May 20, 2020

AB Sugar – driving sustainability through efficiency

water
Supply Chain
Sustainability
AB Sugar
Andrew Woods, ed. Marcus Lawre...
6 min
AB Sugar – driving sustainability through efficiency

When it comes to sustainability, AB Sugar is quite clear as to its objectives. “Our commitments are ambitious,” says CEO Dr Mark Carr, “...but represent the next step of our journey towards becoming the world’s leading sustainable sugar business.

Managing sustainability across such a large corporation, including its significant business in China, can be as tricky as it is rewarding. Spread across 10 territories and with a 30,000+ strong workforce producing 4.5mn tonnes of sugar annually, AB Sugar – part of the Associated British Foods PLC – is a massively challenging operation when it comes to implementing genuinely sustainable change. AB Sugar China itself operates two sugar beet plants in the country, with an output of 180,000 tonnes of sugar each year. With a company as large as AB Sugar, small changes have dramatic effects across its end-to-end supply chain and the associated communities.

Katharine Teague, Head of Advocacy at AB Sugar, is instrumental in realising the company’s ambitions in this space. “From an AB Sugar perspective, sustainability is how we've always run our businesses,” Teague explains. “We're always looking to do more with less. We don't actually talk about sustainability as an overall word. Instead, we look at it through the framework that we've established around ‘Global Minds, Local Champions’. We have broken sustainability into three pillars,” she explains.

Pillar #1

The first pillar of AB’s sustainability strategy centres around developing rural economies and its commitment to building vibrant and diverse supply chains. Through this pillar, AB aims to increase the prosperity of local communities, changing the influence of its supply chain from an agricultural base. “We’re looking at the kind of people we work with, whether they’re out-growers, or from distribution, logistics, services or suppliers and thinking: How can we increase the prosperity of those people while, at the same time, actually partnering with them to make great changes in our supply chain, and ultimately in some of our locations? How can we make sure our farms are the best and sustainable?”

In each of its operational territories, AB is eager to bring small hold farmers – through cooperatives, associations or in block farms – into its supply chain to ensure that it has sustainable cane for the future. Governments and international donors can then partner with AB to create real change on the ground, according to Teague. “We can then enable smallholder farmers and work with them on improving their yields. The way that they're farming now gives them greater food security and a profit share from the business. Those kinds of projects at the base of the supply chain are exceedingly ambitious, very rewarding and show how our supply chains are changing. It's not just about us, it's also about the communities where we operate.”

Each of AB’s businesses runs as a ‘local champion’ with a managing director who makes local decisions around what works for their market, customers and supply chain in the long-term. “Dealing with an issue like modern slavery,” Teague explains, “requires cultural understanding. We've come to a point now after nearly five years of working with international donors, experts and INGOs where we've established land champions in each business and worked with our communities to make sure they understand what land is, and that they have the right to own it. In Mozambique, there are now 1,200 people who three years ago didn't own their land.”

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Pillar #2

The second pillar of AB’s sustainability strategy is concerned with nurturing thriving and healthy communities. AB and Teague are obviously aware of recent scientific and public discourse regarding the effects of sugar and rising levels of obesity, but they’re not avoiding the elephant in the room. “You know, sugar… you either love it or hate it at the moment. But we are really, really understanding of the fact that we need to educate around our ingredient so there is an understanding of diet, as well as the wider obesity crisis and the complexity that surrounds it and our ingredients. We've made a commitment to educate 25 million people by 2030. We have a big footprint in Africa where our businesses there provide healthcare, education, schools and clinics.”

Pillar #3

As for the third pillar in AB’s sustainability drive, the company is increasing its focus on using resources responsibly. Its sustainability strategy aims to reduce its end-to-end supply chain water and CO2 footprint by 30%, while ensuring all plastic packaging is reusable, recyclable, biodegradable or compostable. “We have a large land footprint where we operate,” says Teague. “We also have input. We use water and have factories which obviously emit CO2. So, one of the things we're always looking to do is make sure we only use what is needed. We make sure we have really substantive conversations about reduction, and I'm sure you're aware that whatever goes in costs money and whatever comes out at some point was something that went in. We're constantly looking at that balance and ensuring that at every point along our supply chain now, we’re looking to reduce that impact. We've done a phenomenal job in each of our factories because that's where we're focused on reducing CO2 and energy input, as well as how we use water.”

AB Sugar China is a key example of the company’s progress in this area. AB’s Chinese operations employ more than 2,000 people and partners, and 11,000 growers. In its March 2018 ‘Global Minds, Local Champions’ whitepaper, AB Sugar China hailed its 18.5% reduction in water consumption over the previous season that was driven by an ongoing modernisation initiative that began in 2007. In addition to its progress with water usage, the firm has invested over RMB200mn (around US$30mn) in agricultural machinery to maximise efficiency and mitigate labour intensity for its Chinese operations, as well as working extensively with local farmers to educate them on the most sustainable growing methods. In the same whitepaper, AB Sugar China noted that growers’ net income has risen by 166% over the five years preceding publication, another direct result of the company’s intensive modernisation programme. Yield has leapt up significantly as well, with an increase of 35% between 2011 and 2018.

One of the headline-grabbing news stories of recent times involved plastic islands in the ocean. AB is keen to outline its efforts to reduce its reliance in this area. “We are a biomass,” says Teague. “We could be used to make plastics, which are obviously more sustainable if you want to call it that, but we also have plastic in our end-to-end supply chain from the carton and bags we send out. We're looking at how we reduce that down and ensure that all our plastics within our supply chain will be reusable, recyclable, biodegradable and compostable.”

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