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Sustainable Agriculture

By:  The Coca-Cola Company Jan 22, 2014
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Inside every bottle of Coca-Cola®—indeed, in most of our products—are ingredients that get their start on a farm. We buy many tons of sugar, fruit, corn, tea, coffee and other ingredients every year. Our business depends on the long-term availability of these products.

At the same time, the future of the planet may depend on crops being grown more sustainably. As our longtime partner World Wildlife Fund (WWF) and others note, unsustainable agricultural practices have serious impacts on people and the environment. According to WWF, agriculture uses about 69 percent of the world's fresh water. It is the leading source of pollution in many countries, a primary driver of deforestation and one of the largest producers of greenhouse gas emissions contributing to climate change. Half the planet's topsoil has vanished over the last 150 years due in part to poor farming practices. In our value chain, agriculture accounts for the largest share of water use and the third-largest share of carbon emissions, after packaging and refrigeration. If growers are to provide the food necessary to support the over 9 billion people expected to inhabit the planet by 2050, they must find ways to make agriculture more efficient and aligned with ecological limits—and change must happen soon.

Promoting agricultural sustainability is also a socioeconomic imperative. Agriculture is the world's largest industry, producing $1.3 trillion in food annually and employing over 1 billion people. For three-quarters of the world's extremely poor people, farming is the only viable way to make a living. Farming in the 21st century must protect the rights and livelihoods of agricultural workers and support strong, healthy communities.

For all of these reasons, we have worked with our suppliers for several years to make our supply chain more sustainable. In 2012 and 2013, our work took a major stride forward. Following is a look at our progress.

An Ambitious New Goal for Sustainable Sourcing

Throughout 2012, our system collaborated with WWF and other partners to develop a goal that we believe is both bold and achievable: to sustainably source key agricultural ingredients by 2020. These ingredients include cane sugar, beet sugar, high-fructose starch-based syrup (primarily corn), tea, coffee, palm oil, soy, pulp and paper fiber, oranges, lemons, grapes, apples and mangoes.

We set this new goal for a few reasons. First, sustainable sourcing can ensure continuity in our supply of safe, high-quality raw materials, reducing business risk and delivering sustainable business value for us and for our supply chain partners. Just as important, sustainable sourcing is essential if we are serious about improving our environmental, economic and social impacts, as the footprint of agriculture in our supply chain exceeds that of our system's operations. And, increasingly, customers, consumers, environmental partners and other stakeholders expect us to demonstrate end-to-end accountability for our impact all the way to the farm level.

To guide progress toward our new goal, we have established Sustainable Agriculture Guiding Principles for our suppliers. These principles define what we mean when we refer to "more sustainable sourcing," articulate our expectations, and set criteria for human and workplace rights, environmental stewardship and farm management. We are working with suppliers and with WWF to implement the guidelines throughout our system. In April 2013, we asked suppliers to provide action plans for meeting our sustainability criteria along with baselines for where they currently stand in relation to our goal. We will evaluate their plans and work collaboratively to set a path toward achieving our goal of sustainably sourcing key agricultural ingredients by 2020.

Our new goal is a significant step in the shift toward more sustainable sourcing that we and our suppliers have been making for several years. Some of our suppliers already comply with many, if not all, of our guiding principles. In the coming months, we will identify the best existing sustainability practices among our suppliers and encourage their application across our supply chain. We plan to begin validating suppliers for compliance in 2015 and are working with internal stakeholders, suppliers and partner organizations to establish details on the assurance process.

We expect our guiding principles to ultimately have the greatest impact at the farm level, where we believe some of the greatest strides toward sustainability can be made. But working to change the practices of hundreds of small-scale farmers—such as those in the coffee and sugarcane industries—presents challenges, and the process will take time. We are working with nongovernmental organizations (NGOs) and other partners around the world to develop the best ways of connecting and collaborating with farmers.

As more of our suppliers adopt sustainable practices, we will work with them to find a fair balance in the prices we pay for ingredients. We expect to take a “preference, not premium” approach, rewarding suppliers who comply with our guiding principles sooner by strengthening our business with them. We also want to encourage suppliers to adopt sustainable practices by recognizing their progress whenever we can. For example, in 2013, we presented sugar supplier Raízen with our Company's Supplier Sustainability Award for its work leading the sugar industry toward more Bonsucro Standard–certified sugar.

Listening to the Experts

In February 2013, we convened a small number of globally renowned agriculture and environment experts to discuss the global movement toward sustainable agriculture and our role within it. The group shared positive feedback on our sustainable agriculture strategy to date and also challenged us to do more, both within our supply chain and beyond it, as a leader in our industry. Our new 2020 commitment is, in part, a response to that challenge. 

