Supply Chain
Farmers Are the Linchpin to Food Companies' Sustainable Sourcing Goals

Tyson Foods, the largest meat company in the U.S., is starting to step up to the plate on sustainability and respond to pressure from investors and consumers to tackle water risks in its supply chain.

Recently, the company made a commitment to improve the water, soil and fertilizer practices in its far-flung feed grain supply chain — impacting more than two million acres of corn production by 2020, or about half of its corn supply chain. The measures have strong potential to both improve water quality and reduce greenhouse gas emissions.

Tyson’s move sends a strong signal to the rest of the meat sector that driving down the massive environmental impacts of growing animal feed is a smart business strategy.

Despite this positive news, Tyson has not yet made its implementation plan public — and the devil is always in the details. Moreover, Tyson has a steep hill to climb. The company got just 11 out of 100 points in Ceres’ 2017 Feeding Ourselves Thirsty ranking of how food sector companies are tackling water challenges across their value chain. The Environmental Protection Agency, meanwhile, ranked Tyson as the second-highest polluter in its 2016 Toxic Release Inventory.

Among many critical steps for Tyson to consider when setting and implementing sustainable sourcing commitments, farmer engagement is key. Setting a goal that does not have grower support will not succeed.

Any company with sustainable sourcing goals must find creative ways to support and incentivize farmers to improve practices, share data and reduce their impact on watersheds. Here are four key ways for companies to do that:

Data is critical to understanding agricultural water impacts and how to reduce them. However, supplier survey fatigue is real. Growers receive dozens of requests from buyers to fill out lengthy surveys that vary dramatically, requiring additional time and resources. Some 57 percent of companies benchmarked by Ceres are asking for water-related data from growers, and in most cases growers are asked to provide data without knowing how it will be used, who owns it, or whether or not they will have the ability to gain insight from that data in the future. Ensuring that data collection is not a one-way street and that there is trust and value for the grower in sharing data are key.

Campbell Soup’s approach to data collection puts the emphasis on transparency. Instead of a one-way siphoning up of data, Campbell anonymizes and aggregates the information and shares it back with growers so they can track their own improvement relative to other farmers and learn where there’s room for change. The data help Campbell make the business case to growers for adopting more sustainable soil health and water management practices.

Provide education or assistance for growers

The food sector is doing more to engage growers, with 71 percent of companies we benchmarked providing some form of educational support to growers on sustainable agricultural practices, double the number from 2015. Many companies are hiring agronomists or leveraging in-house agronomists to conduct trainings for farmers. Others are collaborating with customers that source directly from growers.

Others are forming partnerships with agricultural retailers that are well-positioned to advise farmers on their practices. For instance, Land O’Lakes SUSTAIN — a business unit of farmer-owned cooperative Land O’Lakes — has sustainable agriculture experts working with thousands of farmers across millions of acres of farmland in partnership with companies, including Campbell and Walmart, to help advance their company-level sustainability goals.

Provide financial incentives

Just 26 percent of companies benchmarked by Ceres provide some form of financial incentives to growers to improve conservation practices. That’s twice as many as in 2015, but still low. While many companies think of financial incentives as providing premiums, there are a number of innovative ways to provide incentives to farmers, ranging from giving low- or no-interest loans to growers to invest in water-saving irrigation technologies, to de-risking adoption of new farming practices by offering growers financial guarantees or longer-term contracts if they adopt new practices.

Examples in this vein include Unilever’s Knorr fund, through which the company invests 50 percent out of a pool of €1 million into projects that enable growers to try out new ideas and speed up the implementation of sustainable agriculture practices. Mars, for its Uncle Ben’s brand, pays a premium to rice farmers that adhere to its sustainable sourcing guidelines.

Target financial and educational support to the highest-risk areas

Prioritizing support is just as important as providing it. Some water resources and growing regions are more critical than others for a company and a community. And while water scarcity may be a major issue in one watershed, water quality may be the biggest challenge in another. Leading companies are doing analyses to determine which water sources are the most critical and the most endangered to tailor their aid. For instance, Kellogg’s has developed custom on-the-ground programs for growers in key at-risk regions, including in Louisiana, Thailand and Bangladesh. These programs support 17,000 agricultural suppliers, millers and farmers in 22 different countries to improve water use and watershed quality.

It’s commendable that Tyson is joining with leading food and beverage companies in setting sustainable sourcing goals that address water quality challenges. But to deliver on those goals, Tyson — and all other food companies — need to make grower engagement front and center. Farmers will be the linchpin to their success.


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