Haulage companies are reported to be increasingly concerned about the future of road freight in northern Europe, it seems.

According to Danske Bank’s latest freight forwarding index, businesses are not optimistic about growth in the sector in the coming months, the Loadstar reports.

Although overall confidence levels in the cargo transportation industry were up to 63 on the barometer for May – up from just 50 last month – road haulage specialists only posted a score of 57 for June and 47 for July.   Any reading below 50 represents a contraction in predicted activity.

This report ties in with recent research by IBISWorld that showed the road freight industry will continue to face many challenges between now and 2019, with fuel costs being a particularly prominent issue.

The Danske Bank study also indicated that logistics companies are looking to diversify their offerings by placing less emphasis on road transportation.   Many firms are now focusing on other areas such as rail freight and air cargo.

Health and Safety at Work has reported today that supermarket giant Asda has appeared in court after an employee slipped on an ice-covered floor in a storage freezer at the retailer’s Barnsley store.

Barnsley Magistrates’ Court heard that the worker suffered knee injuries and had to take several months off work.

When Barnsley Council environmental health officers investigated, they found that Asda had left employees to chip ice off the freezer floor and sweep it away. The company also failed to provide adequate personal protective clothing for staff working in the freezers.

At the site, officers served the firm with a prohibition notice, preventing use of the storage freezer.

Last week (30 May), the company was fined £20,000 and ordered to pay £33,000 in costs, after earlier admitting offences under Section 2(1) of the Health and Safety at Work Act.

District Judge Foster, who heard the case in the magistrates’ court, said Asda had shown a “dereliction” of its responsibilities.

The company’s systems were inadequate, he added, and there were unacceptable delays in identifying the problems.

In mitigation, Asda said it had spent £31,000 on repairs to the freezer since the August 2011 accident.

Source: http://www.healthandsafetyatwork.com/hsw/slips-trips-and-falls/asda-freezer-slip

Risk assessments must be completed and recorded by any employer who has 5 or more employees.  The assessments must identify the significant risks that are present in the workplace and must be suitable and sufficient.  This can become a complex and difficult exercise so here at Maurice Young Consulting we are here to help you with our risk assessment services.  Our risk assessment services will help you to identify problem areas.  We will walk through the assessment with you, step by step, making sure you understand all that is involved and have the necessary tools and skills to make any necessary improvements.  Many clients find that undertaking a risk assessment can be time consuming and confusing, we aim to make it as simple and clear as possible

The reputation of food and drink companies is tied more closely to legislation and regulations than any other industry. Brittany Golob investigates

They say you are what you eat. Meat, potatoes, fruit, veg, maybe a bit of chocolate. For millions of people this year, that list has unfortunately grown to include a tasty morsel or two of horse. The overwhelming crisis that has unfurled since January has left no link in the supply chain untouched.

Though the horsemeat scandal has betrayed consumers trust in brands, the crisis is symbolic communications in the food and drink industry.
In any business, trust is the basis of brand and reputation. Scott Guthrie, marketing director of the Tayto Group, says, “You have to live up to the promise that you give and make sure that you’re delivering on that promise.”
In pharmaceuticals, trust may derive from a drug achieving its intended effect. In financial services, trust reflects quality of service. In the food and drink industry, trust is rooted in quality products and confidence in the supply chain; likely why UK retailers not implicated in the horsemeat scandal attempted to prove to customers the quality of their products by communicating faith in their suppliers.

The supply chain extends from farming to transportation to storage, and everywhere in between. For that reason, Hubert Grealish, partner at MPERA and former head of brand communications at Diageo, says quality is a shared initiative between suppliers and large corporations, “We know that the lowest common denominator is where the weak spot is.”
Guthrie says, as a family-owned business, Tayto’s relationship with its suppliers is fundamental, “In our business, it’s about the personal relationship. If you look at the philosophy of this business, it’s about the family making a promise to its consumers. We have to be very mindful of what we’re giving to our consumers, and that’s an important message.”