Slow But Steady Growth in Bonsucro-Certified Sugar

One of our first major steps toward sustainable sourcing was our work with Bonsucro, a collaboration among peer companies, sugarcane producers, WWF and other NGOs, to implement the first global metric standard for more sustainable sugarcane production. The Bonsucro Standard requires evaluation against 20 criteria and 69 indicators on the environmental, social and economic impacts of sugarcane production and is divided into five principles:

  • Obey the law.
  • Respect human rights and labor standards.
  • Manage input, production and processing efficiencies to enhance sustainability.
  • Actively manage biodiversity and ecosystem services.
  • Continuously improve key areas of the business.

Bonsucro launched its Production Standard and certification program in 2010. In 2011, a sugar mill in São Paulo, Brazil, became the first to achieve Bonsucro Certification, and our system was the first buyer of the mill's certified sugar. As of September 2013, 31 sugarcane mills in Brazil and Australia, representing more than 695,000 hectares (approximately 1.7 million acres), or 2.92 percent of the world's surface under sugarcane, have been Bonsucro Certified. The amount of sugar certified under the standard has increased steadily since the first mill was certified in 2011.

As part of our new 2020 commitment, we have drafted plans to achieve Bonsucro standards, or the equivalent, in our sugar supply.

Promoting Sustainable Farming Worldwide

With partners such as WWF and the United Nations Development Programme (UNDP), our system has contributed to more than 40 agriculture sustainability initiatives in 25 countries. Projects are aimed at improving crop yields and livelihoods for farming families while reducing costs and environmental impacts. Most of these projects begin as pilot programs, enabling farmers and suppliers to first determine what works before programs are expanded. Following are summaries of several of these programs.

Improving Mango Yields in Andhra Pradesh

In 2011, Coca-Cola India and Jain Irrigation announced the launch of Project Unnati, which is encouraging mango farmers in the state of Andhra Pradesh to adopt drip irrigation and a method of farming called ultra-high-density plantation practice. Ultra-high-density plantation practice enables mango orchards to reach their full fruit-bearing potential in three to four years rather than the seven to nine years enabled by conventional farming, meaning farmers earn money from the fruit sooner. The practice also makes it possible for farmers to plant as many as 600 trees per acre, dramatically increasing yields. Conventional farming methods allow for about 40 trees per acre.

During the first phase of the project, 200 demonstration farms between one and three acres in size will employ the ultra-high-density plantation technique along with drip irrigation, which uses less water per kilogram of mangoes produced. Later, the demonstration farms will be used to train other farmers. In all, Project Unnati has the potential to double mango yields and improve the livelihoods of more than 50,000 farmers over a five-year period.

Farming for a Healthier Great Barrier Reef

Through The Coca-Cola Foundation, our Company's primary international philanthropic arm, we provide financial support to Project Catalyst, an award-winning, five-year, $26 million partnership among our Company, WWF, Reef Catchments (Mackay Whitsunday Isaac Natural Resource Management), the Australian government, farmers, and other partners, including sugarcane processors, financial institutions, agrochemical companies, trading houses, machinery manufacturers and research and development firms. Project Catalyst promotes farmer-driven innovations that reduce sediment, pesticide and fertilizer runoff into the Great Barrier Reef lagoon and the freshwater catchments that drain into it. The project provides funding and technical expertise to farmers who have developed new practices to promote sustainability but need resources to implement them. Communication is also a key part of Project Catalyst, as newsletters and a website promote innovations, enabling growers to share best practices and lessons learned.

Since its launch in 2009, Project Catalyst has increased from 19 participating sugarcane growers and 4,800 hectares (approximately 11,860 acres) of farmland to 140 growers and more than 198,000 hectares (approximately 490,000 acres). The project has improved the quality of more than 205,500 megaliters (more than 54 billion gallons) of runoff by reducing the amount of nitrogen, phosphorus, herbicide and other pollutants in the runoff, thereby reducing impact on the Great Barrier Reef. Through The Coca-Cola Foundation, we have contributed more than $2.78 million to the project.

With the aspiration of scaling Project Catalyst globally, we and our partners have begun conversations with Brazilian and Colombian sugarcane farmers' associations on soil management and other best practices.

Drought Relief in Guangxi

The Guangxi Sustainable Sugarcane Initiative is part of our partnership with UNDP, the Chinese government and the government of the Guangxi Zhuang Autonomous Region in southern China. Launched in 2010 in the counties of Shangsi and Longzhou and expanded to Jiangzhou and Fusui in 2011, the initiative seeks to provide sugarcane farming communities in drought-stricken Guangxi with improved access to drinking water and more efficient irrigation, along with enhanced land use efficiency through land consolidations. In addition to deployment of drip irrigation, new infrastructure will direct treated wastewater from a sugar mill to the sugarcane field, providing efficient and timely irrigation and better yields.

To date, the initiative has directly benefited about 6,933 sugarcane farmers and indirectly benefited more than 143,000 sugarcane farmers. Other new projects in Guangxi are to be undertaken in late 2013 or early 2014 and are expected to be completed in 2015.

