Announcing the move today (17 April) Olam said that AtSource will offer insight into the journey that these ingredients follow, from farm to manufacturing and retail customers.
Singapore-based Olam said the initiative will enable it to “assess and positively influence” the environmental footprint of the 4.7m farmers in the company’s supply chain. The “vast majority” of these suppliers are smallholders growing crops like cocoa, coffee and cashew in emerging markets, the company noted.
Growing focus on supply impacts
Gaining insight into the “true sustainability impact” of agricultural products is of growing importance for both Olam and its customers, the commodities supplier revealed.
Olam stressed the need to find a future for millions of farmers in developing economies that is “economically and socially sustainable” insisting that the availability of resources and climate change have placed the planet’s ability to generate enough food for the growing global population “at tipping point”.
In order for the food sector to take meaningful action and support change, reliable data and insight is required. However, this information is “difficult to obtain” due to the fragmented and complex nature of the global agricultural supply chain, Olam suggested.
Crops often follow a path that takes them from rural villages, to “many” intermediaries and are combined with other volumes from diverse sources before they reach a manufacturer.
This means traceability is a challenge requiring a new set of tools to help inform and plan environmental and social initiatives developed by food manufacturers, Olam argued.
“Leading companies in the food sector have been investing significantly in social and environmental programmes to source their raw materials more sustainably, but change is not happening fast enough. In the current context I would say it is impossible to state how much of the world’s food supply can be considered truly sustainable. It is the old adage that if we cannot measure it, we cannot improve it,” co-founder and CEO Sunny Verghese, said.
Olam’s solution
Olam said AtSource has been developed in answer to this challenge.
“AtSource will provide our customers with the most comprehensive sustainable supply solution for their raw materials. With AtSource we can now deliver the critical sustainability factors for the long-term resilience of a crop or ingredient from a particular producing country or region,” Verghese explained.
AtSource will provide manufacturers with “granular” data via a digital dashboard that tracks the social and environmental impact of a given product.
The data will be available at three levels. Entry will ensure products comply with Olam policies and that suppliers have signed the Olam Supplier Code, minimising risks at a country level and ensuring suppliers are engaged in responsible sourcing. AtSource Plus focuses on identifying opportunities for improvement based on 80 indicators across 12 topics, such as deforestation or water usage. Meanwhile, the most advanced platform, AtSource Infinity, allows Olam to co-create programmes with its customers to achieve a “net positive impact” by regenerating agriculture and living landscapes “at scale”.
“Using this information we can drive meaningful improvements through the supply chain from farm to customer. Make no mistake, capturing this information at scale and across all our supply chains will be a huge and costly task. But as the company closest to the farmer, we believe AtSource is a key driver in helping us to re-imagine global agriculture, by starting to mainstream sustainability before it is too late,” Verghese said.
AtSource will initially cover five commodities: cocoa and cashew from Côte d’Ivoire, coffee from Brazil and Vietnam, as well as onions and garlic from the US. By 2025, Olam wants 100% of its physically sourced volumes to be AtSource ready.