Chapter 3 - Supply chain

[2-6; 204-1]

Palm Plantations

We are aware that alone we will not be able to achieve all our objectives and that only through collaboration and cooperation will we be able to build a better world. We understand our supply chain as an ecosystem that includes not only our suppliers, but also our customers, special allies -including NGOs, academia, associations and specialized consultants, among others- local authorities and government entities with whom we work hand in hand to achieve our objectives and common commitments. We apply our We are Allies philosophy with a long-term vision and commitment, precisely because we understand that in order to achieve a sustainable transformation that generates prosperity and value for all those involved, there is no other alternative.

Within the materiality update, supply chain management and traceability is the second most relevant issue. For this reason, we have made a comprehensive commitment to achieve alignment and compliance with our core values and principles throughout the entire chain for greater resilience and consistency. Particularly, due to the level of risk exposure and complexity, we are committed to the assurance of our agricultural chains prioritized in environmental, social and governance criteria, working hand in hand with all those who are part of this ecosystem to take advantage of opportunities and mitigate risks. By working with agricultural raw materials -without having our own plantations or crops- we know that we have a great responsibility to the global food system and contribute to developing better practices for humanity and the planet, protecting natural resources and biodiversity and respecting the customs and rights of local communities.

→ Top developments:

With the Ubuntu – Supply Chain Monitoring and Verification System project, we were recognized as the ninth most innovative company in Colombia according to ANDI and DINERO.
Recognition from the global experts in responsible supply chain promotion and assurance, Earthworm Foundation, for the Ubuntu project and our progress towards zero deforestation.
Traceability to origin of 97% in Colombia, 92% in Mexico and 87% in Chile for the palm chain.
We involve 100% of the organization’s prioritized chains in our School of Allies.
Completion of the diagnosis of critical ingredients and contaminants and definition of a course of action, initially prioritizing the work for the reduction and elimination of MOSH and MOAH from raw materials.
Partnership with ABACO and the Alliance for Infant Nutrition to use data from country studies on health and nutrition to inform the public debate in the fight against hunger and malnutrition in Colombia.

Secure 100% of our agricultural supply chains through a responsible sourcing strategy.

[T6]

[ODS 12.2; 15.1; 15.3; 15.4; 15.5 ]

We continue with the implementation of the roadmap developed in 2019, which has been consolidated as the organization’s Responsible Sourcing Strategy. With the objective of leaving a better world for future generations, we work under what we call transformation logic, starting from coherence, empathy and working together with our long-term strategic allies.

In this way, we work every day from the origin of the prioritized raw materials and in each link of the supply chain, both upstream and downstream, to comply with our Alianza Team Policy Guidelines and thus protect and conserve natural resources, empower and contribute to the development of communities and the livelihoods of the producers who are part of our supply chain.

Our conviction to positively impact the relationship between responsible sourcing and nature drives us to go beyond our own operations, building solutions that positively transform the environment and generate well-being while responding to the needs and expectations of our stakeholders.

The Responsible Sourcing Strategy seeks to continuously align our processes and operations to comply with the principles and values declared for our operations and throughout the supply chain. For this reason, we have the following strategic work axes:

Ubuntu: Supply Chain Monitoring and Verification System
Supplier Engagement
Local Development

Ubuntu: Responsible and sustainable sourcing

The Supply Chain Monitoring and Verification System – Ubuntu, developed under a risk and compliance perspective with the support of our partner Earthworm Foundation (EF) -global experts in promoting and ensuring responsible supply chains- has become the key tool for monitoring the organization’s current and future supply chains.

This system evaluates critical environmental, social and governance aspects of agricultural supply chains, such as NDPE commitments (no deforestation, no peat and no commercial exploitation), human rights, communities, complaints and grievance mechanisms, traceability, monitoring and transparency, among others. It provides key inputs for decision making associated with the incorporation of new suppliers and the management of current suppliers. Additionally, it has an internal interdisciplinary corporate committee of the Vice-Presidency of Corporate Affairs, in charge of implementing the necessary adjustments and controls to comply with our principles and values.

