Last year was a record-breaking one for the UTZ sustainable farming programme and certification scheme. Being able to provide companies with a scalable way to source certified sustainable commodities has been critical to its progress, as UTZ markets director Daan de Vries explained to Ben Cooper.
The Netherlands-based sustainable farming programme and certification scheme, UTZ, reached 910,000 farmers across 37 countries last year, while companies sourced more UTZ-certified cocoa, coffee and tea than ever. Yet the organisation arguably does not enjoy the same consumer profile as Fairtrade or Rainforest Alliance.
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While high levels of consumer awareness have been viewed as instrumental in the growth of Fairtrade, the success of UTZ demonstrates that is not a sine qua non for a certification programme.
"Consumer recognition helps us achieving our goals but it is not our main priority," says UTZ markets director Daan de Vries. "We do not focus on consumer communication ourselves but rather practise targeted B2B positioning and reach consumers through the partners we work with."
De Vries explains what UTZ provides to farmers and companies is more important. The UTZ "vision", he continues, is to be recognised as "a successful and credible business model" for farmers, and a "high-volume provider of certified products from the company’s perspective", while UTZ's position as a leader in the development of sustainable supply chains is underpinned by the programme's "demonstrated positive impact".
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The record volumes of certified products achieved in 2014 speak to the impact UTZ is having in agricultural communities. Certified coffee volumes were up by 16%, representing some 31 billion cups, while tea volumes rose by 18%, amounting to some two billion cups. However, the strongest growth was in cocoa, which saw volumes rise by 32% to reach the equivalent of 9.7 billion 100g chocolate bars.
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By GlobalDataAs with other certification schemes, it has been support from large corporations that has made substantial volume growth possible and de Vries is quick to recognise the role of the corporate partners. Among the major companies working with UTZ are Mars Inc, Dutch grocer Ahold, furniture retailer Ikea, coffee supplier D.E Master Blenders 1753 and Nestlé. Furthermore, de Vries says it was partnership with industry that allowed UTZ to take its first steps.
"The very start of the UTZ programme shows the importance of collaboration with industry," he says. "If it weren’t for Ahold Coffee Company, we wouldn’t be where we are now. They took the first step in taking sustainability out of the niche position where it was at the time. We need industry uptake for a sustainability programme to be a success and have the largest possible impact on farmer livelihoods."
However, de Vries also stresses what UTZ can do for companies. "We strongly believe that sustainable sourcing adds value to a business," he says, identifying scalability and enhanced traceability as key strengths of the programme for food companies and retailers. Also, he argues, UTZ certification "serves as an independent and trustworthy reassurance of the company’s sustainability practices".
Nevertheless, critical voices have suggested the lack of a minimum price for farmers in the UTZ model or a marketing fee to companies using the label offers corporations a relatively cheap way of capitalising on ethical shopping trends.
De Vries counters this suggestion. "The conception that without a minimum price UTZ Certified is a less costly way for brands to capitalise on the ethical demands of some consumers is not entirely valid." The principal objective behind the creation of UTZ Certified was "to make sustainability the norm", he says, which requires collaboration with industry.
"It is important to enable scalable sourcing of sustainable commodities. Coffee, cocoa and tea need to be sourced in large volumes in order to meet the need of these large brands. Therefore these sustainable commodities should not be expensive niche products but be available on a large scale." Not charging a marketing fee to companies using the UTZ label "makes the programme more affordable and therefore scalable", he notes.
Also, de Vries maintains having a "market-oriented model", with prices based on quality of produce, sustainability credentials and the quantity available in the market, rather than a centrally determined minimum price, ultimately helps farmers to develop economic resilience.
"The strategy of the UTZ programme rests on promoting economic resilience through diversifying the income of the farmer, promoting good agricultural practices, and improving the position of farmers in the negotiation process. In this way, UTZ supports profitability that is sustainable and focused on the long-term benefits for the farmers. We would like UTZ to be considered as a credible and successful business model from the farmer’s point of view. UTZ approaches the farmer as a businessman, an entrepreneur, and we want to teach him to become independent and lead a successful business, providing him incentive to implement best practices that are good for both him and the environment instead of making him dependent on a fixed premium."
While acknowledging the critical role of corporations, de Vries also stresses the importance of UTZ's multi-stakeholder membership. "Multi-stakeholder collaboration is indeed very important to us," de Vries tells just-food. "The UTZ programme works from both a top-down approach, using the Code [of Conduct] to meet market requirements, as well as a bottom-up approach of analysing the major problem areas for farmers on issues that have the most impact on income and sustainability."
The code is reviewed every five years by all the stakeholder groups, namely producers, academics, industry members and NGOs. The most recent review process began in 2012, with the new code launched last year. Notably, measures to help farmers adapt to climate change have been incorporated into the code, with a focus on awareness raising, risk assessments and diversification of production. A recent UTZ project in Vietnam saw 1,250 farmers trained in how to adapt to climate change, with detailed climate change action plans developed for two provinces.
Building on UTZ's success in coffee, tea and cocoa, the organisation is now moving into other product areas, namely rice, herbal teas and hazelnuts. In 2014, UTZ began working with four of its founding partners, Migros/Delica, Spain-based chocolate supplier Natra, German retailer Rewe and Dutch grocer Jumbo Supermarket, on the development of a programme for sustainable hazelnuts, with 1,000 hazelnut farmers participating in a pilot project. "A large proportion of hazelnuts are used in the confectionery industry, often alongside cocoa," says de Vries. "So addressing sustainability in the hazelnut sector is a natural next step for confectionery companies that want to use more sustainable ingredients." The first UTZ certified hazelnuts are due to reach the market in 2016.
