To ensure business continuity, capitalizing on opportunities and managing the effects, risks and impacts generated outside the Company’s direct area of control, by incorporating social and environmental variables in the management of the supply chain.
|Improve and expand coverage of the strategic sourcing model.||
Regional negotiations were conducted in Costa Rica, Mexico, the Dominican Republic, Peru, Chile and Colombia for a total of 300 initiatives.
A total of 201 categories were addressed through the methodology of strategic sourcing, achieving savings of COP 6,500 million in Chile, COP 3,000 million in Central America and COP 44,100 million in Colombia, leveraged by the Purchasing Office in China by 8.7%.
|Close gaps in sustainable sourcing.||
Through external consulting, social and environmental risks are identified in the supply chain for Pozuelo and Chocolates Costa Rica.
Training and knowledge transfer was conducted in the negotiation and supplier management teams in six countries.
An agreement was signed with the World Wildlife Fund (WWF) to administer and treat sustainability risks of the principal raw materials.
|Incorporate ethical and third party audits on suppliers.||
Eight work, and six third party audits on suppliers were conducted, which included work, environmental and social components.
|Develop organizational capabilities for farmers.||
3.000 farmers from 34 organizations in five departments in Colombia were trained through a model to strengthen organizational development and information and communication technologies.
|Manage public–private partnerships for the social and business strengthening of suppliers.||
13 public–private alliances were defined with local entities in five municipalities in Colombia.
Grupo Nutresa continues to manage the risks identified for all its purchasing categories, such as breaches in practices in quality, safety and sustainability; the high volatility in the prices of direct supplies; the shortage of supplies generated by climate change; and the migration of farmers to the cities.
To manage them, we have introduced sustainability criteria during the selection and hiring stages for suppliers of goods and services, and we have published and implemented the Supplier Code of Conduct, which is aligned with the 10 Principles of the United Nations Global Compact.
The Company also has policies and manuals that provide a framework of action and direction for its own operations and those of third parties, such as policies on Supplier Selection, Hedging, Human Rights, Genetically Modified Organisms (GMOs) and a Manual for Contractors, among others.
Risks associated with product safety are managed and evaluated by the Purchasing, Quality and Research and Development areas, to ensure compliance with the specifications required for supplies and those of the integrated management systems.
Finally, through Fundación Nutresa we manage strategies to mitigate the migration of young people to cities through actions to develop capabilities and generational change in supply chains, which strengthen them as rural entrepreneurs with better economic opportunities and quality of life.
Grupo Nutresa has been conducting exercises in foresight for sourcing processes, mapping the challenges and identifying trends, to manage future risks to 2030 in a timely manner. In the medium and long term, sourcing processes will be intensive in the use of multi–dimensional information and traceability throughout the supply chain, as well as technologies that support businesses processes.
Achieving efficient non–contact relationships with business partners is a challenge for Grupo Nutresa, which is managed by implementing connectivity services that permit having a closer relationship with suppliers and making processes more efficient throughout the entire chain.
Another challenge is to reduce the environmental and social risks around the principal raw materials used by the businesses. Therefore, together with the World Wildlife Fund (WWF), we are identifying actions in the different purchasing categories and structuring and implementing strategies, mechanisms and measurement systems under a vision of sustainable sourcing.
Moreover, through Fundación Nutresa we continue to power the organizational and community capacities of farmers and we project that we will positively impact 73 associations of small producers by 2020. Likewise, we seek to strengthen the inclusive business model with a methodology of our own development, to give added value to the social and commercial management of the business, through which actions to eradicate poverty, mitigate identified risks and increase the socio–economic status of communities with benefits for the Company and its stakeholders are increased.
The construction of a micro–processing plant for coffee cherries in Ciudad Bolívar, in the Department of Antioquia, is another success story, after a contribution of COP 1,026 million by Industria Colombiana de Café (Colcafé). This project is expected to achieve a savings of 25 million liters of water per year, the proper disposal of the water used in the process to the watersheds in the area, and composting coffee pulp for its subsequent use as an organic fertilizer by coffee growers.
As a success story, noteworthy is the first Exemplary Supplier event, which recognized those suppliers from the different goods and service categories, large companies and SMEs, who stand out for their contribution to achieve Grupo Nutresa’s objectives by implementing sustainability and innovation practices, and for their effort to be better each day in changing environments. A total of 17 suppliers from more than 1,000 suppliers invited to the program were recognized.
Grupo Nutresa was recognized with the Emprender Paz 2015 award, for its social and productive organic cocoa initiative with the Arhuaco communities in the Fundación River Basin, in the Department of Magdalena. Since its inception in 2014, this idea – supported by Compañía Nacional de Chocolates and Fundación Nutresa – has positively impacted 139 families associated with the Kankawarwa cocoa associative project. The communities have participated in a process to transfer knowledge and organizational strengthening, through the action scheme of strategic allies, to ensure continuity of the agribusiness of the Indigenous communities.