Not all companies have such symbiotic relationships with their suppliers, however, as horsemeat has exposed. Hilary Ross, head of the food sector group at DWF, a law firm specialising in food and drink, says the communications between retailers and suppliers has been unregulated and inconsistent. “I think a lot of retailers realise that they had very good information and understanding of their immediate suppliers but might not understand where ingredients were coming from down the chain,” she says. “There’s an element of trust there that’s now gone.” Sam Gregory, MD of Tangerine B2B, agrees, “Brands are going to have to put effort in to build that trust back up. That is going to come through communications.”

One solution is to increase regulations within the chain and impose standards across the industry, a solution which public affairs consultancy Interel’s director general in France, Florence Maisel, says is not productive. The solution, she says, is transparency and communication.
Another means of addressing the inefficiencies in the supply chain is what British bottler and glassmaker Cobevco has done – integrate multiple services into one offer. The manufacturer addresses the inefficiencies in the supply chains by providing a one-stop-shop for foreign vintners seeking British distribution, eliminating collaboration with multiple suppliers, promising self-sufficiency and efficiency and promoting trust in the finished product.

Marketing director Fiacre O’Donnell says, “The whole concept behind the factory itself is that we can make the glass on site, store the bottles on site, fill the containers, put them in warehouses under bonded storage and transport those pallets down the road to market. The whole idea, cost and environmental impact has been lessened.” By streamlining the process, links can be removed from the chain, leading to increased efficiency and fewer opportunities for weakness to permeate.

Effective communication and trust in the supply chain is the foundation upon which reputation is built in the food and drink industry. “It all comes down to communication,” associate director of health and public affairs at Fishburn Hedges, Holly Rouse, says. “It comes down to what relationship that you actually have with your suppliers.”

Building on that foundation, food and drink companies must also address the cross-cutting and overlapping legislation, regulations and cultural differences that govern the industry.

The food and drink industry is one of, if not the most, regulated. Many cite the industry’s emotive quality as a driver for intense media and public interest in the goings-on of companies in that space. In Britain, a history of packaging and food safety issues has led to somewhat strict oversight and heightened scrutiny on the part of the media. The mad cow crisis of last decade and the issues surrounding accurate labeling of products – á la Danone – contribute to those phenomena.

Grealish points to horsemeat as the latest in a long history of food regulation issues stemming from low standards in the supply chain. In fact, the latest scandalous news from the industry is that nearly one-third of fish entering British markets is mislabeled and of a poorer than expected quality.

Regulation – of labeling, of safety, of quality – has been both implemented and explored in response to communications issues within the supply chain. But, Grealish says regulation is only effective when companies adhere to quality standards. He says rules and regulations must be easily understood by suppliers and retailers alike, “You can’t regulate for good behaviour, as in good parenting. More regulation may actually make it harder to implement all those rules and regulations. It has to be practical and pragmatic.” Regulation directly influences quality and confidence throughout the chain.

In Britain, regulation of the food industry is a blend of legislation and voluntary standards. The drinks sector is different, however. Nine of the largest British drinks companies sponsor the Portman Group, which regulates the industry via a code of ethics that all drinks producers and licensees must adhere to alongside an independent regulatory body, both of which regulate alcohol marketing. Sarah Hanratty, head of communications at the Portman Group, says, “It is in every drinks producer’s interest to ensure that we have a sustainable and responsible industry. Nobody wants to be regulated by government because it’s more costly, it takes longer and it costs tax payers more. We have a clever, effective, independent and relatively transparent system

The opt-in style code of ethics guarantees quality marketing and quality products, thus ensuring retailers’ and consumers’ trust in both the product and the brand.

There is industry-wide consensus on at communications are key to building trust in the supply chain and that attention to producing quality foodstuffs is on par with attention to safety. Ross says food and drink lawyers are already responding to the horsemeat scandal by redrafting companies’ contracts with suppliers to both enhance transparency and to ensure quality throughout the chain.

