Organic growth: What drove Wessanen to cut 90% of its revenue?
The Dutch food group had turnover of about €4bn in 2000 and employed 17,000 people. Today it employs about 700 people with turnover of €434m last year – but this huge reduction in staff and revenue has been a calculated decision, based on aligning its activities and values to create a more sustainable company.
Sustainability also implies an ability to sustain the business over time on an economic level as well as an environmental one, and since new management came on board five years ago, Wessanen’s share price has more than doubled.
“They wanted sustainability to be embodied in their vision for the company,” said Laurence Beck, director of the company’s organic expertise centre, quality and R&D.
As a result, they divested any business units that did not fit with this concept, including distribution activities, meat, frozen foods and beverages, and acquired companies that did, such as Clipper teas, Alter Eco and Abafoods.
The starting point, she told delegates at the Sustainable Foods Summit in Amsterdam last week, was a broad view of the problems facing the planet – and therefore, business – in the coming decades, such as an increasing population, rising obesity rates, soil degradation, the destruction of rainforest and the rise of food allergies. The company then aimed to base its business on four pillars intended to address these issues: organic, Fairtrade, vegetarian, and nutritional.
Beck said the benefits of organic agriculture may be open to debate but added: “Our conviction is that organic is the ultimate sustainable food…taking care of the soil to improve its fertility.”
She said the aim was to change from a food generalist to a specialist in healthy and sustainable organic food, and to make the business model healthier and more sustainable in the process.
The company’s portfolio now consists of 68% organic products, 45% of its hot drinks and chocolate is certified Fairtrade, 82% of products comply with its nutritional policies, (which specify certain limits for sugar and salt, for example) and 100% of its palm oil is RSPO certified, with 79% coming from segregated and mass balance sources while 21% is accounted for through GreenPalm certificates.
Beck acknowledged there was more work to be done, including moving to more segregated palm oil and communicating the origin of products more proactively to consumers.
“We don’t need to produce more food to feed the world more healthily,” she said, adding that instead this was possible instead by reducing waste, changing to more plant-based diets, looking after the soil, and better balancing food supply between the global north and south.
