7 Top CPGs Tackle Supply Chain Water Risks

As climate change, population growth and water pollution increase pressure on freshwater resources, seven global food and beverage companies made commitments to work with thousands of growers in their global supply chains to reduce water use and pollution impacts.
The seven companies – Diageo, General Mills, Hain Celestial, Hormel Foods, Kellogg, PepsiCo, and WhiteWave Foods – are participants in the AgWater Challenge, a collaborative initiative organized by Ceres and World Wildlife Fund (WWF).  Participants submitted detailed sustainable sourcing and water stewardship plans and the companies meeting specific criteria were recognized by WWF and Ceres as AgWater Stewards. A progress report on their commitments will be issued in one year.
One-third of the world’s food is grown in areas of high water stress or competition, and agriculture is a leading cause of water pollution worldwide. The food sector, which uses 70 percent of global freshwater supplies, primarily for growing crops, can play a critical role at protecting limited freshwater resources by working with farmers to become more water smart.
Commitments by Challenge participants include:
    PepsiCo will work with its agricultural suppliers to improve the water efficiency of its direct agricultural supply chain by 15 percent by 2025 (compared to 2015) in high water risk sourcing areas, including India and Mexico;

    Hain Celestial is setting a new sustainable sourcing goal for key agricultural inputs, including a commitment to strengthen water and fertilizer management practices of farmers in its ingredient and protein supply chains;

    Hormel Foods will develop a comprehensive water stewardship policy, setting water management expectations that go beyond regulatory compliance for its major suppliers, contract animal growers and feed suppliers – a meat industry first.  Hormel Foods will also support and engage with growers in high water risk regions by gathering water-related data from contract growers and growers that supply animal feed - and establishing time-bound goals aimed at improving water quality in high water risk regions; and

    WhiteWave Foods will develop a time-bound road map for agricultural water stewardship over the next 24 months that addresses shared water challenges facing their key commodities (dairy, soy, almond and produce in particular) in areas of greatest water risk, including California. They will also support and scale projects that restore freshwater systems in areas material to supply chains and engage in policy advocacy to strengthen water management in high risk priority sourcing regions.
In addition to new commitments, the AgWater Challenge recognizes companies with far-reaching, ongoing commitments. Diageo, General Mills, and Kellogg were recognized as AgWater Stewards for showing action across all five categories of the groups’ AgWater Challenge checklist – from water risk assessments and setting reduction goals, to reducing water risk in agricultural supply chains and supporting producers in addressing these issues.
Among these companies’ commitments:
    Diageo committed, by 2020, to establish partnerships with farmers to develop sustainable agricultural supplies of key raw materials such as barley, maize, agave, aniseed, sugar/molasses, sorghum and cassava. The company has also committed to sourcing 80 percent of its raw materials locally in Africa by 2020 and equipping its suppliers with tools to protect water resources in the most water stressed locations including in seven African countries.

    General Mills completed a comprehensive risk assessment, including water use and water quality risks, of all raw materials bought worldwide, and a global water risk assessment of all its production facilities and growing regions, identifying 8 high-risk watersheds. It is partnering with local stakeholders on sustainable sourcing through collective action and policy advocacy in several high water risk regions, including in California.

    Kellogg Company committed by 2020 to responsibly source its global 10 priority ingredients (including rice, wheat, corn and sugar beets), by measuring continuous improvement for row crops through metrics focused on water, fertilizer use and other factors. Kellogg is supporting 17,000 agricultural suppliers, millers and farmers across 22 different countries to optimize water use and enhance watershed quality, such as by providing financial and agronomic assistance.
The AgWater Challenge aims to spur companies to make time-bound and measurable commitments to reduce the water impacts associated with key agricultural commodities, implement locally-relevant strategies to mitigate risk in agricultural areas where water is scarce or polluted and support and incentivize farmers to strengthen water stewardship practices.
To be named an AgWater Steward, companies had to complete minimal criteria, including setting a time-bound goal for completing a water risk assessment across their supply chains and setting sustainable sourcing goals. While all companies went beyond the minimum criteria, the AgWater Challenge recognizes that all companies’ efforts are a work in progress.
WWF and Ceres will complete a more in-depth analysis of the companies’ water stewardship efforts and report on their progress in one year.
In 2017, Ceres will evaluate the companies’ adherence to their commitments through the release its second “Feeding Ourselves Thirsty” report, which benchmarks global food and beverage companies on their water management practices. All of the AgWater Stewards will be benchmarked in the report, along with several dozen additional companies.