The changes COVID-19 has introduced into the dynamics of the Organization brought about the need to establish alternative mechanisms to ensure that people were protected and work plans were fulfilled. The Organization has also defined and incorporated new risks, standards, work styles and engagement with suppliers. In the case of SMEs, the Company made the corresponding payments in advance in some periods during the pandemic with the purpose of improving their cash flow.
In accordance with the guidelines in the Responsible sourcing model, the Organization started an identification process of present and emerging risks in the sourcing chain of some of its operations and opportunities to treat and manage them. In addition, the Company has worked on packaging and circular economy strategies.
- Gaps in terms of technology and productivity.
- Child labor.
- Violations against Human Rights.
- Ability to lead and manage the challenges identified in the farmer supplier communities.
- Developing technical and socio-entrepreneurial capabilities.
- Supporting the execution of audits.
- Creating opportunities to ensure a broader access to digital tools.
Future outlook and goals for 2030
- Developing circular solutions and strengthening the responsible sourcing of commodities.
- Systematizing performance, creating indicators and integrating information from different locations in a standardized way for the measurement model, risk analysis and supplier audits.
- Continue studying the sourcing model through the “Clic” project in order to boost its productivity and its engagement with suppliers.
- Maintaining the identification of inclusion-driven suppliers and providing them with support.
- Continue supporting projects through Fundación Nutresa with the aim of developing the socio-entrepreneurial capabilities of farmers associations in line with the corporate strategies and goals.
Success stories and acknowledgments [GRI 103-3]
- Alliance for the development of the cocoa-growing sector in Colombia
Fundación Nutresa and the Chocolates Business, in an alliance with the United States Agency for International Development (USAID), started the implementation of the “Riqueza Natural” (Natural wealth) program, which benefited 115 cocoa growers in the Colombian state of Cesar by developing their capabilities with the aim of increasing and improving their productivity and cocoa quality, and preserving the tropical dry forest.
- Integrated livestock farming management
The Company uses the guidebook titled Strategic recommendations for environmental sustainability in the primary production of beef. To conduct a diagnosis of the productive activity of twenty-nine suppliers in the integrated livestock farming model of the Cold Cuts Business. Such diagnosis has been useful to address opportunities related to good practices of environmental sustainability; for instance, silvopasture systems, the use of different forage species, erosion control and management of vegetation cover on soils, among other, which contribute to mitigating greenhouse gas emissions (GHG).
- Participation in the “Fábricas de Productividad” (Productivity Factories) program organized by the Colombian Ministry of Commerce, Industry and Tourism
This initiative aims to generate capabilities and increase corporate productivity. Ten of the suppliers in the categories raw materials, packaging, indirect purchases and services improved their productivity by 42% on average regarding opportunities for improvement identified in quality management, work productivity, commercial management and digital transformation.
Responsible Sourcing Model
Development of capabilities among Grupo Nutresa’s suppliers with the purpose of ensuring the Organization’s continuity, capitalizing opportunities and managing the risks that are not directly controlled by the Company through the incorporation of economic, social and environmental variables based on four management approaches.
Alignment, qualification and standard compliance
Open Space Technology: collaborative learning about sustainability
The third edition of this open learning space, which was held via digital means, included 193 supplier companies from five countries. Ten topics related to environmental sustainability and circular economy were discussed.
Supplier performance management
Systematization and integration of the risk and performance analysis of the suppliers in all Businesses. This will enable the integration of the qualitative and quantitative performance of suppliers of direct and direct materials in terms of quality and sustainability. In addition, Business teams will be able to use it to identify opportunities for improvement and acknowledgment programs.
Supplier assessment and auditing
- 362 supplier audits conducted, 27 of which were sustainability audits.
- 335 integrated management system audits performed. 87% of the suppliers screened ranked at favorable levels.
- Twenty-four commercial security system audits of key suppliers from the logistic chain were conducted at the companies that have implemented the requirements to receive the Authorized Economic Operators (AEOs) and Business Anti-Smuggling Coalition (BASC) certifications.
The Organization ensures the evaluation for the Pareto in the expenditure of critical suppliers based on the ten principles of the United Nations Global Compact or by means of other evaluation mechanisms, which include self-evaluations, on-site audits or audits performed by a third party. The Company’s goal is to audit critical suppliers to cover at least 80% of the expenditure of such suppliers with a duration of three years or less.
