At The Coca-Cola Company, we rely on agricultural ingredients for our products. In 2013, we set a goal to more sustainably source our priority ingredients by 2020. Priority ingredients include cane and beet sugar, high fructose corn syrup, stevia, tea, coffee, oranges, lemons, grapes, apples, mangos, pulp and paper fiber for packaging, palm oil and soy.
For us, ‘sustainably sourced’ means that our farm suppliers meet certain standards, among other requirements, relating to human and workplace rights, environmental protection, and responsible farming management, otherwise known as our Sustainable Agriculture Guiding Principles (SAGP). Consisting of 15 principles, our SAGP establish the framework for defining our commitment to sustainable sourcing and are integrated into internal governance routines and procurement processes.
Making Sustainable Sourcing Progress
With agriculture accounting for approximately half of what Coca-Cola spends on inputs to our products and packaging, we have an opportunity and responsibility to positively contribute to more sustainable agriculture practices worldwide. We are working toward engaging suppliers of all our key ingredients through our Supplier Engagement Program, which includes a Seven Steps to Supplier Verification framework of improvement toward meeting our SAGP – from step 1, “Initiating Engagement” through step 7, “Entire Supply Audited,” where an audit meeting a satisfactory level has been carried out for part of the supplier’s entire volume to Coca-Cola.
Our agricultural ingredients fall into four primary categories: fruits, sweeteners, coffee and tea. In 2016, we launched a Sourcing Map that reflects over 90 percent of our supply volume for 12 ingredients across these categories. This tool offers a glimpse at our work in rural communities across our supply chain, and shares stories about how we partner to help smallholder farmers.
In 2016, we made noteworthy progress in the sustainable sourcing of several commodities. We sourced more than 1 million tons of more sustainable sugar with plans to double that amount in 2017; procured nearly 100 percent of our globally sourced coffee and tea from more sustainable sources; and around 90 percent of our juice supply was on step 3, “Path Selection” of the Supplier Engagement Program, meaning the supplier has selected a path for validation (i.e., external certification or third-party audit) positioning it on a more sustainable pathway for 2020. And, by the end of 2016, more than 50 percent of our key ingredient supply had identified a validation path for compliance with our Supplier Engagement Program, placing it at step 3 or beyond.
When it comes to our top five agricultural spend ingredient crops—cane sugar, beet sugar, corn, oranges and lemons—we have realized both successes and challenges. As of the end of 2016, less than 25 percent of our cane sugar, corn and oranges were validated as more sustainable, while 51-75 percent of our lemons and beet sugar were more sustainable. Challenges we have faced include regulated markets with little sustainability traction, social issues at the farm level, and limited knowledge of sustainability practices by and fragmentation of smallholder farmers. We continue to expect and partner to encourage adoption of sustainable agriculture practices.
Responsible farming practices extend beyond our priority ingredients to dairy. fairlife, the ultra-filtered milk that contains 50 percent more protein, 30 percent more calcium and half the sugar of ordinary milk—without any added protein powders or nutritional supplements—is founded in a “grass to glass” commitment to milk quality, animal care and environmental sustainability. Meet Sue and Mike McCloskey, the dairy pioneers behind fairlife and virtually visit their Fair Oaks Farm operation.
Celebrating and Supporting the People of Agriculture
Behind the agricultural ingredients we all depend on are dedicated, hardworking people. We strive to create economic opportunities for all our supply chain partners, including women and smallholder farmers, and help to protect the land rights of local communities where we operate.
In 2016, through our suppliers, we relied on more than 5 million farmers to deliver our agriculture supply. Women farmers contribute significantly as part of our agricultural supply chain, including thousands who have been economically enabled through Coca-Cola’s 5by20 program.
Contributing to the advancement of our longstanding intention to drive transparency, accountability and sustainability throughout our business and supply chain, in 2016 we published a third-party study from Brazil and worked to finalize third-party studies from Cameroon, Congo, Côte d'Ivoire and Gabon—all top-sourcing sugar countries for us. These studies address human-rights risks related to child labor, forced labor and land rights in our agricultural supply chain.
"We sourced more than 1 million tons of more sustainable sugar with plans to double that in 2017."
Holistically Addressing the Vision of Sustainable Agriculture
When it comes to the rising demand of key commodities, there are many aspects to consider: human and labor rights, women’s empowerment, economic development, water management, and energy and climate impacts. As an example, agriculture represents approximately 70 percent of the world’s water withdrawals, so water must be considered in the agriculture space. Recognizing the interconnectedness of these areas and addressing more sustainable agriculture practices in a holistic way is vital to the success and long-term sustainability of our business.
We also see how agriculture impacts other areas. We measure our sustainable agriculture progress through our climate protection goal, which aims to reduce the carbon footprint of the Coca-Cola “drink in your hand” by 25 percent by 2020. Agriculture accounts for 20-25 percent of climate-related impact of the Coca-Cola “drink in your hand” according to our climate protection goal measurements.