How Starbucks and Green Mountain serve up shared value
A shocking dichotomy exists in our food system. The more than 70 percent of the global population that is food insecure are the very people we rely on to produce about 70 percent (PDF) of the world's food supply. They are typically small farmers living in rural areas across the globe.
Today is World Food Day, the opportunity to highlight the call for action to end hunger for the 1 billion currently hungry (PDF) and to fulfill our future population's food needs. This year's theme of family farming acknowledges the crucial role these farms play. Building the capacity of smallholder producers is necessary to empower them to move out of poverty and to eradicate hunger.
Leading food and beverage companies have taken the challenge. They are addressing hunger and poverty in their suppliers' communities while also delivering value for their companies.
Coffee leads the way
Starbucks is building the capacity of smallholder coffee producers through loan programs, technology transfer and market access. The company plans to loan $20 million to underserved farmers by 2015. Part of the funding provides smallholders with financing for market access and technical assistance through the Fairtrade Access Fund. The company also established a network of six Farmer Support Centers in key coffee-growing regions. These centers provide expert assistance directly to farmers, including best management practices and improved coffee varietals. Starbucks' commitment to purchase only ethically sourced coffee by 2015 underpin these and other initiatives by providing a market for smallholder producers.
Viewing hunger in its producer communities as a supply chain threat, Keurig Green Mountain is focusing on providing tools and training to reduce hunger and poverty in the communities where it sources coffee. Projects have included: supporting coffee farmers in growing staple crops and nutritious fruits and vegetables at home or local schools; helping build metal silos for farmers to store and protect grains from humidity and pests and provide year-round access to food; ensuring diverse sources of income through activities such as producing eggs or beekeeping to help stabilize income throughout the year; providing training and market access for these additional crops.
Keurig undertook this range of activities after reaching out directly to those affected in order to understand what would help them the most. These efforts have reduced hunger in the target communities, enabling them to be productive supply-chain partners.
Shared value in the supply chain
Programs that build the viability and capability of smallholder producers are widespread across the food sector with efforts underway at Walmart, Unilever and recent commitments from Kellogg's and others. Such investment is critical to the long-term resilience of the food system and to ensuring food security for the world's growing population.
Companies should use World Food Day and the examples of these leaders as an opportunity to evaluate how they could strengthen their producer partners while improving the long-term food security of the communities they touch.
This global event and these successful approaches also should inspire companies to understand and address other social needs (PDF) in their supply chain and markets to deliver critical value. Those companies that can address unmet societal needs such as a lack of food, water, health care, education or employment in a way that also benefits their business will have helped evolve our common understanding of the corporation of the future. As businesses reach beyond their four walls and work collaboratively with their supply-chain partners and communities, we can expect exciting innovations and creative collaborations with far-reaching results.
Take a look at our blog on hunger and corporate responsibility, The Hunger Games Are Not Sponsored by Responsible Corporations, and last year's World Food Day blog post, A Sliver Lining with Sustainable Sourcing on World Food Day. coffeefarmer_DFID_wikimedia