How does it work?

Current Scope: Palm and Soybean Oil

With the implementation of Ubuntu, we have a comprehensive and end to end view along the supply chain with a focus on the territory, covering our direct and indirect suppliers such as palm fruit producers, communities of influence and proximity to protected or strategic areas for conservation (if applicable). Ubuntu’s main differentiating factor is based on our transformation logic. Working with each of our strategic suppliers, we link different actors and allies, promote transparency and transformation of the palm chain industry from the origin, achieving global recognition. In addition, we are committed to updating our human rights due diligence by broadening the scope to our supply chain, as part of our genuine interest and commitment to ensure the respect and protection of human rights in our own and third parties’ operations. Learn more here.

“Alianza Team, Nestlé’s Colombian palm oil supplier, committed to the transformation process and achieved an almost 100% deforestation-free supply chain in a short period of time. Its success is based on the definition and implementation of a holistic responsible sourcing program that includes smallholders.”

Earthworm Foundation

For more information click here.

Reaffirming that innovation, talent and sustainability are the levers that drive Alianza Team’s strategy and growth, the organization nominated Ubuntu as the process innovation with the greatest impact in 2022, placing us in the TOP10 of the ANDI Business Innovation Ranking in Colombia Learn more here.

Highlights:

We conducted the analysis of our palm oil suppliers at the corporate level.
We began updating our prioritized agricultural supply chains with Earthworm Foundation, under an in-depth analysis of risks and opportunities for 100% of the purchases of our businesses in Colombia, Mexico and Chile.
We conducted external verification of the organization’s NDPE IRF[1] for the palm chain.
The Bogotá and Morelia facilities participated in the pilot of the Program Assurance Framework (PAF) developed by Nestlé, with the support of Proforest. This initiative evaluates in depth aspects related to the implementation of human and labor rights management systems in both direct and indirect operations. The findings of this exercise highlight the existence of an advanced management system for the organization’s own operations. Based on the results of the pilot, we designed a work plan to continue advancing in the characterization of the workforce in its supply chain.

Trazabilidad a origen

[T4]

100% traceability to palm origin and mill for the soybean chain by 2030

One of Ubuntu’s criteria is the knowledge of the origin of our prioritized raw materials, which are palm and soy. Through a permanent relationship with our suppliers, we have developed a work scheme that allows us to go further and continue supporting them, highlighting their progress towards transparency from the origin of the raw material supply, involving their own supply base.

Palm oil

Palm oil is a fundamental raw material for the organization. We source from approximately 50,000 hectares, which belong to a production nucleus of up to 327,000 hectares made up of 9,765 producers in ten countries.

% Traceability at origin

97% Colombia

92% Mexico

87 % Chile

100% Traceability to extractor

100% Colombia

100% Mexico

100% Chile

Soybean Oil

We continue to map our soybean chain, understanding the particularities and challenges that this represents in relation to the scale and complexity of this chain. During 2022, with the support of Earthworm Foundation, we conducted an analysis of the organization’s responsible sourcing strategy focused on soybeans, covering these fronts:

Documentary GAP analysis in relation to the commitments for this chain.
Organizational traceability system: reporting and awareness mechanisms and evaluation formats.
Identification of risks and opportunities.
Reporting and communication.

With the results of this project, we will establish internal and external adjustments and action plans with our suppliers, to continue working in compliance with our principles and values stated in our Policy Guidelines. On the other hand, we highlight the progress of the traceability management at the mill, advancing in the fulfillment of our declared commitment to have 100% traceability at origin by 2030.

% Traceability 2021

Country of origin -100% -100

Mill/Silo/Processing facilities – 88.51%.

% Traceability 2022

Country of origin -100%

Mill/Silo/Processing facilities – 51.67%.

