Supply Chain
5 Top Tips for Future-Proofing Your Supply Chain

Taylors of Harrogate prides itself on quality teas and coffees, but beyond the brew the company has also established a reputation as an industry leader in ethical trading.

For several years, the UK-based company has been going the extra mile to work with and support its growers and supplier in the troubled tea and coffee sectors. Earlier this year, the business was awarded a prestigious Queen’s Award for Sustainable Development in recognition of its efforts.

I asked the company’s Head of Sustainable Development, Simon Hotchkin, for his top tips on what other companies can do to ensure a secure and consistent supply of quality product in the face of environmental, economic and social uncertainty:

1. Have a clear, united vision

Although Taylors has long been committed to trading fairly, it was not until 2012 when the company outlined its vision in a future-proofed sourcing strategy that it truly transformed the way it worked with its suppliers and growers.

By pledging to “guarantee the long-term supply of quality tea and coffee in a safe, ethical and sustainable way, enabled by relationships,” the company created an inextricable link between quality, sustainability, business continuity and valued relationships that would underpin all future operations.

“It leaves no doubt about the direction and values of the company, and that we would not achieve any one element without the other,” Hotchkin said. “Taylors’ Sourcing Approach requires an integrated and collaborative effort from a whole range of business functions – the vision became our shared responsibility.”

2. Develop mutually beneficial relationships with stakeholders for long-term business success

Understanding each other’s needs must lie at the heart of an organisation’s approach to sourcing, and is why long-term shared business plans are such a vital part of building strong reciprocal relationships.

“Rather than having a traditional buyer-led relationship, Taylors sees all of its key suppliers as business partners, from the smallest farmers to the largest exporters,” Hotchkin said. “By having three- or even five-year agreements in place which guarantee producers a premium buyer and price transparency for their product, they can implement business plans with a sense of security, and are more likely to gain access to additional finance to help them grow their businesses and invest in their communities.

“By the same token, Taylors can invest time and resources – very often in the form of face-to-face contact - to help our suppliers understand and meet the exact quality specifications we require, thus ensuring secure supply in an increasingly competitive marketplace.”

Hotchkin added that developing strong and valued relationships breeds loyalty and trust.

“You become the buyer of choice,” he said. “And in an increasingly volatile marketplace like ours, we believe it’s worth the effort in doing it properly.”

3. Use carbon finance creatively to support resilience in your suppliers’ heartlands

Companies that use carbon finance to offset emissions and meet carbon targets can potentially also generate huge additional benefits for their business, Hotchkin said.

Taylors has committed to becoming carbon neutral by 2020, and as Hotchkin says, the company could achieve this “more or less overnight” by buying enough credits from reforestation projects across the world. But the company chose to go further, working with Natural Capital Partners (which commissioned this article) – which specialises in working with businesses to meet their environmental goals through external projects and market-based solutions – to develop a one million-tree Community Reforestation Programme on and around Mt Kenya, which is one of the world’s highest-quality tea-producing regions.

Under the scheme, participating farmers are encouraged to plant indigenous tree species that provide multiple benefits, such as cash crops, fodder for cattle, shade and soil nutrients. They are taught how to maximise land use to increase productivity, enhance biodiversity and adapt to the impacts of climate change. A second phase will see the company address similar issues in its coffee business.

“Companies need to look beyond getting the carbon neutral badge, and start thinking about how the right project in the right area could provide multiple benefits for their business and suppliers,” Hotchkin asserts.

“Because of the monitoring, reporting and verification which is fundamental to all carbon finance projects, they deliver a very effective mechanism for companies to ensure they are delivering a positive impact on communities,” said Joe Barclay, Managing Director of Global Markets at Natural Capital Partners.

4. Collaboration is key for scaling up impact

It’s a good point often made that no single company will ever enable significant, system-level change by acting alone.

We have already seen how working closely with stakeholders is fundamental to Taylors’ business practice and success. However, Hotchkin believes that it is the company’s work in co-creating and supporting coalitions with stakeholders from across the industry, including competitors, that will have the greatest impact over time.

“If we’re going to meet our climate objectives, then for the immediate future at least I believe it’s responsible business that should take a lead and not wait for a directive from policy and governments,” he says. “Collaboration between all the major stakeholders of any industry serious about addressing common challenges like climate change and resource shortages is therefore vital.”

Sarah Roberts, Executive Director at the Ethical Tea Partnership, says as a comparatively small player in a huge industry, Taylors’ commitment to sustainability and ethical trade enabled the company to “punch above its weight” by leveraging support for initiatives from key stakeholders.

“Combining its farsighted vision with its naturally collaborative nature is what makes the company such a powerful player and helps it to stand out,” she said.

5. Make sustainable development a commercial imperative

Hotchkin says the primary driver for Taylors’ commitment to sustainability is that it makes sound business sense.

“Taylors is a family-owned business with a very strong set of values, but we understand that failing to look after the commercial interests of the company means all our good intentions will come to nothing,” he says.

“The work we are doing with our supply chain is not about philanthropy or CSR, it is about sustainability being a commercial imperative for the future success of the business.

“Companies that fail to make this connection, and fast, are putting their businesses at even greater risk. As if climate action alone wasn’t compelling enough!”