Fair and environmentally friendly purchasing
We discuss sustainability initiatives with all our suppliers. One condition for delivery is signing our suppliers code, which includes requirements in terms of human rights, animal welfare and the environment. Sustainability has been part of our supplier assessment system since 2016. Sustainability (and the requirements in the suppliers code) are also topics in the associated audits. We audit our key suppliers every three years. If we find irregularities, we keep note of them in an audit report and agree measures with the relevant supplier. We then follow up this plan of action until the measures are put into action. From 2018 on, we also assess the level of sustainability of our investment plans, paying particular attention to the environmental benefits of new measures. Finally, we examine how we can improve the sustainability of purchases that carry (major) environmental and social risks.
Sustainable palm oil
Since late 2014, we buy only sustainable palm oil (Roundtable on Certified Sustainable Mass Balance Palm Oil, RSPO). This means that palm oil producers in Indonesia, Malaysia, Colombia and Costa Rica are tested against criteria such as preventing deforestation, low pesticide use and good working conditions. We incorporate palm oil into our fat filled milk powders. We replace milk fat with vegetable fat, retaining the nutritional value. Since 2017, our production site in Scharsterbrug is certified for the use of RSPO palm oil, meaning that our customers can now include the claim RSPO-certified palm oil on their packaging.
Responsible soy lecithin
Soy lecithin, which we incorporate into some of our products, ensures that our milk powder dissolves quickly in water. Since late 2015 we have been using ProTerra-certified 100% responsible soy lecithin. This means that the soy beans are cultivated in accordance with sustainability criteria, in our case in Brazil. Those criteria include the protection of workers, small farmers and vulnerable areas.
We see that the attention of society, our customers and the government for sustainable packaging is growing. This concerns not only recycling and use of less material, but also circular solutions and the use of renewable raw materials. Our main packaging materials are tin, plastic and paper, and the packagings play an important role in the quality and food safety of our product. For this reason, making our packaging more sustainable is challenging. Our intention to take a hard look at the paper in our bags sadly did not work out as we focused on long-term projects like enriching milk powders and the climate-neutral plan. In 2019, we will focus on it, and we will launch a number of plans with customers and suppliers to make our packaging more sustainable. We want to lay down targets with them for the next few years.
Lower CO2 emissions from milk transport
Our MMC transporters drive some 2.5 million km per year to take our dairy farmers' milk to our factories. We try to do this with as little fuel consumption and greenhouse gas emissions as possible. With smart journey planning, for example. What also helps, is that our transporters have purchased more energy-efficient trucks. Almost all trucks comply with the stricter Euro 5 and Euro 6 emission standards. In 2018, the MMC CO2 emissions were more than 13% lower per kilogram of milk in comparison with 2013. In 2017, this was 11% lower.
Our other transport
In 2018, 93% (in 2017: 91%) of the container transport organised by Vreugdenhil was by ship from the factory in Gorinchem to the ports of Rotterdam and Antwerp. From Scharsterbrug, 71% of the container transport organised by Vreugdenhil to seaports was by ship in 2018 (in 2017: 76%). It was our ambition to start shipping part of the container transport from our Barneveld site by ship in 2018. This has been achieved, as 192 containers were transported to the port by ship from Tiel.
In addition, we aimed for more efficient transport by e.g. transporting lactose in bulk across shorter distances, by producing and processing more skimmed concentrate ourselves and by optimising our internal transport.
Products from Gorinchem, our biggest production site, are transported by ship as standard (only in exceptional cases by road). As a result, CO2 emissions in 2018 were 14.2% lower than in the reference year 2011, when that was not yet the norm.
Transport of our products is closely connected with production volume, customer demand, capacity in the port of Rotterdam and stock storage. If the number of customers in Europe grows, the share of road transport will also grow. If capacity with our carriers and the port of Rotterdam is limited during a peak period, this affects the possibilities of transport by ship. These are variables that we cannot always control and that are hard to predict. What we can control, is a predictable and optimal production process. That is what we will work hard to achieve in 2019 on our Gorinchem production lines.
Our goal is 20% lower CO2 emissions per tonne of product in 2022 in comparison with 2011. We expect to be able to achieve this goal by further growth of container transport by ship. This is an ambitious challenge, which is only achievable if we work together even more closely with our carriers.