- Promotion of an inclusive and diverse leadership style based on social awareness. The following are the numbers of people who participated in the Organization training activities [GRI 412-2]:
- 1.686 attendees to the discussion conference titled “Cómo vivir y expresar el valor de la integridad” (How to live and express the value of integrity).
- 3.313 employees attended the discussion panel titled “Transformando miradas – Conversaciones que Fortalecen la Equidad de Género” (Transforming perspectives – Conversations that strengthen the gender equality). 14.188 employees received training related to Human Rights.
- 736 employees participated in the second discussion panel about Women Leadership.
- 71 members of the Cohabitation Committee from 12 Grupo Nutresa companies received training related to mediation processes.
Sustainability-related risks assessed
- Environmental: alterations in the water resources, the soil and the atmosphere; dependence on non-renewable resources; inadequate waste management; noncompliance with environmental regulations; loss of biodiversity; inadequate use and management of hazardous substances; and climate variability at significant and intolerable levels.
- Social: inadequate work environment, product contamination, child labor, violation of the freedom of association right and of the collective bargaining right at significant and intolerable levels.
Suppliers deemed critical in terms of sustainability (see critical categories in terms of sustainability)
Negative environmental and social impacts in the supply chain and actions taken [GRI 308-2] [GRI 414-2]
Sourcing policy compliance verification mechanisms
Out of the 80% of the amount of purchases from direct suppliers of goods, Grupo Nutresa bought 58% from suppliers that, using some mechanism, have been evaluated or adhered to the Organization’s purchase guidelines.
Environmental and social impact reduction in the sourcing chain
Management of sustainability-related risks regarding commodities
A study of the milk sourcing chain was conducted within the framework of the strategy for the sustainable sourcing of commodities. It was carried out jointly with the World Wildlife Fund (WWF), said study resulted in strategic recommendations to tackle the challenges of this kind of production and the creation of a new Handbook of Good Milk Production Practices. It also includes standards for the conservation of the soil, water, biodiversity and other natural resources.
Identification of sustainability risks
Through external consultants, Grupo Nutresa started a process to identify and assess sustainability risks in the purchase categories related to goods and services in Peru in order to determine the categories and goods that presented the highest risk or impact on the environmental and social sustainability of the sourcing chains in this country.
Supplier acknowledgment program
For the sixth consecutive year, Nutresa Exemplary Supplier recognized the work of the value chain and highlighted the companies that have contributed to the achievement of the Organization’s strategic sustainability goals. In 2020, Mexico was added to this program.
- 214 participants.
- 22 accolades awarded in seven categories of goods and services and four special categories.
- A total of 17 supplier companies from six countries were awarded acknowledgments.
Packaging Material Eco-Design Manual
Tool that allows unifying efforts and defining joint action plans in order to optimize the use of resources and implement circular economy solutions for packaging. The manual was distributed to 57 suppliers in six categories in Chile, Colombia and Costa Rica.
Sustainable agricultural and livestock development
The commercialization of differentiated, Fairtrade certified and Organic products, as well as programs such as the Farallones coffee processing central plant, continue to generate value in the sourcing chain, especially for the beneficiary communities. Thanks to alliances and negotiations with international customers, the Coffee Business has transferred resources amounting to more than COP 77.986 million since the start of the program.
The social premium transferred is mainly used in initiatives focused on plantation productivity and quality, environmental projects, social services, education, biosecurity protocols to deal with the contingency caused by COVID-19, and other projects covered by this certification. The following was the behavior of the premiums transferred over the past years:
Continuity was given to the program for the sustainable development of durum wheat in Chile in alliance with the National Agricultural and Livestock Research Institute (abbreviated INIA in Spanish), an initiative that has been implemented since 1988. The activities include researching and developing new durum wheat varieties, building demonstration farms in different wheat production areas, and dissemination. In 2020, Grupo Nutresa provided support to eight producers so that they developed technical farming capabilities and organized virtual talks about good practices related to the production of durum wheat and the commitment to Human Rights. Finally, 100% of Grupo Nutresa’s suppliers work under contract farming agreements and adhere to the Code of Conduct for Suppliers for the 2020-2021 purchase period.
- Strategy for the dissemination of technical knowledge by means of online channels and 46 interactions: training sessions, talks, conferences and videoclips, among other.
- 6.266 people from Colombia and 17 countries around the world participated in the activities, reaching a total of 66.863 views of the material. This initiative is part of the commitment of the Organization to providing technical and commercial support to cocoa producers, promoting sustainable production systems and maintaining an active relationship with producers.