While regulations are important, however, reputation is built on an additional framework of safety, confidence and quality. “Reputation is almost beyond laws and regulations, Rouse says. “Laws and regulations are there to ensure the safety of a product, but reputation is about how the product was made, who made it and where it was made and all those more complex questions that aren’t regulated for but have a reptuational standpoint from the multitude of stakeholders.”

Alongside institutional checks, food and drink companies must also adhere to cultural influences. Guinness, for one, uses a number of different recipes in different regions around the world in order to cater to local tastes. In Nigeria, barley is banned, forcing Guinness to brew its signature stout with sorghum, a grass-like cereal crop. Southern Comfort’s entrée into the British market tapped into one of Britain’s greatest pastimes – talking about the weather – with a nude, slightly rude weatherman.

Tayto’s Golden Wonder brand, which has a long heritage in Britain, but is being reintroduced by an Irish company, launched an awareness campaign driven by its crisp packet colouring differing from the now more-established Walker’s tableau. Though only the Irish Sea separates the two countries, in food culture, that may be an insurmountable chasm if a company does not communicate effectively.

Gregory says a brand must establish its place within local culture prior to expansion, “A company must understand how its offer fits within that and engage the target audiences as well as possible to create brand loyalty.

Culturally, many European consumers had little problem with horsemeat itself. The crisis has galloped across Europe leaving a wake of distrustful consumers and damaged supply chains in its wake. Yet, the industry has responded by engaging another of the areas in which it has a unique stake – politics.

The food and drink industry, likely because it is intrinsically tied to local values, consumers and economies, has a long history of both participation in and cooperation with government. Some countries, like Ireland, have dedicated bodies through which to regulate and communicate. While the An Bord Bia is not unique, it is uncommon among EU countries, many of which – including those from where the horsemeat originated – rely on EU legislation to provide industry standards.

Alongside institutional bodies lie trade unions and lobbying organisations that work within politics on behalf of the food and drink industry.
In Britain, trade unions, lik the Society of Independent Brewers, are the primary actors for drinks companies as few are large enough to carry the political clout that Sainsbury’s or Tesco has in Westminster. Rouse says this helped the beer lobby prevent the taxation of beer and win a major battle in the form of one penny a pint. Grealish says that this relationship can become beneficial for all links in the chain, “We need a very simple, clearly articulated version of the regulations that everyone can buy into. Government should look to business as a partner.

The confluence of business and politics is the premier level of influence on reputation in the industry. Beneath that lies brand management and attention to local customs. Beyond that are the rules and regulations that structure, standardise and oversee an emotive and complex industry

But at the core of the industry lies the supply chain.

The chain in which communications must be transparent, the chain that determines corporate trust in its products and consumer trust in a brand, the chain that ensures quality. Or delivers crisis.

Despite the horsemeat crisis shattering both trust and confidence in the supply chain, the way forward can be forged through a joint effort of business, government and suppliers. “If you do a good job in quality and confidence you tend to tick all the boxes of regulators and you tick all the boxes of your customers too.

Regulation can actually help us collectively weed out the charlatan from the true heroes,” Grealish says.

Confidence in the supply chain is tantamount to reputation. That confidence derives directly from quality and transparency throughout the chain. After all, the food and drink industry’s reputation is only as strong as its weakest link.

Source :  http://www.communicatemagazine.co.uk

The digital revolution is in full swing in the UK and it is clear that online shopping is having a huge impact on the logistics sector.

People are now purchasing items from their laptops and mobile devices and companies are under increasing pressure to get these goods delivered as swiftly as possible.

This is obviously putting a lot of strain on supply chains and firms that are slow to embrace e-commerce or have limited warehouse space to keep their products will ultimately fall behind their rivals.

On announcing its latest financial figures, UK Mail – a major parcel distributor – confirmed the industry is undergoing some “fundamental changes”.

The organisation performed well in the 12 months to the end of March 31st – particularly in the second half of the year – and chief executive officer of the firm Guy Buswell thinks UK Mail is in a solid position to cope with the evolving market.

