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Spices

Spices are essential to our product portfolio and used in many products, especially under our Maggi and Thomy brands. They bring the distinctive flavors that make many of our foods taste the way they do. In 2018, we added spices to our priority raw materials. We are determined to buy them transparently and sustainably.

CSV - Responsible sourcing - Spices - traceable

50%

of spices traceable in 2019

CSV - Responsible sourcing - Spices - responsibly sourced

39%

of spices responsibly sourced in 2019

Our spices supply chain

Unlike for many of our other priority raw materials, we are a relatively small purchaser of spices. We source most of them from countries in Asia, including India, Vietnam and Malaysia. India, the spice hub of the world, has a wide variation in agronomic conditions and grows almost half of the world’s spices. Outside Asia, we also buy mustard seeds from Canada and Ukraine.

The spices we need must be processed before they are suitable for use in our products, so we buy them from processors instead of farmers. Though we don’t have ownership over the supply chain, our direct suppliers have strong relationships with the farmers they buy from. Through this network, we have been mapping our supply base and increasing our level of visibility and transparency toward the far end of our spices supply chains.

Our approach to sourcing spices sustainably

We work with our suppliers and farmers to better understand our spices supply chains, ensure that we source our spices responsibly and deliver greater positive outcomes for farming communities in the long run. Our program focuses on six key spices used in our recipes: chili, coriander, cumin, turmeric, black pepper and mustard seeds.

Our aim is to progressively implement our Responsible Sourcing Standard (pdf, 2.4Mb)?through clear context-specific frameworks and by working proactively on any sustainability programs that are already in place. Through this, we aim to find new ways to support smallholder farmers and communities who are the most in need.

While there are good practices in place in our Canadian origins, our spices supply chain faces several challenges in our south Asian origins, including the overuse of agrochemicals and other hazardous chemicals. There are also risks with labor rights, including poor working conditions and child labor.

We recognize these risks, and we are working proactively with suppliers and farmers to address them. As the supply chain becomes more mature and we collect more data, our focus is on identifying those areas where we can have the biggest impact and working with our suppliers and NGOs (local and international), including the Sustainable Agriculture Network (SAN), to address them.

Transparency

As we move toward a more sustainable world, businesses throughout the industry are recognizing the limitations of relying on sustainability certifications to ensure ethical practices at their sourcing origins. Buyers and suppliers are starting to move toward an approach that improves transparency in the value chain and develops solutions by engaging directly with farmers through training, education, community support and collaborative initiatives. Having worked on responsible sourcing for years, we believe it is relevant to innovate and diversify our approach and tools.

In order to hold our suppliers and ourselves accountable, as well as driving industry-wide transparency, we have published the list of our spices Tier 1 suppliers and the list of their processing sites in our supply chain (pdf, 0.3Mb), along with the country of origin. This list will be updated with further granularity in 2020.

Natural capital

Improving smallholder resilience in India

With our NGO partner SAN, we are working on a pilot program in India to ensure we source spices responsibly. The partnership focuses on finding opportunities that will have the biggest impact, while recognizing that we don’t have the influence to tackle all issues at the same time.

Most of the world’s spices come from India, and about 98% of its spice output is produced by small-scale farmers, usually working on a farm smaller than two hectares, and often not more than one acre. Many of these farmers seasonally rotate other crops along with spices.

This context presents several sustainability challenges, including the overuse of agrochemicals and the use of hazardous chemicals; a lack of soil and nutrient management; market price fluctuations for spices and other crops; pest infestations and changing climatic patterns; reductions in groundwater availability (a growing critical concern in India); scarcity of labor; and labor rights issues.

To help tackle these issues, our program has identified four pillars:

  • Resilient livelihoods.
  • Environmental sustainability of farms.
  • Safe living and good working conditions.
  • Workers’ rights and child labor.

We believe that the most effective solutions come from a foundation of local knowledge. Our project started by assessing the conditions in farming areas and analyzing the initiatives already in place. Following this, we established local partnerships to help us tailor our approach. This means developing action plans to help us effectively implement our Responsible Sourcing Standard, plus training farmers and suppliers. We are also implementing a framework to track our progress on relevant sustainability indicators, which we will start to report on in 2020.

For further information about the Responsible Framework, the sustainability indicators and videos from the origins, please visit SAN’s website.

Connecting suppliers and farmers in Vietnam

Nestlé sources both coffee and pepper in Vietnam. For the last 10 years, the Nescafé Plan’s Vietnam Farmer Connect team has been working closely with coffee farmer communities to promote intercropping models – the growing of additional crops to boost incomes – which 65% of these farmers have adopted. Intercropping comes with sustainability benefits, such as improving a farmer’s resilience to market price fluctuations by diversifying income. It also has beneficial agronomic and environmental implications for soil health, water retention and reduction of chemical pest management, as biodiversity in the plantation mitigates risks of pest attacks.

This climate-smart model inspired Nestlé to connect other purchased agricultural materials, such as black pepper in Vietnam, to the Nescafé Plan program areas. In 2019, three Vietnam-based Nestlé pepper suppliers were connected to the Nescafé Plan’s local teams and targeted coffee/pepper dealers to engage sourcing operations. They will expand their footprint in 2020 and beyond.

The vision is to maximize our global black pepper procurement from intercropping agricultural models as an alternative to monocropping systems, which can be harmful to natural capital and financially risky for farming communities.

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