Supply Chain
General Mills Launches $1.1 Million Sustainable Sourcing Program in Peru

As part of General Mills’ long-term sustainable sourcing program, the consumer packaged goods (CPG) giant and its Foundation on Thursday announced a four-year joint commitment with supplier partner AgroMantaro to provide $1.1 million to help smallholder artichoke farmers in Peru increase yields and improve profitability.

The goals of the new program, which will reach nearly 100 small-scale artichoke farmers in Peru, are to:

• Provide training on crop management and post-harvest practices
• Provide microloans to purchase artichoke shoots and seeds for farmers who lack collateral or a verifiable credit history
• Offer program participants in-depth training on how to form farmer cooperatives
• Provide financial planning education and information on how to formulate business plans

Depending on how much land farmers devote to artichokes, families can increase their income by an average of 36 percent annually. Peru’s central region was previously known for cultivating crops such as potatoes and grains, which have lower income potential.

General Mills is partnering with supplier AgroMantaro and global humanitarian organization CARE, each of which brings unique strengths to the program:

• General Mills will share its extensive supply chain and agronomic knowledge in addition to providing financial assistance;
• AgroMantaro, relying on years of agribusiness experience along the Peruvian Sierra, will provide technical and agronomy engineering support, and financial assistance for seeds and plant shoots;
• CARE will leverage its expertise in facilitating community governance and local connections, provide key training elements, and work side-by-side with farmers and AgroMantaro to meet the project objectives.

General Mills sources its artichokes for France’s top-selling brand, Le Géant Vert (Green Giant) from farmers in Peru’s Sierra region.

“CARE is thrilled to build on its long-standing partnership with General Mills and the General Mills Foundation,” said Milo Stanojevich, country director for CARE Peru. “Working with the Green Giant brand and their local supplier, CARE will empower marginalized farmers in Junín, Peru to improve the production of artichokes, create an effective and sustainable production chain and ultimately improve the quality of life for their families. This project demonstrates how innovative corporate non-governmental organization partnerships have the ability to create opportunity for the poor while meeting a business need.”

“General Mills celebrates a century-long history of working closely with farmers around the world to promote sustainable agriculture,” said Jerry Lynch, vice president and chief sustainability officer at General Mills. “We continue that tradition with an increased focus on improving the environmental, economic and social impacts of sustainable sourcing. We’re not going to see dramatic change unless we make investments to help farmers grow more and improve their livelihoods. Working closely with great organizations like CARE and AgroMantaro, we can create positive, long-term changes.”

Part of the General Mills-AgroMantaro commitment is to help Peruvian farmers obtain microcredits to purchase new seeds or plants. Historically, Andean farmers have not had reliable funds or enough savings to secure future plantings. This new program centers on the farmer – providing them with technical assistance, knowledge sharing and financial support for seeds and plants.

“By focusing on the farmers, we created a rich business model that fosters world-class value throughout the entire supply chain — for the farmers, our company, our clients and the end consumers,” said Augusto Fernandini, general manager and partner at AgroMantaro. “Our aim is to create a positive blend with farmers sharing their local experience and our company sharing insights on how to build a sustainable and profitable farming business.”

From China to Mexico, General Mills has advanced several programs directly benefiting smallholder farmers. Most recently, General Mills, its Foundation and Häagen-Dazs launched a program in Madagascar to foster greater economic vitality for smallholder vanilla farmers to ensure the availability of high-quality vanilla for future generations.

“This artichoke project in Peru is a great example of organizations with strong global networks coming together with a common goal to improve both sustainability and quality of life,” said Lynch. “Business is better and stronger if the farmers and vendors who supply us are strengthened at the same time. Although it’s just one example, we must continue to be a responsible corporate steward and use our resources to help improve the lives and communities of smallholder farmers in developing countries.”

General Mills’ work with its artichoke farmers is the latest of several projects announced recently by CPG heavyweights that reflect increased efforts on the part of the companies to create shared value with their suppliers. In July, for instance, Mondelez International unveiled a new training facility for its Vietnamese coffee farmers to promote sustainability and entrepreneurship. The company says this is a major step toward implementing its "Coffee Made Happy" sustainability program, which commits to investing at least $200 million to help one million coffee farming entrepreneurs by 2020.