Olam flexes its ‘soft power’ through approach to certification

That’s according to Briony Mathieson, who is in charge of communicating Olam’s sustainability policy at the Singapore-headquartered global agri-business. 

When the first fair-trade certifiers introduced their stamps, developed to sharpen up practices in an industry whose supply chain made more money the closer it got to the retailer, “that started an industry, I suppose, of certification bodies​,” said Mathieson. “And there’s no doubt it has now become a bit of a trend​.”

This is largely because the “soft power​” side of global business, centred on certification and corporate social responsibility, has been increasingly bringing agriculture companies together with the NGOs that had at one time made a business of slamming them.  

To see how the corporate world has shifted, Mathieson points to how NGOs like Greenpeace and WWF operate today, often at a table in talks with the world’s biggest agriculture companies, and with funds from business to back their campaigns.

A seven-year veteran of rainforest charities, NGOs and lobby groups, she says “businesses have woken up​” and understand the benefits of partnership with sustainability causes. Manufacturers, in particular, get how a new generation of shoppers has become used to flipping over a packet to look for a product’s environmental credentials.

To give the market more of the certification it craves, Olam has just announced that two of its African coffee plantations have been awarded certification by Rainforest Alliance and UTZ. By meeting these standards its subsidiaries, Aviv in Tanzania and the Northern Coffee Corporation (NCCL) in Zambia, can meet the growing demand from international specialty coffee customers for single-estate, certified, traceable volumes.

Aviv’s Songea plantation expects to produce 1,600 tonnes of coffee from farms certified by Rainforest Alliance in 2017, with volumes supplemented with a smallholder coffee programme which currently has 1,665 farmers.

One of Africa’s largest Arabica plantations, NCCL’s Kasama property is the only one in the country with Rainforest Alliance and UTZ certification, and is responsible for 88% of the country’s 900 tonnes of total certified production. 

“Tanzania and Zambia have exceptional growing conditions to produce fine Arabica coffee, but historically both countries have suffered from limited investment, leading to lower volumes​,” said Varun Mahajan, commercial head of Olam Coffee Plantations in East Africa.

By investing in the process of being certified by two major bodies, Olam was committing to its smallholders that it would work with them to improve yields and income, Mahajan added.

“The Rainforest Alliance and UTZ certification now gives our specialty coffee customers that extra layer of reassurance of third party verification on top of our consistent quality​.”

Yet some of Olam’s customers don’t even require a sustainability mark for their products, Mathieson says. “They just want to know what you’ve done is the right thing​.”

Cost-conscious buyers, moreover, can sometimes be wary of the price attached to joining such certification schemes, which needs to be picked up at some stage in a long value chain. While much research has been carried out into consumers’ opinions, showing that many wanted to 

see sustainability marks on their foods, it is yet to be seen if they are actually prepared to pay a premium for them, Mathieson said.

This uncertainly is what led to Olam designing its own “livelihood charter​”—“an independent business-to-business sustainability stamp​,” as she puts it. Though it is not printed on any packaging, it does illustrate an undertaking by the agri-business to source fairly. The experience of working with certifiers for many years allows Olam in effect to take on that role.

“Given that we are at farm gate and have been for over 25 years, we know what those issues are; we help the auditors audit the supply chains; we’ve done quite a lot of the training for some certification bodies because we get our hands dirty as an organisation​,” said Mathieson. 

“We’ve been able to build those issues into our own assurance scheme, and certain customers will come on spot audits and site visits as we take a dual approach. Some will want to get certification, others will be happy to get their sustainable produce done under our own livelihood charter​.”