Kraft Study Proves Importance of Supply Chains In Sustainability Efforts

Kraft Foods, the second largest food producer in the world, recently announced the results of a survey measuring its climate impacts, land and water use. The study was intended to provide a more thorough picture of the company’s complete environmental footprint, going beyond direct use and emissions to look at the entire supply chain. The project was conducted in partnership with Quantis, Inc., a company that specializes in Life Cycle Assessment and environmental footprinting. The World Wildlife Fund (WWF) analyzed the results as part of its market transformation initiative, which is focused on transforming commodities markets and creating large-scale environmental change by proving that more sustainable products can be produced at an affordable cost.

Key statistics resulting from the study demonstrate the significance of Kraft's upstream and downstream supply chains on it's carbon and water emissions:

• More than 90 percent of the carbon footprint is outside its plants and offices, and nearly 60 percent is from farm commodities.


• About 12 percent of the carbon footprint is from transportation and distribution of products from stores to consumers' homes.


• About 5 percent of the carbon footprint is from consumers, mostly in food preparation.


• More than 80 percent of the land impact is from agriculture.  In comparison, the impact from manufacturing facilities and offices is negligible.


• About 70 percent of the water footprint is from growing raw materials (including agricultural commodities used to make food products), while only 10 percent comes from manufacturing facilities/offices.


• Another 10 percent comes from consumer use, mostly from food preparation.

The study confirms that Kraft’s biggest environmental liability and potential leverage point for improvement is it’s agricultural suppliers – the farms that produce ingredients for the companies’ products. According to its Better World website, the company has already been working to identify ways to reduce its impacts by looking for opportunities up and down the supply chain. Since 2005, Kraft has made some notable progress on it's sustainability targets:

• Energy use is down 16 percent


• CO2 emissions are down 18 percent


• Incoming water is down 30 percent


• Net waste is down 42 percent


• Packaging is down 100,000 metric tons (200 million lbs)


• 96 million km (60 million road miles) have been removed from its transportation/distribution network

The new information from the Quantis study validates Kraft's focus on sustainable agriculture and its efforts to improve crop yields, farm environmental conditions, and the lives of farm workers is in fact the right approach. Dave McLaughlin, VP of Agriculture at WWF, says that "in order to make meaningful change and conserve nature's valuable resources, companies need to work with their suppliers to reduce the impact of producing raw materials.”

Kraft deserves a pat on the back for it's transparency in sharing the detailed footprint data from this study. Its website does include an interactive map showing the geographic locations of some of its sustainability initiatives. However, this map doesn't include any specifics on the sustainable agricultural practices that are being implemented by its suppliers. WWF contends that supply chain work requires the formation of long term partnerships based on the identification of shared objectives. It would be nice to hear more about how Kraft is using this approach to address its supply chain impacts and make large-scale sustainability improvements to its operations.

***

Kara Scharwath is a corporate social responsibility professional, marketing consultant and Sustainable Management MBA Candidate. She is currently working as a Graduate Associate in Corporate Citizenship at the Walt Disney Company while pursuing her degree at Presidio Graduate School. Follow her on Twitter @karameredith.