September 30, 2014

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2020: How Keurig Green Mountain Plans to Improve the Livelihoods of One Million People in Its Supply Chain

"We've put a stake in the ground by aiming to improve the livelihoods of one million people in our supply chains."

Rickpeyser2

By Rick Peyser, Director of Supply Chain Community Outreach, Keurig Green Mountain, Inc.

This is the first of a three-part blog series that will take readers behind the scenes on Keurig Green Mountain, Inc.’s sustainability commitments. The series coincides with the launch of Keurig Green Mountain’s 2013 Sustainability Report and its 2020 sustainability targets. Today's post is authored by Rick Peyser, the Director of Supply Chain Community Outreach at Keurig Green Mountain, who leads the company’s efforts to improve the livelihoods of coffee producers and their families within its coffee supply chain.

In 1987, I joined a small specialty coffee company with a big heart when it came to investing in the people and places that grew its coffee. The company has grown tremendously since then and gone through major transformations.

Recently we took on a new name – Keurig Green Mountain, Inc. The new name clarifies that Green Mountain Coffee Roasters, Inc. and Keurig are one company. But the real reason behind the name change was to reflect our evolution from a coffee company to an innovative beverage system company that also designs and makes state-of-the-art appliances to brew Keurig-CSR-Pickcoffee and other beverages.

Today, I oversee a portfolio of funded projects, conducted by on-the-ground NGOs that directly touch the lives of coffee farming families, helping them improve access to nutritious food, clean water, education, healthcare and a sustained livelihood. In fiscal 2013, we provided over $10.6 million in grant funding to 56 projects in 16 countries, benefitting more than 837,000 people.

With all the good work we have done, we’ve learned one thing. We can’t do it alone – collaboration is needed among buyers like us, suppliers, our industry and other partners. For instance, in 2013, we joined four other industry partners, including Starbucks and Sustainable Harvest Coffee Importers, in forming the Coffeelands Food Security Coalition (CFSC) to share best practices, tackle seasonal food security issues and work toward our goal of a more resilient supply chain.

Building a Resilient Supply Chain

Keurig Green Mountain is a more complex organization today, and with that comes a more complex supply chain that encompasses both agriculture and manufacturing. It is not lost on us the visibility we have into our coffee supply chain needs to be replicated on the manufacturing side as well.

One of our 2020 targets is to source 100 percent of our primary agricultural and manufactured products according to our new Responsible Sourcing Guidelines. We will start by evaluating the intersection between these Guidelines, traceability efforts and certifications.

It will take time to get there, but I am encouraged by what we have done so far – see our ninth Sustainability Report. The report is an important document for us, a result of many all-nighters and passionate conversations about what’s most important to us as an organization and to our stakeholders. As we confront tensions associated with growth and how we best use available resources, we took the opportunity to reflect, assess and challenge ourselves to think about where we are on the sustainability continuum and how we can apply our resources to maximize the resiliency of our supply chain.

What is clear is having a resilient supply chain is a fundamental priority and we must continue to do what’s right for our sourcing communities, and use what we’ve learned to be effective within our coffee supply chain as we expand our engagement with our other supply chains. For example, we have been buying Fair Trade coffee since 2000. From 2010 through 2012, our purchases were so significant that we were the world’s largest purchaser of Fair Trade coffee.

Improving Livelihoods – A Goal for 2020

But if that was enough a decade ago, it no longer is today as coffee farmers face the impact of climate change, food scarcity and Keurig-2020-Targetswater security, among other issues. This reality was a driving force when we established our new 2020 resilient supply chain targets, one of which is to engage and significantly improve the livelihoods of one million people in our supply chains.

Changing the Climate, Changing the World

Climate change has a direct impact on our coffee farmers and their communities. As an example, coffee rust a climate-related disease affecting coffee trees – has devastated farms in Central America. We took action by investing $1.9 million in a $7 million public-private partnership with the Multilateral Investment Fund (MIF) and Skoll Foundation, which supports Root Capital’s Coffee Farmer Resilience Initiative to help farmers impacted by coffee rust.

But problems caused by climate change often tend to be multifold, impacting both food systems and water security.

Food Security a Win-Win

We often take it for granted that food is available when and where we need it. But for some coffee farmers, food scarcity is a reality that impacts their ability to keep their families well nourished, let alone sustain a decent livelihood.

When a study we conducted with the International Center for Tropical Agriculture (CIAT) in 2007 revealed that food security was a significant issue for many coffee communities, we decided to partner with NGOs like Heifer International, Save the Children, Catholic Relief Services and others to support projects that help farming families increase home food production, improve food storage and provide them with the tools and training they need to diversify their crops and increase their access to the marketplace.

We followed up with another study last summer conducted in partnership with CIAT and the University of Vermont, which showed positive results of our efforts in reducing seasonal hunger in coffee growing communities. But it’s important to note food scarcity is tied to another issue – a community’s access to clean water for drinking and home food production.

The Importance of Water Stewardship

With climate change causing irregular rainfall patterns in coffee growing communities, production cycles are getting affected as well as Keurig_goal 3farmers’ ability to sustain consistent crop yields. Sometimes there is not enough rainfall to feed the crops; other times there’s too much rain, resulting in floods that wash away needed soil. We’re working with farmers on managing and protecting their water resources, including ways to increase their productivity per unit of rainwater and managing water consumption so they have enough potable water for drinking, cooking, household needs and home food production.

While we are working closely with coffee communities on these issues, access to water is a global issue and we're making a significant investment in water initiatives that will benefit people in coffee communities as well as in the United States and around the world. This includes a partnership we recently announced with Global Water Initiative (GWI) to drive on-the-ground work to improve management of water resources in coffee-growing areas of Central America. In addition, we have partnered with charity: water to bring clean drinking water to one million people by 2020.

Next Up: A Broader Approach

As we look ahead, we know our manufacturing supply chain will need to have as strong of a focus as we’ve given to our agricultural supply chain over the years. We're looking to our responsible sourcing program to guide us as we direct the same interest and passion toward improving the quality of life of our manufacturing suppliers.

We’ve put a stake in the ground by aiming to improve the livelihoods of one million people in our supply chains. It is a tall order, but it’s one we’re up for.

Next: What is Keurig Green Mountain doing to create more sustainable products? Monique Oxender, Senior Director of Sustainability, responds.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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