We will continue to work towards the corporate goal of reaching 100% traceability to the mill for the soybean chain. However, it is important to mention that the current figures are linked to the reporting period of six months. Understanding the challenges in the sustainability agenda of soybean cultivation and commercialization at a global level, we will continue to reinforce the importance of this commitment throughout the chain with the support of our direct suppliers.

Deforestation-free agricultural supply chain by 2030

Supplier Engagement

Local Development

On the road to nurturing a better tomorrow, we understand the challenges our suppliers face locally. That is why we seek to accompany them permanently in the development and building of capacities through initiatives and projects together with other partners. For raw materials of agricultural origin, we focus on ensuring that agriculture is developed in a responsible manner, thus enhancing the potential to feed and leave a better tomorrow for future generations.

In the engagement plan from the origin in our supply chain, the following lines of work are highlighted:

Promotion of economic development in the supply chain, including extractive companies, producers, including smallholders.
Implementation of technological tools.
Contribution to the well-being and development of the communities.

We seek to work with our partners to ensure development and regeneration, and thus conserve biodiversity, promoting the protection, conservation and restoration of strategic ecosystems such as forests, respect for the rights of communities and the improvement of the lives of farmers who are part of our chain. Furthermore, we promote good practices of regenerative agriculture, which are fundamental for the conservation of soil, water, biodiversity and increased resilience of producers.

Learn more about our projects focused on the development and management of small suppliers here:

See more

Identification of environmental and social risks in the fruit supply chain:

In collaboration with Fundación Proyección Eco-Social, we continue working with Extractora Sur del Casanare (ESC) where we are carrying out the characterization, evaluation and management of the economic, environmental and social risks of the fruit chain of its suppliers. In 2022 we achieved the development, validation and implementation of two modules in the risk capture, analysis and identification tool called VP-Visiprast, linking issues to be evaluated in terms of economic and social characterization, as well as environmental risks.

Based on the results of the analysis, the respective visits were made to corroborate in the field. The main value proposition of this project is the development of individual work plans per producer to promote sustainable agricultural practices in light of their needs, developing the capacities of producers who are part of the ESC supply chain.

RSPO Smallholder Certification:

Colombian Palm Plantations.

EntrePalmeros is the first group of independent producers in Colombia in the process of RSPO certification under the smallholders standard. We continue to work with Palmas del Cesar, contributing to the economic development of the producers and their environment, who are part of our supply chain, and strengthening good practices from the source. During 2022, we closed the gaps identified to comply with the certification. Our commitment is to accompany Palmas de Cesar in transforming from the origin and ensuring the best sustainability practices for its productive core, whose intention is to certify 100 fruit suppliers.

For more information: https://palcesar.com/42-pequenos-productores-crean-la-union-temporal-entrepalmeros/

EntrePalmeros

On the other hand, Alianza Team participated in the sixth meeting of Fruit and Input Suppliers of Palmas del Cesar, a space where we were able to share with the producers who are part of this project and work every day to leave a positive legacy in the Colombian countryside.

Palmas del Cesar Fair

It is important to highlight that with the above projects and initiatives we are impacting 44% of Colombia’s palm oil supply.

Voluntary Agreement for Zero Deforestation in the palm supply chain in Colombia

In 2017, we signed the Voluntary Agreement for Zero Deforestation in the palm supply chain in Colombia, and extended our commitment to 100% of the organization’s agricultural chains -both in our own operations and along the supply chain- as part of our conviction to go further to leave a better world.

In addition, we actively participate in the governance and monitoring committees, together with the communications committee led by the agreement, to ensure compliance with the proposed objectives and to broaden it’s scope.

We participated in the joint declaration of the Colombia Compra Sostenible commitment, agreement with domestic market actors for the support, purchase and promotion of Colombian sustainable palm oil, committing to work towards the sustainability of the supply chain and the promotion of sustainable practices from the source.

