Why is this important?

As global demand for food continues to grow, responsible agriculture and sourcing have never been more important.

The key issue facing global agriculture is how to increase productivity in a more sustainable way to meet this rising demand. Sustainable sourcing also makes a real contribution to both poverty reduction and food security.

We want to operate in a way that improves the quality of life for local individuals and communities, helps the environment and ensures a consistent supply of our raw materials.

Through our local sourcing projects, we are helping smallholder farmers to improve yields and compete against imported crops. This increases the incomes from their farms, making a significant contribution to the alleviation of poverty and food security at a local level. Most importantly, we are empowering them economically, allowing them and their families an improved standard of living. Local sourcing also benefits HEINEKEN; it eliminates import duties, secures a sustainable supply of raw materials and reduces our transport-related environmental footprint.

In addition, much of our impact on the environment and resources indirectly lies with our suppliers. They are key to helping us reach our sourcing commitments. We are working together to ensure we implement the right practices throughout our value chain, and we ask them to respect and abide by the values expressed in our Supplier Code.
 

Our priorities

Our 2020 priorities are:

50% of our main raw materials to be supplied from sustainable sources

By sourcing sustainably we help to raise farming standards and support farmers all over the world in adopting improved environmental and social standards. We have adopted the Sustainable Agriculture Initiative (SAI) principles that will be the basis for implementing sustainable practices with our agricultural suppliers.

60% of agricultural raw materials used in Africa to be locally sourced within the continent

Our presence as a large buyer of crops and a manufacturer and brewer in Africa has positive economic effects on local communities. Continuing our efforts to improve the livelihoods of farmers and their families in the region through sourcing projects remains a high priority.

Ongoing compliance with our Supplier Code Procedures

The HEINEKEN Supplier Code, applicable to all our suppliers, provides clear guidelines for how we expect them to act in the areas of Integrity and Business Conduct, Human Rights, and the Environment. As a global market leader, we use our influence to encourage suppliers to adhere to these guidelines and to request their suppliers to do the same, supporting us in making a positive contribution to society.

 

Local sourcing

We source agricultural raw materials locally in 11 Operating Companies. We have projects in eight African countries, involving more than 100,000 farmer families. Through our local sourcing projects, we are helping smallholder farmers to improve yields and compete against imported crops. Local sourcing also benefits HEINEKEN; it eliminates import duties, secures a sustainable supply of raw materials and reduces our transport-related environmental footprint.

We also run local sourcing projects outside Africa, for example in Haiti where we committed to purchase locally sourced sorghum, improving the lives of over 18,000 farmers under the SMASH project. See for more information our 2013 Sustainability Report and this media feature.

Supplier Code Governance

Much of our impact lies indirectly with our suppliers, so we work with them to ensure we use the right practices throughout our value chain. Every supplier is asked to abide by our Supplier Code, and our governance procedure is laid out here. For details about how many suppliers are in each stage, see the relevant section of our most recent sustainability report.

Step one: signing
We aspire only to do business with suppliers who share our values. By signing the HEINEKEN Supplier Code, our suppliers agree to comply with our principles of integrity, environmental care and human rights, which are based on International Labour Organisation standards.
Step two: risk analysis
The intensity with which we monitor compliance against our Supplier Code depends on the risk profile of a supplier. Our supplier risk analysis (SRA) tool identifies suppliers based on their type of business and level of supplier-specific risk. All potential high-risk suppliers are required to go through step three of the programme.
Step three: monitoring
We use the EcoVadis platform and scorecard to assess compliance with our code, monitor performance and identify areas for improvement. Suppliers complete the assessment by providing evidence and completing a 360° EcoVadis scan. Suppliers considered high-risk, based on the scorecard, would be subject to a site audit according to Step 4.
Step four: site audit

The final step is a site audit by a third party using our supplier code as the basic assessment criteria. We use the SMETA¹ four-pillar protocol, so we can contribute to (and use) the database of audits held by Aim-Progress, the global responsible-sourcing platform used by close to 40 of the world’s leading consumer goods companies.

We prefer a continuous improvement approach to achieve compliance with the key elements of the Supplier Code. If cases of non-compliance are found we will discuss with our suppliers how they will be corrected, assuming the commitment from the supplier to correct the non-compliance within a given timeline. If there is no commitment or lack of corrective measures, HEINEKEN will cease to do business with that supplier and will ultimately terminate the contract.

Sustainable sourcing

We created procedures for how we procure sustainable agricultural materials, starting with barley, hops and apples. These procedures have been introduced to our key suppliers, who in turn are encouraged to work with farmers who grow their crops sustainably. Our sustainable sourcing procedures are based on the principles and practices of the Sustainable Agriculture Initiative Platform (SAI), an organisation of multinational food companies working towards a more sustainable food chain. We were the first brewer to join and are an active member of the Arable and Vegetable Crops working group, the Biodiversity Committee and Water Committee.

We are developing a Company-wide system that can reliably measure and report progress on our sustainable sourcing targets. Our reporting on sustainable sources is based on the concept of ‘mass balance’. This system does not require farmers to keep their sustainably-produced materials separate, but tracks what percentage of their materials are produced this way. It is fully auditable from farm to malting to brewery, but limits the cost burden on our suppliers and helps ensure consistent quality.

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