- A certifiable course was offered to 30 leading farmers with the aim of tackling topics that are important for the comprehensive management of cocoa plantations.
- Leading practices were shared in the cocoa-growing sector through the dissemination of written, visual and audio contents by using digital platforms; 2.113.442 text messages were sent to 14.779 actors from the value chain.
- The Chocolates Business provided support to 127 productive alliances that foster the sustainable rural development of the coca production sector in Colombia, benefiting 17.586 families with 27.833 hectares of cocoa in 23 Colombian states.
- The Company’s plant nurseries cultivated and distributed 3.560.674 vegetable material units earmarked for new crops, renovation and rehabilitation of cocoa plantations.
- Purchase of 32.459 tons of dry cocoa beans, 39,7% of which were bought from farmers associations and cooperative organizations in Colombia.
- An agreement was signed with Développement International Desjardins Inc (DID) to strengthen the economic and social empowerment of women and young people in rural areas in Colombia.
Grupo Nutresa published its commitment to animal well-being, which establishes guidelines and goals to ensure optimal conditions in the Company’s own processes as well as those of its allies and suppliers for the promotion of productivity with sustainability criteria.
Implementation of a methodology for intradermal needleless vaccination called IDAL for soon-to-be-weaned piglets in its farms. This methodology improves the well-being of the animals because it reduces the pain of conventional injections and enables a fast and efficient absorption of the product, thus increasing the protection margin and reducing the risk of abscess formation in the area of application. Over the period, said methodology was used in 8% of the pigs while its efficiency was being compared to other similar products in the sector.
Implementation of a new production model for the sourcing process using a pilot feedlot (bovines in housing infrastructure or confined). The project aims at increasing the production significantly, fostering new sources of formal employment and incorporating the best environmental practices related to animal welfare. Likewise, the Company has a human team to guarantee zootechnical, animal well-being and animal health conditions, Grupo Nutresa’s livestock farms and those of third parties.
- Nutrition: diet formulated by expert professionals who follow up on and control the quantity and quality of water and foods products.
- Animal health: implementation of good manufacturing practices and biosecurity programs that include health and vaccination plans.
- Absence of physical and thermal discomfort: facilities and equipment that provide comfort in the pens and pastures, as well as during transportation. For the latter, the Company uses specialized trucks with ventilation, dividers and customized spaces depending on the type of animal. Such trucks reduce stress during the transport process and ensure more comfort for the animals.
- Absence of fear, pain and stress: immunological castration.
- Slaughter: once the animals arrive at the processing plant, they are taken to pens to rest and drink fresh water. Before being slaughtered, the animals are stunned so that they do not suffer any pain.
Development of capabilities among community organizations
Due to mandatory lockdowns that were imposed in all the countries in the strategic region, Grupo Nutresa, through Fundación Nutresa, conducted a diagnosis for identifying existing gaps and opportunities regarding the access to new technologies in both rural and urban communities. The results allowed implementing training strategies through digital media, which enabled supporting the continuation of processes that had been started in person with more than 600 low-income suppliers. The following are some of the achievements:
- 253 training sessions regarding eight main components: social-organizational, economic-corporate, quality in the production chain, environmental-natural resources, social, healthy lifestyles and occupational health.
- Maintaining the training processes and the commercial relationship with 28 farmers associations that received income for selling their goods.
- Boosting the local economy of the “Marañoneros de Córdoba” Association (Asomarañón), which equipped a production plant for processing the pseudofruit of cashew into jam with the support of the Organization and the Colombian National Learning Service (SENA), planning a future commercialization of this product through the Evok brand.
- More than 6.755 tons of supplies (valued at COP 20.071 million) delivered by the Organization to farmers associations that produce cashew, milk, honey, cocoa and coffee in the Colombian states of Antioquia, Bolívar, Boyacá, Córdoba, Cundinamarca, Magdalena, Cesar, Santander, Sucre and Tolima, as well as durum wheat in Chile.
Productivity and competitiveness in the value chain
By means of the strategic sourcing methodology, Grupo Nutresa structure and execute initiatives that improve its negotiation competitiveness, as well as its sourcing of goods and services.
- Grupo Nutresa’s total purchases rose to COP 6,4 trillion.
- Commercial relations with 15.786 suppliers.
- COP 94.817 billion in savings achieved through 380 negotiation initiatives.
- 39 individuals from the Chocolates Business and La Recetta received training related to the strategic sourcing methodology.