“Today’s results demonstrate that our business model has the inherent strength to adapt to this changing market and grasp the opportunities that exist,” he remarked.

Some experts fear the e-commerce boom will lead to a significant shortage of sizeable distribution centres in the next decade.

As part of their employee development programme for the business, Cold Move’s participation in the FSDF Pathway Qualification Programme recently resulted in 29 of their staff receiving a national qualification in Warehousing and Storage Operations that is accredited by both City and Guilds and Skills for Logistics.

The bespoke programme, which ran over several months, was designed to reinforce Cold Move’s internal operating procedures whilst at the same time recognising this in the form of a formal qualification.  The focus of the programme was to evaluate competence and their ability to consistently deliver the required level of performance within Cold Move’s warehouse operations in support of the company’s commitment to the delivery of high levels of service to its customers.

 

Pictured at the presentation ceremony on 12th April are some the successful candidates from the Oswestry and Golborne sites along with James Woodward, Cold Move’s Managing Director, Chris Sturman CEO of the FSDF and Simon Williams from Cold Move.  Simon and his colleague Alistair Mitchell assisted with the training and obtained a qualification as an assessor for the programme.

Speaking at the award ceremony James Woodward said “the programme has been extremely successful and has been well received by all our employees who participated in the initiative”.  He also thanked the FSDF team for their excellent support throughout the entire programme.

In his reply the FSDF’s CEO, Chris Sturman congratulated everyone at Cold Move for supporting the Pathway initiative and those people who had successfully gained their award.

He went on to explain that FSDF Pathway Qualifications are quickly establishing the benchmark against which operational managers and operatives working in the food and drink logistics supply chain can be measured.  They also provide employers such as Cold Move with a vocational training and skills programme that is aligned to their own operations and gives them the reassurance that their employees have the skills, knowledge and competence to underpin the business’s strategic plans and objectives in the future.

Developed by senior professionals with many years’ of expertise in food logistics the FSDF Pathway Programme has been endorsed by Skills for Logistics and the National Skills Academy for Logistics and has been carefully designed to fit alongside the Skills for Logistics Virtual Stairway and the Modern Logistics Guild.  In addition the Pathway Programme also sits alongside the Manufacturing Excellence qualifications of Improve, the National Skills Academy for Food Manufacturing.  Today there is a bespoke vocational training and skills programme available to meet the needs of all companies with employees who are working in a logistics function within the food and drink sector that focuses on and addresses the special product care and consistency of quality management necessary to ensure the safety of the consumer.

Currently, a number of Cold Move’s employees are enrolled on a similar programme covering transport office skills which they are due to complete in about three months’ time.

The Pathway Programme at Cold Move was designed and implemented for the FSDF by Maurice Young Consulting.

Fuel prices may be dropping, but fleet operators must still ensure they train their employees to drive as economically as possible.

The cost of wholesale fuel has fallen in the past few weeks and experts believe this will soon be reflected in prices at the pumps, but that certainly does not mean motorists can afford to be wasteful.

David Williams – chief executive officer at GEM Motoring Assist – said it is always practical to follow fuel-efficient driving tips.

In fact, the organisation said that by taking heed of certain tips, companies can cut their fuel wastage by up to 50 per cent.

Logistics firms should ensure the engines in their vehicles are as efficient as possible and that tyres are in good order.

Basic measures such as turning the air conditioning down and planning ahead to avoid road works can also save businesses a surprising amount of money.

Although UK-based logistics enterprises appear to be growing in confidence, they are still at a disadvantage against their foreign rivals, who benefit from far cheaper diesel prices. This is largely down to the high duty rates charged in Britain.

The horrific explosion at a West, Texas fertilizer plant last Wednesday came from a more unlikely source than you might think.  The chemical stored there is not generally considered as much of a fire or explosion risk as other nitrogen-based fertilizers.  But under certain conditions, what’s been thought of as a safe chemical can turn deadly.

