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irrigating grapes

General Mills, PepsiCo Target Suppliers’ Water Efficiency

irrigating grapesAlmost all of General Mills’ water use occurs in its supply chain as farmers around the world grow crops for the company’s food products.

“Ninety-nine percent of our water footprint is upstream of us,” General Mills chief sustainability officer Jerry Lynch said in an interview. “It is largely about how we grow food and use water to grow food. So it’s a really important piece of the pie — and with water you see the impact very quickly and clearly.”

This is part of the reason General Mills and a half-dozen other food and beverage giants yesterday announced commitments to work with thousands of growers in their global supply chains to reduce water use and pollution impacts. For General Mills, this includes developing water stewardship plans by 2025 for the company’s most material and at-risk watersheds globally and partnering with NGOs, farmers and other stakeholders on sustainable sourcing in high-risk water regions.

The seven companies — Diageo, General Mills, Hain Celestial, Hormel Foods, Kellogg, PepsiCo and WhiteWave Foods — are participants in the AgWater Challenge, an initiative organized by Ceres and World Wildlife Fund (WWF). As part of the challenge, companies must submit detailed sustainable sourcing and water stewardship plans meeting specific criteria. Ceres and WWF will evaluate and report on companies’ progress against their commitments in one year.

Failing to address water management poses major business risks. Agriculture accounts for 70 percent of the world’s freshwater use. And one-third of the world’s food is grown in areas of high water stress or competition.

While Lynch won’t put a dollar figure on General Mills’ water risk, the CDP (formerly Carbon Disclosure Project) has said a water supply shortfall represents a $63 trillion risk to business and communities by 2030. Food and beverage companies are already acutely aware of this risk as drought in California and India drives commodity prices up and threatens their business operations in water-scarce locations.

To address and mitigate agricultural water risks, these seven companies have made a series of commitments including:

  • PepsiCo will work with its agricultural suppliers to improve the water-use efficiency of its direct agricultural supply chain by 15 percent by 2025 (compared to 2015) in high-water-risk sourcing areas, including India and Mexico.
  • Hain Celestial is setting a new sustainable sourcing goal for key crops, including a commitment to strengthen water and fertilizer management practices of farmers in its ingredient and protein supply chains.
  • Hormel Foods will develop a comprehensive water stewardship policy, setting water management expectations that go beyond regulatory compliance for its major suppliers, contract animal growers and feed suppliers — a meat industry first.
  • WhiteWave Foods will develop a time-bound road map for agricultural water stewardship over the next 24 months that addresses shared water challenges facing key commodities such as dairy, soy, almonds and produce in areas of greatest water risk, including California.
  • Diageo, by 2020, will establish partnerships with farmers to develop sustainable agricultural supplies of key six raw materials, reaching 90 percent of raw materials purchased.
  • Kellogg has committed to responsibly source its global 10 priority ingredients (including rice, wheat, corn and sugar beets), by measuring continuous improvement for row crops through metrics focused on water, fertilizer use and other factors.

To be an AgWater Steward, the seven companies had to meet certain criteria in five areas of water stewardship, including setting time-bound and measurable commitments to reduce the water impacts associated with key agricultural commodities, implementing locally-relevant strategies to mitigate risk in agricultural areas where water is scarce or polluted, and supporting and incentivizing farmers to strengthen water stewardship practices.

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