For Grupo Nutresa, the management and development of its suppliers are part of its strategic priorities; for this reason, it has defined and identified the risks in sustainability, currently managed through programs to promote sustainable practices, the application of policies and the development of capabilities in different internal and external instances of the Organization.
In this sense, local suppliers that comply with the Code of Conduct, the quality and price requirements, and the sourcing conditions established by the different companies are privileged.
In addition to their qualification to ensure high quality products and services that are in accordance with market requirements, alignment with business partners regarding policies, standards and requirements is part of the responsible sourcing model.
Annually, supplier audits are conducted that include the different quality, environmental, occupational safety and health, commercial security, safety and sustainability management systems, which seek to identify aspects for improvement in the management of production processes, ensure labor and human rights practices, and develop skills through training spaces. Support and advice on management and compliance of requirements associated with the plants and their products are provided; this accompaniment ensures not only legal obligations but also standards for product quality and safety.
During 2015, 750 suppliers of raw materials, packaging materials and service providers were trained on issues such as sustainable development, occupational safety and health, legal updating, contractor manuals, management systems, money laundering and the financing of terrorism, human management, supplier portals and the self development. A total of 9,510 hours were invested and 4,607 people participated, which generated a positive impact on the Company’s social capital by creating skills in suppliers.
Altogether, 267 suppliers in the categories of direct and indirect materials were assessed within the supplier evaluation and monitoring programs, which has generated more than 1,076 improvement actions that have contributed to closing gaps and increasing skills in environmental, logistics, quality and safety aspects in suppliers and their production processes.
This multi–sector initiative is designed for companies to optimize their operations under a common language and through the use of collaborative tools and platforms. Together with the companies Logyca and GS1 in Colombia, Grupo Nutresa participates in this program and has made an impact on 27 suppliers in the promotion and implementation of international marking standards that ensure the traceability and efficiencies throughout the chain. The Grupo Nutresa companies that actively participate in the program are Servicios Nutresa, Compañía Nacional de Chocolates, Pastas Doria, Meals de Colombia, Colcafé, Compañía de Galletas Noel, Alimentos Cárnicos and Zenú.
In association with Ruta N, the Center for Innovation and Business in Medellín, suppliers of goods and services were invited to participate in the summons for innovation managers, in the framework of the signing of the Great Pact for Innovation, aimed at developing competencies in companies to implement an innovation management system to enable them to increase long–term competitiveness and strengthen their intellectual capital.
During 2015 Compañía de Galletas Noel summoned more than 39 suppliers to the XXIV Annual Value Network Encounter, where clients, suppliers, unions and other groups related to the value chain of the business shared the challenges and trends in sourcing, the economic and political context, and best practices in sustainability and leadership.
The external assembly and/or alternative forms of product negotiation with third parties was updated and improved, to ensure and standardize compliance with quality, commercial and socio–environmental requirements by suppliers and to manage the risks present in the chain associated with this mode of supply.
Seven new connectivity services were activated and improvements were made in five services on the supplier portal www.gruponutresaenlinea.com. The improvements are related to updating data; online communication of purchase orders; inventories; self–management in communications to access the portal; request for and assignment of transport service for finished products with companies providing this service, and eLearning modules, among others. All of the above are aimed at improving the collaborative management of operations and their efficiency, interaction with suppliers of goods and services in favor of transparency, business continuity and compliance of the requirements associated with sustainability, money laundering and the financing of terrorism.
Meanwhile, the Biscuit Business began eBilling processes with transport suppliers; for 2016, this process will be extended to raw material and packaging material suppliers, to improve the logistics operation and reduce the environmental impacts.
Another part of Grupo Nutresa’s responsible sourcing model is to ensure the decrease of environmental and social impacts in the different categories of purchases of goods and services.
Grupo Nutresa examines its suppliers based on the social, environmental and economic risks for each of the categories of goods and services, to focus on and develop activities that positively impact its supply chain. The analysis was performed applying the methodology of Grupo Nutresa’s holistic risk management process.
In 2015 risks were identified to which the categories of purchases of materials and services for the businesses in Costa Rica were exposed, which extends and complements the exercise conducted in Colombia in 2014.
Environmental: Impact on flora and fauna, use of hazardous substances, increased waste generation, increased consumption of natural resources, climate variability, negative reaction of stakeholders regarding the use of GMOs, increased air emissions, animal abuse.Labor Practices: Unfair wages, non–conducive work environment. Human Rights: Child labor, violation of the right to freedom of association and collective bargaining. Impacts on Society: Impacts on the health of the final consumer, impact on neighboring communities.
Environmental: Impact on flora and fauna, use of hazardous substances, increased waste generation, increased consumption of natural resources, climate variability, negative reaction of stakeholders as to the use of GMOs, increased air emissions, animal abuse. Labor Practices: Application of legal rules for hiring staff, non–conducive work environment. Human Rights: Violation of the right to freedom of association and collective bargaining. Impacts on Society: Impacts on the health of the final consumer.
In addition to regular audits conducted on site with suppliers, and in which sustainability variables have been included, during 2015 eight labor audits and six ethical third party audits on suppliers were conducted under Intertek’s Workplace Conditions Assessment (WCA). Its goal is to have broader knowledge on the compliance of sustainability criteria for suppliers and the categories classified as high environmental or social risk.
