What are the issues?
The UN estimates that between a third and a half of the world's population lives on less than $2 a day. Customers increasingly want to know that they can trust the products they buy. This is more than a safety or quality issue. They want to know that the workers who made their products were treated well and that the environment was protected.
What are we doing about it?
Policy
We have produced a Responsible Sourcing policy, which is based on international guidelines. It sets out some standards that we ask all of our suppliers to follow and where they cannot meet all standards today, to work with us to achieve them over time. These include respecting the law, limiting working hours appropriately and treating their workers fairly.
Our Responsible Sourcing Policy also lays out Whitbread's commitments to responsible sourcing and to our suppliers. We will treat our suppliers fairly and where appropriate, work with our suppliers to tackle challenging issues in the supply chain.
We are currently working to understand and identify the key issues that may exist in our supply chains, from environmental impacts such as the impact of farming on water resources, or the future impact of climate change on crop availability and distribution, to potential health and safety or labour rights issues that may exist in specific industries or geographies. With over 3,500 suppliers this risk analysis takes time, but it is an important piece of work that we are committed to completing this year.
See our Responsible Sourcing Policy
Responsible Sourcing projects
Based on the results of our supply chain analysis, we will develop further product-specific responsible sourcing policies. We will also be in a position to make better commercial decisions about priority areas and about how we can change our sourcing practices to have a more positive impact on the environment and the communities from which we source.
These changes will build further on the positive changes that we have already made to how we buy:
Rainforest Alliance coffee
From June 2010 all Costa coffee sold in the UK and internationally (except India and newly acquired shops in Europe - previously Coffee Heaven) will be 100% Rainforest Alliance CertifiedTM coffee.
In addition, 100% of all coffee production going to Costa International stores is Rainforest Alliance Certified as of May 2010 with exception of:
- Costa Coffee India; and
- Sites in Europe recently acquired from Coffee Heaven that are currently receiving only 30% Rainforest Alliance certified coffee.
This means that in total, at time of writing, approximately 70%
of the coffee supplied to all of our international operations is
Rainforest Alliance Certified. This includes all international
sites run by franchise partners and joint venture operations.
Costa is working to secure 100% certified coffee sourcing for
India and for newly acquired sites.
See the Rainforest Alliance coffee case study.
Costa cows and milk bags
Changing over to using milk sourced in the UK and transported in
bags rather than plastic bottles means we make better coffee,
produce far less waste and so save money.
See the Milk
bags case study.
Supplier engagement
We have now started to communicate our Responsible Sourcing Policy to all our suppliers and are working with them so they understand what it means for them in practice. We are reviewing all our suppliers to establish which ones are most likely to have difficulties complying with our policy. We will work with those suppliers as a priority.
We are also in dialogue with our suppliers to understand the sustainability and responsible sourcing initiatives that they have in place as we recognise the value of collaboration and two-way learning, as well as the need to avoid an unnecessary burden of compliance is not placed on upstream producers.
Buyer training
We have also begun to work with our own procurement teams so they understand the issues involved, and how they can help our suppliers to comply. For example, placing large orders at the last minute could encourage suppliers to breach the rules on overtime working. Alternatively, some products or countries may require additional due diligence or more careful supplier selection during contracting.
What are the challenges?
We have a broad range of suppliers who supply us with everything from linen to coffee, from food to cleaning products. We need to find a way to apply our Responsible Sourcing Policy consistently but also in a way that recognises the differences between these suppliers and cultural and business differences between countries.
There are costs involved for our suppliers in meeting our Responsible Sourcing policy. However, we have to remain competitive on our pricing so there is a limit to further costs we can absorb when we buy goods. We will be working with our suppliers and experts across the sector to find innovative and commercial solutions for keeping costs down.
Next steps
In the 2010/11 fiscal year we will:
- Require all our suppliers to sign up to our Responsible Sourcing Policy.
- Establish a system to ensure our suppliers comply with the Policy.
- Work with suppliers to help them improve their performance.
- Serve only 100% Rainforest Alliance CertifiedTM coffee in all our UK Costa stores (from June 2010).
