Sustainability and Supply

June 6, 2012

Strategies employed by leading ingredient suppliers

Whether it means ingredient production that doesn’t hamper the planet, or harvesting practices that sustain the lives of farmers, ingredient suppliers are taking it upon themselves to set up business methods that reflect what “sustainable” business means to them.

Nutritional Outlook caught up with a few leading suppliers. For ingredients like cocoa and stevia to lutein and curcumin, here’s a look at some of the ways suppliers are encouraging sustainability for farmers, consumers, and the planet.

Farmer Wages

The story of the exploited farmer is familiar to most consumers by now, with farmers’ wages often a focal point of the issue. Fortunately, ingredient suppliers are finding ways to improve the livelihoods of farmers and company business.

Sabinsa (East Windsor, NJ) is a leading supplier of ayurvedic ingredients, such as Coleus forskohlii, source of the common weight management ingredient forskolin. The company is eager to report on the success of its buy-back program, which guarantees coleus farmers a fixed price for their harvests, even before harvests occur. In cases where severe weather limits production, the company guarantees compensation-even at zero output.

Making these guarantees may sound risky, but Sabinsa marketing director Shaheen Majeed says it’s the best way to retain farmers (and thus supply and price) in India, a country where agriculture opportunities are as common as draughts and floods. Crops like sugar cane might initially settle on India for cheap land, Majeed says, but fluctuation may send business to China the very next year. Sabinsa provides a more permanent opportunity to keep production in India, with a stable price model to match.

Another company with roots in India, OmniActive Health Technologies (Morristown, NJ) takes similar risks on behalf of its marigold farmers, who farm the flowers for human-grade lutein ingredients.

OmniActive vice president Hiren Doshi says that several parts of the world experienced a marigold crop failure two years ago. But OmniActive’s lutein supply wasn’t impacted because the company makes sure to grow lutein in multiple regions in case weather impacts one area. The firm grows lutein in two regions of India, and farmers from both regions will earn guaranteed buy-back.

“We’re taking the risk on the farmer’s behalf,” says Doshi. “If we didn’t provide this kind of safety net to farmers, we wouldn’t have a reliable sustainable supply chain.”

Just as important, Majeed says that when price models like a buy-back aren’t in place for some ingredients, this poses another risk: spiking.

If, after months of farming, farmers haven’t reached a level of production needed for pay, they may resort to spiking the soil to increase active levels of key nutrients in the harvest.

Which is why Majeed says Sabinsa often performs tests right at the field. “Whatever we take into our labs for production, it’s always tested,” he says. “Chemical alteration? You really can’t get it past us.”

Premiums

When farmers improve the quality of their harvests through legal non-spiking means, some companies offer greater compensation. In the case of Cargill’s (Minneapolis) cocoa and chocolate ingredients business, farmers who achieve advanced certification for agricultural practices can earn premiums on their output.

In the Ivory Coast next year, Cargill plans to train about 60,000 farmers from 90 cooperatives under free farmer training programs. After participating in these programs, cocoa farmers can opt to obtain independent certification for sustainable agricultural practices with UTZ Certification Good Inside, a fast-growing certification body for coffee, tea, and cocoa products.

“Our on-the-ground activities are supporting cocoa farming communities and contributing to the long-term sustainability of cocoa production, as well as enabling us to source better-quality cocoa, and more of it,” says Steve Fairbairn, head of corporate communications for Cargill in Europe, the Middle East, and Africa.

Fairbairn says that in August 2011, Cargill made premium payments totaling more than $2.2 million to 26,500 certified cocoa farmers in the Ivory Coast. “Over 50% of these payments go directly to farmers, with the remainder being invested by the cooperatives to provide assistance to members and to build local community facilities,” adds Fairbairn.  Thanks to the extra training, farmers are also benefitting from significant improvements to their yields, bean quality, and pest control.

Planet

It just makes sense that increasing yield is one of many ways companies are actually lessening their impacts on the environment.

Stevia supplier PureCircle (Chicago) has made reducing the carbon footprint of sweeteners a signature part of its business model. By default, the small stevia plant can make for minimal land usage compared to other sweeteners, and minimal land usage means a smaller impact on the surrounding environment and biodiversity. In fact, PureCircle says its stevia growing takes up no more than 10% of any farmer’s usable land. These farmers will plant stevia alonside other crops.

When it comes to stevia production especially, improving ingredient quality can directly result in less land use. In order to improve the efficiency of stevia as a sweetener,  companies like PureCircle are developing stevia breeds with higher levels of steviol glycosides-stevia’s active sweetening compound. A plant with greater sweetening means more sweetness produced from fewer plants and less land.

But, in some cases, planting more can be as beneficial as planting less. In order to protect future crop supply, ingredient suppliers may need to do their part to make sure they aren’t overharvesting plants.

Sabinsa’s Majeed illustrates how this type of sustainability affects his company’s pterostilbene supply, which is sourced from the Indian kino tree.

“There are raw herbs which come from trees wherein the whole tree has to be cut down,” says Majeed. “In these instances, [oversight by] the government of India is very strong. You have to be licensed by the government to take down a tree, and in those cases you [must grow] two trees for every one you take down.”

Majeed says his company has entered into a 25-year agreement with the government of India through which Sabinsa and India will monitor and facilitate the sustainability of kino trees.

Human Health

Protocol intended to protect the public health should be a part of any sustainability discussion.

OmniActive has its own story in lutein.
As an isolated nutrient, lutein is relatively new to consumer markets. But the marigold oleoresin from which lutein is sourced has longstanding use in chicken feed, where it increases the yellow color of egg yolk.

“When you are growing marigold flowers for chicken feed application, the level of attention paid to the details is different,” says OmniActive’s Doshi. “In feed applications, specific preservatives were added to the flowers to protect them, so that they would give more yellow color to the eggs. Now, those preservatives-including ethoxyquin, butylhydroxyanisole (BHA), and tert-butylhydroquinone (TBHQ)-are actually banned in some locations throughout the world.”

As a control measure to avoid the presence of these preservatives in the human-grade lutein market, OmniActive strictly controls the use of these preservatives and agrochemicals in its agriculture and processing steps.

OmniActive was recently named a finalist for the Nutraceutical Business & Technology (NBT) award for environmental excellence.