Impacts related to transport, packaging reduction and optimizing are developed in the Chapters “Responsible Sales” and “Post–Consumption Packaging.”
Grupo Nutresa seeks to manage and develop agricultural chains to ensure the growth of suppliers and communities in the area of influence of the productive areas, while managing the risks associated with sustainability.
With the commercialization of products certified under the Fairtrade label, Colcafé continues to generate benefits to coffee growing communities that produce green coffee certified under this label, which gives consumers certainty about the ethical values of the product and supports the sustainable development of the producer organizations.
Through alliances and negotiations with international clients, from the inception of the program the Business has transferred resources in excess of COP 33,000 million to communities. The social premium transferred is mainly used in initiatives aimed at productivity and crop quality, environmental projects, social services and education and other projects covered by this certification.
In the last five years, not only has the value of the premiums transferred increased, but also the number of coffee growers benefitted, located in eight departments in Colombia.
The Chocolate Business works for the sustainability of the cocoa supply chain, investing more than COP 4,050 million in promoting cocoa culture in Colombia, strengthening the capacities of farmers, researching and working with local authorities, banks, research centers, universities and government institutions, to benefit cocoa producers.
Purchases made from more than 1,350 suppliers, including farmers, associations, corporations, cooperatives and individuals, corresponded to a total of 22,599 tons of cocoa in 2015 for COP 162,600 million.
Compañía Nacional de Chocolates continues to promote special certifications in markets and online, and purchased 105 tons of cocoa with the Fairtrade certification, which generated quality bonuses of COP 52 million for cocoa farmers, thus contributing to the growth of their financial capital. Additionally, it purchased 73.4 tons of organic cocoa, paying a premium of COP 52.6 million and acquired 79.4 tons of origin cocoa, paying a special premium of COP 42.2 million.
The Principal Projects during 2015 were:
Grupo Nutresa’s swine production systems are designed to ensure animal welfare and comfort. Therefore, of the 86 farms that supply the Cold Cut Business, 90.5% are certified in best livestock and safety practices. Also, to give continuity to the implementation of best environmental practices, a shop was conditioned and two collection centers for solid waste were built to impact the environmental management on farms with an investment of COP 28.8 million. Grupo Nutresa did not receive any sanctions or fines for noncompliance of laws related to animal transport, management and processing practices. G4-FP13
*100% pigs, regardless of their breed, receive the same treatment on the farms.
Policies and Practices Related to Physical Alterations and the Use of Anesthesia G4-FP10
Animals raised and or processed per housingtype G4-FP11
Some 95.7% is pens and 4.3% is cages. Pens are differentiated and have homogenized populations by age and size to match development conditions, protect the health of the pigs and reduce stress.
During 2015 five knowledge transfer sessions were held with Durum Wheat suppliers and brokers in Chile, with the support of the Agricultural Research Institute (Instituto de Investigaciones Agropecuarias, INIA), in which some 180 suppliers participated. In these sessions topics, such as cereal plant pathology, disease prevention, crop safety, application of fungicides, commitments to sustainability, improving wheat and strategic challenges, among others, were discussed. Also, direct accompaniments with wheat suppliers were carried out in crop areas.
The production of healthy, high quality food is not only consolidated in the production plants of the businesses; it originates from the purchase of agricultural goods that, in addition to meeting appropriate standards of quality required by the Company, are grown by farmers who are part of processes of transformation and development of organizational, personal and family skills.
Grupo Nutresa participates in sustainable productive projects that contribute to the social development of communities, promote dignified standards of living and develop socio–entrepreneurial skills in farmer associations, building social and financial capital for them. Empowering and qualifying farmers has strengthened the social fabric of communities, increased income and generated more opportunities for growth and sustainability in the field.
During 2015, 3,000 farmers participated in training processes in democratic and participatory management; financial management; managerial, administrative and management capacity; human rights; and healthy habits.
Noteworthy is the work by Ascompartir and Asofrupa, associations that gather 41 blackberry producing families in the Department of Quindío, where they were strengthened technically and organizationally, overcoming adverse weather conditions.
The strategic sourcing initiative focuses on the negotiation process through the redesign or new sources of supply to enhance the competitiveness of all the categories of materials and services. In 2015, the project was emphatically addressed in Chile and Central America, where cost reductions were achieved through 78 savings initiatives and benefits in profitability of COP 9,600 million.
Annually, Grupo Nutresa purchases COP 3.99 trillion in goods, with a participation primarily represented by commodities and raw materials.
Purchases certified under international standards help reduce the impact on sustainability in the supply chain thanks to the detailed requirements of these rules, aimed at specific products and places where they are produced.
During 2015, we dealt with 39,747 cases from suppliers through the Customer Service Center, of which 6,897 were associated with support in logistics, financial and quality services in the Online Business Portal, facilitating the operation and efficiency in activities in supplier sourcing and those of the Grupo Nutresa companies.