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Alternative Structures Within Supply Chains

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Presentation on theme: "Alternative Structures Within Supply Chains"— Presentation transcript:

1 Alternative Structures Within Supply Chains
Greencity Wholefoods Alternative Structures Within Supply Chains

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3 Global Context of Commodity Trading Between them, the ABCD of food control over 70% of the global grain market. New entrants such as Glencore and Wilmar have made inroads to their market share (20%+). These firms have intensified vertical and horizontal integration and have long term implications for small-scale producers, hunger and the environment.

4 the hidden hand of commerce

5 The A,B,C & D of Food ADM- Archer Daniels Midland
Turnover $68 billion (2015) 32,300 employees 428 crop procurement locations 280 ingredient manufacturing facilities 39 innovation centres Corporate funder to ALEC (American Legislative Exchange Council) Involved in sponsoring ‘food safety’ Bills Most prominent recipient of corporate welfare in US history

6 The A,B,C & D of Food Bunge Turnover $61 billion (2014)
35,000 employees Lobbying expenditure $550k-$900k Lobbying includes: Expanding Biotechnology Liberalised trade with Korea, Panama & Columbia Changing grain export quotas in Ukraine Denying consumers right to chose

7 The A, B, C & D of Food Cargill
$107 billion (2016) 150,000 employees in 70 countries Owns 5 oil palm plantations carved from virgin rainforest Turns independent farmers into de facto bonded labourers through complex debt schemes & empty promises Forced child labour, trafficking and torture (Uzbekistan and Ivory Coast) Mercury poisoning in Iraq- 63k tonnes of seed grain treated with Methylmercury 850,000 frozen beef patties recalled after ecoli contamination 65 million gallons of acidic water into Tampa Bay mangroves in 2012

8 The A, B, C & D of Food Louis Dreyfus
$63 billion turnover 22,000 employees 81 million tonnes of commodities/ annum

9 New Entrants In Asia: Wilmar -$22 billion turnover (2013)
90,000 employees Cofco- $32 billion revenue 120,000 employees Purchased a 51% stake in Nidera, a Dutch grain trading company after China signalled a reduction in its self-sufficiency policy. In Europe: GlencoreXtrata- diversified from dealing in minerals and energy Acquired Canadian grain company Viterra in 2012 Agricultural activities increased by 43% in 2012 $232 billion turnover 200,000 employees

10 Horizontal Integration Examples
ADM moving into corn based ethanol production Cargill now entering the petroleum market Louis Dreyfus involved in asset management, real estate and forestry

11 Nourishing Change since 1978

12 Co-operative values Co-operatives are based on the values of:
Self-help  Self-responsibility  Democracy Equality Equity and Solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

13 Co-operative Principles
The co-operative principles are guidelines by which co-operatives put their values into practice. 1. Voluntary and Open Membership Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. 2. Democratic Member Control Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner. 3. Member Economic Participation Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership. 4. Autonomy and Independence Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy. 5. Education, Training and Information Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation. 6. Co-operation among Co-operatives Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures. 7. Concern for Community Co-operatives work for the sustainable development of their communities through policies approved by their members.

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15 Nourishing Change: Key Milestones for Fairtrade in Scotland 1960s Oxfam shops start selling crafts and Christmas cards made in developing countries 1970s Tearcraft, then Traidcraft are established as craft importers in the UK 1970s Tanica instant coffee powder from Tanzania becomes the first fairly traded food product to be imported into the UK 1979 VSO campaigners establish Campaign Coffee Scotland (CCS) 1980 Coach House in Balmore opens One World Shop opens in Edinburgh The Third World Centre opens in Aberdeen 1984 Commercial Distribution of coffee becomes possible due to collaboration between CCS and Greencity Wholefoods in Glasgow 1986 Greencity Wholefoods and CCS jointly organise the first ever Fair Trade conference in Scotland 1987 Equal Exchange brand is launched in collaboration between Greencity and CCS 1989 Equal Exchange is launched as a co-operative in its own right due to rapid demand and growth 1989 The international Fair Trade Association (IFAT) is launched partners: Equal Exchange, Oxfam, Traidcraft and Twin Trading launch Cafedirect, a flagship brand for the movement 1992 Cafedirect introduced in Co-Op and Safeway Scottish Stores 1994 Launch of the Fairtrade mark

16 Going forward…..direct from the farmer

17 …..and what of the future for organic food in Scotland?

18 Organic IS different Nutritionally different – New research has found significant nutritional differences between organic and non-organic food Helps combat climate change Food you can trust GM ingredients, hydrogenated fats and controversial artificial food colours and preservatives are banned Reduced exposure to pesticides Looking after our planet-Organic means working with nature not against it. No system of farming does more to protect Animal Welfare- Organic animals are truly free range. This means healthier animals reared without the use of antibiotics and wormers 50% more wildlife including pollinators such as bees 22% more bird species 75% more plant species

19 In the last decade, the rise in organic sales globally is not reflected in the UK…..
2016 sales figures in Scotland was £58 million (0.6% of total grocery spend)- up 11.7% after period of flatlining since The UK spend is estimated at £955 million (Kantar) The number of organic producers and processors has been declining since 2008: from 576 in 2014 to 539 in 2015 The area of organic land fell 7% in to 126,000 hectares (the 7th consecutive annual fall) Globally, sales exceed $80 billion and has continually expanded the last two decades Sweden sees growth of 39% in 2016 (2.3 billion euros) Germany setting a 20% target for land conversion France have set a target for the majority of French farms to be committed to organic or agroecological farming by 2025

20 Main blockers to growth:
70% of total UK sales are through multiples Organic isn’t recognised as a category in its own right No single body to communicate market intelligence None of the certifying bodies will share information on their licencees Lack of organic processors and manufacturers No single body responsible of the organic sector Primary resources often imported when could be grown in Scotland (estimated £30million lost in Scotland through this and leakage) Connecting businesses and consumers is not the remit of the organic certification bodies The Soil Association (Charity) does have b2c role but it is undeveloped B2B opportunities stinted due to certifying bodies holding back data Lack of innovation and diversity within the farming and manufacturing sectors Economic burden for certifying organic food is passed to end consumer Detailed organic import/ export figures unavailable for Scotland Too few large scale brands

21 2017 growth figures (UK) +66% Food For Life Catering Mark spend +30% Textiles +19.1% Foodservice +13% Beauty & Wellbeing +10% Home Delivery +6.3% Independent retail +6.1% Supermarket sales

22 Opportunities The Good Food Nation Bill & Scottish Climate Change Bill allows input and engagement Formation of a Scottish Organic Trade Board will bring cohesion to the sector, run by business for business - to provide national trade networking opportunities - to improve supply chains - to develop better farmer-community links -to encourage collaborative trading Unfulfilled demand growth in the domestic and export markets Scottish Gov’t manifesto pledge to support greater uptake in public procurement Land reform legislation could encourage a greater number of new entrant organic farmers as well as providing opportunities for communities to take over land to convert to organic

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