School of Allies – Corporate Volunteering

Colaborador Alianza Team México.

[ODS 4.4; 4.7; 8.2; 8.4; 8.6]

We conducted our fourth and fifth (semi-annual) editions of the corporate volunteer program Escuela de Aliados (School of Allies). Its objective is to transfer good practices in environmental, economic and social issues throughout our supply chain, under a comprehensive model based on our principles and values that assesses needs, transfers knowledge and transforms lives.

Highlights

4,104 working hours
49 knowledge transfer and capacity building sessions.
100 volunteers:
- 30 internal volunteers (Employees)
- 33 external volunteers (Students)
- 24 suppliers, 75% of which were suppliers of raw materials (MPL) at the corporate level.
Alliances with academia: Universidad de la Sabana and Universidad de los Andes in Colombia, Universidad de Concepción in Chile.
Strategic Allies: CECODES, Solidaridad, Amazóniko.

Main work fronts

Occupational Health and Safety

Sustainability

Carbon footprint

Risk Management

Human Rights

Gender equality

Get to know the history of our volunteers through this testimony of our volunteer Bryan Ezeamalu, Business Administration student at Universidad de la Sabana in Bogota, Colombia.

In turn, thanks to the support and accompaniment of our strategic allies, we conducted training sessions for our direct and indirect suppliers on the following fronts: Labor formalization in the palm sector; NDPE Commitments; Human Rights; and Relations with stakeholders, with the participation of 72 people.

To celebrate the fifth edition of volunteering in the second half of 2022, in partnership with Amazóniko, we developed an awareness experience regarding the disposal and use of household waste. We had the participation of employees and students, showing first-hand the importance of separating waste at the source. We had the opportunity to visit a collection center where we were able to properly separate more than 60 kg of materials in order to give them a correct disposal and use. We can all contribute from our homes to the efficient management of waste, and to dignify those who work as recyclers.

Manage opportunities and risks comprehensively under a transformation logic

Characterization of the chain – Monitoring and verification of corporate reputation in the chain.

[T5]

During 2022, current and newly created suppliers were constantly monitored in accordance with the warning signs of our due diligence process in the knowledge of counterparties, evaluating issues related to fraud, corruption and money laundering. Ensuring compliance with our principles and values throughout the supply chain, we have strengthened our Responsible Sourcing Policy, with a robust process of identification, evaluation and selection of suppliers, through which we ensure the integrity, compliance, transparency, quality and safety of all goods and services purchased.

In order to understand the dynamics of our sourcing, the main risks and opportunities we present along the supply chain, we have classified our purchases into 4 categories, which were supplied in 2022, in Colombia, by 811 suppliers, of which 95% were domestic suppliers and 5% international suppliers.

See More

B Lab – Better companies for the world

[ODS 8.4; 9.1; 9.4; 12.6; 12.6; 17.10]

In order to leave better companies for the world, we decided to evaluate 100% of our supply chain in partnership with B Lab, an organization that promotes the evolution of the current economic system towards a more inclusive, equitable and regenerative economic system for the planet.

The purpose of the Impact Assessment program is to measure and promote Triple Impact management in the supply chain, through an in-depth evaluation of environmental, social and governance issues, identifying gaps and establishing action plans.

Evaluation areas.

“Within the framework of the measurement and management of the triple impact around the B Impact Assessment, Alianza Team’s approach stands out in the region for promoting the participation of the total supply chain. This type of program seeks to measure a number of suppliers four times higher than the average in the region.”

-B Lab Colombia

See More

Contribute to food security and community welfare

[T3; T14; 2-23]

Alianza Team Chile.

