultural materials to be Sustainably Sourced. This code describes in 11 chapters what we as Unilever consider to be sustainable and focus around soil, waste, agrochemicals, water, etc.

Once farmers and suppliers have assessed themselves against the Sustainable Agricultural Code and com-ply with the Scheme Rules they are considered to be sustainable hence we include them in our Sustainable supplier database. In order to provide assurance and credibility of the Unilever process we conduct an annual auditing program through 3rd party SGS.

CLOSER LOOK AT THE SUPPLY CHAIN

Step 1: is related to growing the seeds by the farmer, where you already heard the explanation by Landwirt Hanssen. Based on the gap analysis we do with the growers, an action plan is being developed in case a supplier does not yet comply with Unilever’s sustain-ability requirements. In case they do comply, we also define the continuous improvement activities and agree a Biodiversity Action Plan.

Step 2: delivery/collection of the harvested feedstock (i.e. seeds) from the land into cooperatives who store the seed. Storage is required to bridge the gap between the consequent crops as well as the gap between production runs at primary processors. First reason to collect the seeds into a central location is the fact that farmers do not have the capacity to store on site. Secondly central storage at coop is both more efficient and assures higher quality as being managed through specialists. On top of that coops also play a role of financing and increasing leverage. This is a first step of bundling volumes and reduces the possibility to trace back to farmer level.

Step 3: from storage silos, the seed will then be trans-ported into the processing facilities of the oil crushers who run a more or less continuous bulk operation, meaning that the volumes from several coops will be

bundled together in silos at crusher’s site. So at this stage of the supply chain we can still determine the regional origin of all coops and their farmers who sup-plied the seeds. As long as crushers are only processing seeds from the above mentioned origins we can still determine the regional origin of the oil which is pro-cessed.

(Sometimes crushers need to buy in seeds from other origins in order to keep their factories running. Several reasons for this can be mentioned e.g. crop failure at regional origin, factory economics and capacity issues at other processing plants.)

Step 4: another step of storage and transport (now of the oil) will then be conducted to either deliver the oil to a refiner or to the customer who will process the oil as ingredient into its end products.

As you can understand from the described supply chain, depending on the complexity of the supply chain we can more or less track up to farm level where our ingredients originate from. In some more complex supply chains we will be able to know this to mill, coop or region level hence we can provide a high level of traceability.

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Anna PowellUnilever Account Manager

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