According to reports the fertilizer company had as much as 54,000 pounds (circa 24,500 Kilogrammes) of anhydrous ammonia at its facility.  The company noted in an emergency planning report that this kind of fertilizer is not considered an explosion risk in its gaseous form, though it can sometimes explode if kept contained at certain concentrations.

Some news outlets covering the explosion have been conflating anhydrous ammonia with a different kind of fertilizer called ammonium nitrate. But they’re completely different chemicals.

Anhydrous ammonia is made from three parts hydrogen to one part nitrogen. The “anhydrous” part of the name refers to the fact that there’s no water involved in the reaction that makes it.  Ammonia was initially produced to make explosives but was repurposed as a fertilizer after World War I.  Adding it to soil contributes nitrogen, a vital component needed for plant growth.

As a fertilizer, anhydrous ammonia is stored in tanks as a liquid under pressure — without the added pressure, it would quickly boil into a gas — and transported via pipeline, truck, or rail.

Anhydrous ammonia is considered safer to store in large quantities, because it takes extremely high temperatures to set it off.  But it’s not totally harmless.  Direct exposure to anhydrous ammonia can be seriously harmful, causing eye and skin irritation, respiratory problems and, at the right  concentrations, death.

Leaks of gaseous anhydrous ammonia are also dangerous.  Because the vapours hug the ground initially, the chances for humans to be exposed are greater than with other gases.

Ammonium nitrate, a combination of nitrogen, hydrogen and oxygen, is a lot more volatile, prone to combustion and reaction, thanks to the fact that it is a strong oxidant. (Anhydrous ammonia can be converted to ammonium nitrate using nitric acid.)

So what caused the explosion at the West plant…?   City University of New York physicist Michio Kaku told CBS News that the water firemen were using to fight a routine fire may have set off a chain reaction of explosions.

“The [US Environmental Protection Agency] regulations say it’s OK to have this amount of material, because nothing’s going to happen, but there’s a rare sequence of events, the right pressure, temperature and right amount of water will set off anhydrous ammonia,” Kaku told CBS.

There’s still the question of what set off the initial fire — whether the company also stored some ammonium nitrate or whether there was some other source of combustion. The next few weeks of investigation may provide answers.

More speculative warehouse building is required in the UK, especially in the south-east of England, it has been claimed.

Jones Lang LaSalle has completed its latest Industrial Property Trends report, which suggested that 744,000 square feet of logistics space is currently being erected by developers across the country, but this is not likely to be enough.

“With availability continuing on a downward trend, and much of the supply being in poorer quality units, there are shortages of good quality space in many locations,” commented Tim Johnson of Jones Lang LaSalle’s UK Industrial & Logistics team.

He added that there is particularly strong demand for large-scale units in and around London.

It is not just the UK-based firms that are struggling to find suitable distribution centres at the moment, as a previous report by Jones Lang LaSalle showed that European companies could require up to 25 million square metres of extra space over the next five years to cater for growing demand.

It may be obvious that companies with high levels of competency throughout their organisation are better performers in the medium to long term and deal more effectively with change.

The same observation applies to competency in both risk and safety management. Organisations that commit to understanding and managing the risk to their business, their employees and the public, are much better equipped to prevent unplanned events occurring and to recover from disruptions if something does go wrong.

Despite the relentless drive of new technology, all businesses are managed by people, and it is the competency of individuals to carry out their tasks and to act in unison with others, that provides inherent risk management and resilience for so many companies.

In successful companies, risk and safety management is a continuous process which is part of day-to-day management activities. But there is not a “one size fits all” solution. In implementing an effective approach to risk and safety management, organisational, industrial and national cultures also need to be taken into account.

Competency in risk analysis

At the heart of good safety and risk management is Risk Analysis – the process of identifying and assessing credible risks (to the business, its people, its processes, the environment, etc.). Without a clear understanding of the risks faced, the implementation of appropriate risk control measures is not possible.