[ODS 2.4; 8.2; 8.4; 9.1; 9.4; 12.2; 12.6; 15.1; 15.2; 15.4; 17.7]

Connected with our purpose of nurturing a better tomorrow, we know that day by day, from our deep knowledge in lipids and the different businesses of the organization, we are contributing directly and indirectly to food security. The concept as such is multidimensional. According to the Food and Agriculture Organization of the United Nations – FAO, it contains four dimensions: the physical availability of food, access to food, the use of food and the stability over time of the three previous ones, as elements that must be present simultaneously.

We ensure the highest international quality standards in our production processes, validated with certifications such as FSSC22000, RSPO, Kosher and Halal, among others. We also ensure the continuous availability of our products for our customers and consumers through our new digital marketplace Cuida Tu Vida, generating logistical efficiencies and joint efforts with our partners throughout the operation. In aspects of use and communication of our products, we maintain open channels with our customers and consumers through different channels to monitor and ensure satisfaction in the experience to remain their preferred option. Finally, our more than 75 years of history and organizational growth demonstrate that regardless of the conditions or situations that arise, with resilience and flexibility we have managed to maintain the three initial variables in a stable manner over time.

See more

Physical availability:

From our operations we ensure the highest standards of quality and food safety for the production of safe and quality food for human consumption in line with the highest international parameters such as FSSC22000 version 5.1 certified in our 7 facilities. We also have other credentials such as Kosher, Halal in Mexico and Chile, along with other credentials that together ensure our processes and the overall quality of our products in environmental, operational, and health and safety aspects, highlighting the meticulousness of our operation. See all our credentials here (Our Certifications – alianzateam).

Access:

Once our products are ready, which in 2022 totaled 422,663 packaged tons-through our different business units, we contribute to guaranteeing the accessibility and physical availability of our products. Whether through logistical efficiencies or by maintaining operational flexibility to supply the industry in large volumes, we work to ensure that our consumers and our customers’ consumers can always find their preferred products in their usual sales channels.

Specifically with the purpose of generating affordability to healthy eating, we developed Cuida tu Vida as the marketplace that offers products that contribute to wellness, nutrition and balanced life at affordable prices in Colombia. In May, we launched the digital sales platform, seeking to directly reach the consumer who trusts us and our products. Our repurchase rate reached 40% at the end of the year, confirming that our proposal is powerful.

Likewise, implementing our philosophy of content + purchase (read + shop), we enhanced our content around wellness, achieving that more than 20,000 people on average come to our site monthly and find answers in our content. We started the development of our portfolio under the brand Cuida Tu Vida, with products such as olive, coconut, flaxseed and chia oil with very competitive prices in the market. Then, we started commercial negotiations with different allied brands to help us enhance the portfolio offer, for which we challenged the logistical, accounting and planning and supply processes in the company. To date, we already have around 35 products in our portfolio, focused on wellness, nutrition and balanced life. We built the project team and today we are a new Business Unit with the vision of being the most recognized affordable food and healthy lifestyle marketplace in Latin America. We see a lot of growth potential with our current social media audiences. What are you waiting for to join us? Visit us at CUIDATUVIDA.COM

Use of the products:

Third, the use of our products is a fundamental aspect in the experience and satisfaction of the customer and/or consumer, so through the websites of our brands and their social networks, or the constant accompaniment of our specialized teams in lipids we manage to monitor this satisfaction and manage it to continue improving it. Visit our brands’ websites here:

Jappi: More plants, more life, more Jappi®. (Get to know us! We are products of Vegetal Origin | Jappi®)
Olivetto: With Olivetto everything is more (Get to know the world of olives and its pleasures | Olivetto®)
Gourmet: Eating well is good for you (Watch what you eat with Gourmet Cooking Oils ®)
Campi: The delicious taste of the countryside on your table (Campi® spreadable margarines for your breakfasts)
La Buena: Burns less and yields more (La Buena® Margarines for cooking, frying and spreading Enter!)
Kardámili: Exquisitely healthy (Kardamili)

We also have a complaints and claims mechanism that allows us to be close to our stakeholders and follow up on their requests. This year we registered 3,213 cases in Colombia, Mexico and Chile, answering 100% of them and resolving 100% of the reported situations; the residual is associated with erroneous reports or those not related to our operation.

