Ten tips for creating sustainable value chains
Are you trying to create a sustainable value chain, but you're bit stuck on what to do, where to start, or not entirely sure what it would look like? Try these tips from our network event ‘Building sustainable value chains’...
16% of the world's pesticides are used in growing cotton. In India, over 4 million smallholder farmers produce it on less than one hectare, often running up huge debts to purchase pesticides and fertilisers.
1. Be realistic about what you can achieve. It's an obvious one to start with but think of a simple question - are you trying to improve the income of producers? Connect with consumers? Reduce your carbon footprint? All of it? Can you actually do all of it? Start with what you can achieve and your biggest impacts and work from there. Cadbury’s work on supply chains started with the focus on producers, the consumer benefits came later.
2. Your procurement department are your new best friends. Apart from your board (who hopefully have been your friends for a while now) these are the guys you need to engage and help – they are the link between your business and your supply chain. So provide training, help them understand how crucial their role is.and encourage them to build longer term relationships with suppliers (see point 6 below to find out why!)
3. Design in scale from day one. Think about the mainstream and not the niche, and so design with the idea that this will be rolled out across your business rather than only suitable for your niche product (which is only a tiny fraction of your sales anyway!)
4. Listen to producers. Don’t have a pre-conceived idea of what you think they want or impose what you want. Talk to them to understand the situation on the ground and their needs e.g. Veja Fair trade works with Amazonian rubber tappers, providing a decent salary, an opportunity to add value to the product and in turn it encourages the preservation of the forest.
5. Tell the story to consumers. Engage consumers with what you’re trying to do, this could be your journey (such as Farmers First Hand), or how and why you started (such as Veja fair trade).
6. Think long-term in your relationships and production systems. You need to ensure that the supplies you need are still there in 20 years' time at a price you can afford. Without proper attention now, unhappy farmers will go elsewhere and soil degradation and climate change will mean less availability of commodities.
7. Work with the right intermediaries or help set one up. Whilst direct contact with growers is great, sometimes an ethically based intermediary can deal with specific issues. If there isn’t one, why not set one up, you might not be alone in facing this problem. The Shell Foundation have a toolkit full of inspiring examples and ideas.
8. Understand your impacts and set realistic targets. Businesses such as M&S and Unilever have examined their supply chains to identify their greatest sustainability impacts. Using that information to understand what you need to do, identifying what you can do and listening to producers, will help you identify meaningful targets to create more sustainable value chains. This will also help with the eventual headache of measuring the impacts.
9. Explore how collaboration can work for you. Both horizontal and vertical collaborations can help achieve your goals. The Tea 2030 initiative is drawing together major players in the tea sector to achieve a common understanding of the future for tea and the actions they need to take forward together.
10. Use finance cleverly. In some cases you’re trying to improve the livelihoods of farmers but that is also the aim of many donor organisations. Public-private co-operation in many development spheres is increasing as is the use of Impact investment e.g. the African Agricultural Capital Fund invests in small and medium sized agricultural enterprises to improve the livelihoods of farmers in East Africa.
Would you like to get involved with our value chain projects in tea and grain? Are you interested in exploring other sustainable value chains? Get in touch - contact Ann-Marie Brouder.