Essential to all good quality risk analysis is competent people: people with specific knowledge of the business and its dependencies, and those with the skills to assimilate and analyse information and draw conclusions. It is important to appreciate that risk analysis provides a “snap-shot” and is constrained by the knowledge and experience of the participants and the availability of information.

Outputs from the risk analysis are the credible risks that the business faces, together with the required (existing or not) controls or safeguards that reduce risks to an acceptable level.

Competency in preventing loss of control

The business may decide that additional controls are warranted to reduce risk levels to meet company standards, industry best practice or legislative requirements. For ease of understanding, controls can be categorised into ‘operational’ or ‘engineered’. Operational controls are those which are directly operated by people, whereas engineered controls are active or passive systems which operate without direct intervention by people.

In order to ensure continuous risk management, it is of course vital that these controls are maintained. For operational controls this is achieved by ensuring that operators remain competent to carry out their tasks. Their competency will be supported by ongoing training and assessment and it is particularly important that new operational staff members are also competent.

Engineered controls require regular maintenance and it is essential that the maintenance is carried out by competent people. Where systems must be taken out of service for maintenance, it is critical that they are reinstated properly. Periodic checks of safeguards may be appropriate to ensure their ongoing availability.

Competency in recovering from unplanned events

The risk analysis provides a clear understanding of how events could, if not managed, develop into serious problems. The organisation has the opportunity to plan for these “nightmare” scenarios and ensure that competency requirements of personnel to respond to such scenarios are captured.

One of the more difficult challenges for organisations is to decide on how rigid their systems for managing risk should be. This will be influenced by the type of risks faced by the business and the culture of the organisation and the industry it operates in. Simplistically, for routine activities with high levels of maturity (i.e. changes are slow), operating procedures can be relatively prescriptive.

However, the tendency is for additional procedures or instructions to be added which, over time can result in bureaucratic systems. For non-routine or unplanned events, experience may be limited and there are dangers associated with introducing overly prescriptive controls which may not be adequate to deal with such events. In these circumstances, there is benefit in relying on competent people to manage the situation within a set of guidelines.

The benefits of competency

For organisations with a strong focus on competency there is a major benefit that is often not clearly recognised. Competent organisations are well equipped to deal with both routine and non-routine events which, if not managed properly, could escalate to become much more serious with significant detrimental impacts on the business.

In today’s highly competitive environment, where there is a constant pressure for businesses to become leaner, much of the traditional in-built redundancy and replication has been removed. Whilst this improves short-term business performance, the resistance to unplanned events can be compromised. By investing in their people, and focusing on the competency to carry out both routine and non-routine tasks, companies can build in considerable resilience to the risks they face and thus better prevent, deal with and recover from adversity.

Just as human error (lack of competence) is a major contributor to accidents, so too is human ingenuity (competence) a major contributor to loss prevention.

Rabobank has published a new research report looking at the current food and agriculture (F&A) supply chain, identifying flaws that leave the sector ill equipped to respond to new complexities, and calling on the industry to transform the way supply chains are organized. Specifically, Rabobank identifies a dedicated supply chain model as the best step for F&A companies to take, and recommends the adoption of longer-term supply agreements and cooperative relationships with upstream and downstream partners.

In the report authored by Rabobank’s global Food & Agribusiness Research and Advisory, the bank’s analysts look at how the operating environment for F&A companies is becoming increasingly complex, as new external influences compound traditional pressures such as rising agri commodity prices. Rabobank says that the dedicated supply chain model has potential to revolutionize the F&A industry, by making it more productive, innovative, safe and sustainable. The bank’s report stresses that all of these outcomes are vital if the sector is to deliver food security to a future global population of 9 billion.

Limitations of the current structure

Rabobank says that traditional pressures on the F&A industry (supply and demand dynamics, a burgeoning population, and rising agri commodity prices) are being compounded by a new set of external influences. The direct use of agri commodities for biofuel production and an increased awareness of the energy intensity of food production, for example, have embroiled F&A companies in an ongoing food vs. fuel debate. Similarly, speculation in agri commodity markets and the regulatory responses this has triggered from governments worldwide have added to the complexity of the environment in which the F&A sector operates.