Stability over time:

Finally, the continuity and stability of our business demonstrates the ongoing commitment we have as an organization to maintain the three dimensions above to the best of our ability over time. Being connected to our corporate purpose precisely leads us to always ensure that we meet the necessary production, delivery, distribution and communication of our products and solutions over time.

As mentioned in Chapter 2, we also have donation efforts under our Aliados Somos Más umbrella that seek to strengthen the management of partner organizations that serve vulnerable populations in terms of food through the delivery of periodic products or money for their operation. We contributed a total of 20,422 units of products to the different allies to be used for feeding children, pregnant and nursing mothers, the elderly and other populations in need throughout more than 14 regions in Mexico, Colombia and Chile.

In line with our commitment to reduce food loss and waste, we have made efforts from the planning stage to be more efficient and improve production forecasts, minimizing the expiration of inventories, as well as reprocessing or using them as inputs for other products without compromising their safety and quality. We are seeking alliances with our customers to join efforts and manage losses downstream in the chain. We seek to divert waste that is not viable for reprocessing to alternative methods such as composting, animal feed or use in the production of biofuels through our Manos Verdes (Green Hands) program.

In 2023, we will focus on systematizing and standardizing the process of quantifying the volume of food loss and waste, as well as systematically tracking reduction opportunities throughout the chain and strengthening program monitoring. This will enable us to set quantitative targets at the corporate level.

Health & Nutrition

[T2]

Carolina Betancourt Villamizar

The Team Foods strategic business group has been driving nutrition and health research for more than 10 years as a fundamental axis of its competitive strategy and as a substantial support to nourish a better tomorrow. During this time it has been perfecting the integration between two worlds: the “real sector” and scientific environments, in search of achieving synergies that exponentially drive value and as a result impacts on the population’s nutrition.

In this sense, our capabilities in health and nutrition are built from:

Conducting scientific research and contributing to the state of the art.
Disseminating the knowledge obtained to employees and allies through the creation of educational spaces.
National and international research centers.
Educating our employees and our allies and promoting healthy lifestyles.
Innovating in the development of high nutritional quality products.
Building policies for the use of ingredients for our portfolio in order to improve their nutritional condition.

In practice, all this work is reflected in information, reformulations, articles in indexed scientific journals, new products for our portfolio, greater knowledge and greater coverage of that knowledge.

To highlight, the Colombian Study of Nutritional Profiles (COPEN), in its 2018 version and its new version in development 2022 has opened a window for the impact of public health in Colombia. Its main objective is to identify dietary habits and patterns that constitute one of the cornerstones of health care in populations, as they are associated with the protection or risk of developing multiple diseases, especially those of a chronic and non-communicable nature.

This COPEN study has become an innovation and education tool for our businesses and the medical and nutrition academic sector. We have trained commercial and innovation teams with these findings through the Team Foods Nutrition Academy that has trained 88 people. With the academic sector, we have participated in building knowledge and state of the art by publishing five scientific articles that have been included in indexed journals. From 2023, we will work hand in hand with our allies ABACO and the ANDI Food Chamber in the Alliance for Infant Nutrition, using this scientific information for the service of the Colombian population and programs focused on working on food security.

No use of mineral oils

Committed to people’s health and the quality of our products, we do not use petroleum-derived oils in our processes. Accompanied by HACCP hazard analysis in all our facilities, and working with our strategic allies in our supply chain for the reduction of MOSH and MOAH contaminants, we work to ensure the highest quality standards in our products and services.

From our strategic business group Team Solutions, we have adjusted processes to be at the forefront in technologies and low contaminant products. We have a robust supplier selection process, deepened in the implications of raw material selection from origin. In total we have more than 20 SKUs in all our geographies that have contaminant mitigation for several customers.