Protecting Freshwater and Small Farms in South Africa

Through Project Khula, The Coca-Cola Foundation is working with WWF and a number of local partners, including Illovo Sugar and others, to help small-scale sugarcane farmers in the KwaZulu-Natal region of South Africa improve their yields and livelihoods while reducing environmental impacts. The Coca-Cola Foundation provided a $150,000 grant to help support the project.

Launched in September 2010 and named for the Zulu word for “growth,” Project Khula leverages the mentorship program of a local growers association to train small-scale farmers in better land and catchment management practices. It aims to support development of more than 3,000 small-scale growers on over 8,400 hectares (approximately 20,756 acres), and to help the local sugar mill, the local government and other local stakeholders organize smaller farms into cooperatives. The cooperatives are expected to help improve productivity and provide opportunities for funding expansion of the program.

Mentors will work with farmers to help maintain and restore riparian areas and increase pesticide use-efficiency. The project also seeks to remove invasive plant species threatening freshwater ecosystems and to develop improved sustainability practices that can be adopted by other South African sugarcane growers.

To date, the project team has assisted in the formation of two planned cooperatives, engaging 97 farmers who farm about 100 hectares (250 acres). Sugarcane plantings on the farms could eventually produce as much as 8,000 metric tons of sugar every two years, providing farmers and their families with a potential collective income of 3 million rand.

Improving Livelihoods for Fruit Farmers in Kenya and Uganda

Our goal is to triple our juice business by 2020. To make sure we can source enough juice to meet that target—and to help improve the livelihoods of small-scale fruit farmers, many of whom are women—we formed Project Nurture, an innovative four-year, $11.5 million partnership launched in 2010 with the Bill & Melinda Gates Foundation and the nonprofit organization TechnoServe. By increasing production of mango and passion fruit suitable for both the fresh fruit and juice markets, Project Nurture is intended to double the incomes of more than 51,000 small-scale mango and passion fruit farmers in Kenya and Uganda by 2014. Our East Africa business unit will invest a total of $4 million in the project, along with $1.5 million in in-kind contributions, including infrastructure investment, technical expertise and fruit purchases.

Through Project Nurture, local farmers will find a market for their fruit. Consumers will be able to support their local farmers through the purchase of beverages. And our business will benefit from procuring locally produced fruit, lowering our costs and increasing supply chain flexibility. The program has established a goal that by 2014 at least 30 percent of participating farmers will be women.

By the end of 2012, nearly 40,000 farmers—14,000 of whom were women—had received training through Project Nurture. More than 36,000 metric tons of fresh fruit from Project Nurture farms were sold. Participating farmers' annual fruit incomes have, on average, already more than doubled through a combination of increased volume sales and improved quality. Project farmers are selling into three market channels: fruit processing, fresh domestic and fresh export. Minute Maid Mango Nectar™, launched in Kenya in 2010, is the first product to use juice sourced from Project Nurture and provides consumers with the opportunity to support local mango farmers.

As part of the project, TechnoServe has worked with select farmers and exporters to ship fresh mangoes and passion fruit to the Middle East. Farmers have been trained in quality specifications, logistics and price negotiation. Project Nurture provides assistance with agronomy and postharvest handling as well. Through the project, two more Kenyan mango varieties, Apple and Tommy, have been developed for use in the manufacture of Minute Maid™ juice and juice drinks. Juice made with the Apple variety is now in production.

Building Hope for Mango Growers in Haiti

Based on our Project Nurture model, the Haiti Hope Project is a five-year, $9.5 million partnership intended to double the incomes of 25,000 Haitian mango farmers. Our partners in the project include the Inter-American Development Bank, through the Multilateral Investment Fund, the U.S. Agency for International Development and TechnoServe. The Clinton Bush Haiti Fund, the Soros Economic Development Fund and others are among the supporters of the project. The project has partnered with a local financial institution, Sogesol, to launch a farmer credit program. Our project team also works closely with Haitian government authorities to align the project's goals with those of the local government.

We began implementing Haiti Hope in September 2010, nine months after Haiti's catastrophic earthquake. Since then, the project team has established relationships with farmer groups representing thousands of mango farmers. More than 16,000 farmers had joined the program by the end of 2012, and nearly half were women. In addition, more than 1,400 farmers have received credit through the project. A detailed training program continues to be implemented covering gender, organizational, technical and commercial issues. More than 2,300 training sessions have been conducted.

The Coca-Cola Company has pledged to invest $3.5 million to the project over its five-year span as part of the overall $9.5 million partnership. As part of our Company's overall contribution, in January 2011, our Odwalla brand launched Haiti Hope Mango Tango™ smoothies and pledged to donate 10 cents for every bottle sold, up to a projected half a million U.S. dollars a year for the duration of the project.

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