These new pressures also serve to exacerbate the flaws in the current supply chain model, Rabobank says. The dominant supply chain model is currently structured in a linear fashion, in which suppliers, processors and retailers form short-term partnerships independent from the influence and interests of other members of the chain. This model is highly inefficient, restricting F&A companies’ ability to respond to changes in supply and demand dynamics, while fleeting partnerships limit productivity and restrict innovation. This system also results in wasteful processes that cause more environmental degradation than is necessary.

Adding value through closer cooperation

Rabobank believes that switching to a new supply chain model – the dedicated supply chain – has the potential to transform the F&A industry. In a dedicated supply chain structure, upstream suppliers and processors enter into long-term partnerships with each other and a downstream chain leader. Crucially, information and insights are shared along the chain’s length for the benefit of all members.

Justin Sherrard, Rabobank Global Strategist, says “Closer cooperation of this sort will transform the nature of F&A partnerships from transactional ones that are centered around chasing price, to a system focused on creating value.”

The advantages of dedicated supply chains over the current system are manifold. Companies embracing this thinking will benefit in the following ways:

Reduced risk
Longer term, more stable agreements reduce exposure to price volatility, whilst shared insights will enable players to better react to market risks

Improved productivity
Better insights into chain requirements improve process efficiency and partners can also work together to finds ways to limit or reuse waste

Access to new markets
Better insights into downstream needs and opportunities can better inform product innovation and help companies to grow footprints in new markets

Enhanced brand and reputation
Companies with ambitious CSR targets can help their partners on other product attributes, such as sustainability

Improved access to capital
In addition to better cash flows and stronger credit ratings, members can access new financing models that provide leverage from chain partners

Longer term, more stable agreements reduce exposure to price Rabobank says that adopting the dedicated supply chain model positions F&A companies for longer-term growth, as the sector rises to meet the over-arching challenge to feed the world in coming decades.

Making the change

Rabobank’s report encourages the industry to abandon its preoccupation with short-term price spikes. Rabobank believes that a model based on chasing price is a narrow approach that will restrict the ability of F&A companies to realize their growth objectives in this more complex and demanding environment.

The report calls for prominent F&A brands to show leadership, through creating initiatives that will lead to closer cooperation between their upstream partners. The report cites several examples of leading F&A companies that are already active in this space, such as Mars’ decision to release the cocoa genome sequence into the public domain as part of its broader commitment to sustainably sourcing all cocoa purchases by 2020.

Furthermore, Rabobank believes that sector leaders undertaking such initiatives must become advocates for dedicated supply chains, by sharing their experiences with the wider industry.

Barry Parkin, Mars Global Chocolate Procurement and Sustainability Head, says, “Mars believes that closer cooperation, both up the supply chain with suppliers, origin governments and NGO’s, and across the supply chain with other manufacturers, is critical to achieving the cocoa industry’s growth and sustainability goals. Through Mars’ Sustainable Cocoa Initiative, we are actively engaging with all parties in an effort to drive a step change in farmers’ cocoa yield, which is the key to driving economic, social and environmental sustainability. We have already demonstrated with our partners up the supply chain that a 3-fold increase in yield is realistic and the challenge now is to roll this out to hundreds of thousands if not millions of small-holder cocoa farmers by the whole industry getting behind the same initiatives in multiple origins.”

Gilles Boumeester, Rabobank’s Global Head of Food & Agri Coverage, comments, “F&A financing institutions also have a role to play in creating an environment that is conducive to adopting this new model. To this end, Rabobank is developing new financing solutions that support and encourage companies embracing dedicated supply chain thinking.”

The Rabobank report on the food and agribusiness supply chain model is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture.

For more information visit www.rabobank.com/f&a