Ferrero recognises that deforestation and forest degradation is a critical issue of the global cocoa supply chain. Deforestation threatens to undermine the very resilience of the cocoa sector itself and with it the livelihoods of the millions of smallholders who depend on it. There is cocoa farming happening in High Conservation Value areas in West Africa, where farmers have been growing cocoa for many years.Ferrero signed the New York Declaration on Forests by the United Nations and endorsed the HCS Approach (HCSA), a methodology enabling companies to understand forest areas to be protected for their high carbon and biodiversity values.Additionally, Ferrero signed the Cocoa and Forests Initiative letter of intent in March 2017. This framework involves key industry members and is organised by the International Sustainability Unit, the World Cocoa Foundation and the Dutch Sustainable Trade Initiative. Its goal aims to develop an actionable suite of measures to end deforestation and forest degradation, such as investments in more sustainable forms of landscape management and more active partnerships to protect and restore forests in the cocoa landscape. Ferrero expects the Cocoa and Forests Initiative to commit to a clear cut off date by which industry will have implemented traceable sourcing to farm level. Furthermore, by 2018 Ferrero will have mapped 100% of its cocoa supply chain to farm-gate level (we are perfectly on track with our targets and today already over 50% is mapped). This allows us to identify areas of intervention such as reforestation and the distribution of local shadow trees. Moreover, we are working together with Airbus Defense and Space on a project, already successfully launched in our palm oil supply chain, that uses satellite maps to closely monitor land-use change over time.

The Ferrero Group’s approach to sustainability is currently based on the company’s social responsibility strategy: “Sharing values to create value”. For Ferrero, the creation of shared value is a practice that affects all stages of the supply chain: it goes from caring for the people who have made and continue to make the history of the Group, the support of local communities, the promotion of active lifestyles among youths and their families, all the way to its strong commitment to sustainable farming practices and safeguarding and protecting the environment. 

At Ferrero, customer focus isn't just a value, it's something we put into practice every day, based on a sense of responsibility that goes beyond commercial goals. This responsibility is made into reality through Ferrero's nutritional strategy, ongoing innovation, the quality and freshness of its products, food safety and responsible and transparent communication. In addition, Ferrero shows a constant interest in the lives of its current employees and former employees and people living in the communities in which it operates. This commitment is also demonstrated through the activities of the Ferrero Foundation and the Michele Ferrero Entrepreneurial Project, active in Africa and Asia. The Group also continues its commitment to the promotion of active lifestyles by addressing young people and their families through the global Kinder+Sport “Joy of moving” program.

Monitoring and improving the impact of its activities throughout the entire supply chain is a priority for the Ferrero Group, which it addresses by ensuring that its main raw materials are responsibly sourced. In addition, the Group is committed to production that respects the environment, by making use of the best technologies available, ensuring that the use of energy, materials and natural resources is efficient and by consuming water resources responsibly and reasonably. Acknowledging this responsibility, Ferrero is strongly committed to minimising its environmental impact, from raw materials to production plants and logistics, along the entire value chain.

Ferrero supports the notion that responsible commercial communications can assist consumers in making appropriate choices about food and beverage products, as well as in understanding the role of nutrition, diet and physical activity in order to achieve a globally healthy and active lifestyle. By conveying commercial communications consistent with the principles of good nutrition, balanced diet, physical activity and personal choice, industry can play an important role. Ferrero, individually as well as through the Associations to which it belongs (such as WFA, the World Federation of Advertisers, and IFBA, the International Food & Beverage Alliance), is an active player in the self-regulatory process at national, as well as international level.

The packaging consumption trend from 2009 to this reporting year highlights how the application of the Ferrero 5R strategy (Removal, Reduction, Recyclability, Reuse and Renewability) in the development/design phases has allowed the Group to limit the increase of packaging in despite of the growing production volumes. In fact, with only four of the main projects published in the previous reports, the Ferrero Group has spared about 9,000 metric tons of fossil fuel material.This has allowed the company to reduce at the lowest their waste: in the main European manufacturing sites, the Ferrero Group has activated a project called SPE (Scraps Packaging Evolution), aimed at developing the feasibility studies for the valorisation of discarded packaging in Ferrero production plants. The goal is substituting virgin materials in the Ferrero packaging and equipment with the highest possible amount of recycled material, in synergy with both Group suppliers and with the main consortiums for waste collection and recycling, with a perspective of shared responsibility

The main take away from the research I conducted while constructing this mind map is that Ferrero is actively working towards achieving sustainability through supply chain integration.The group integrated various sustainability initiatives in its supply chain, which are explained in the various sub-topic of the mind map, and grew the company through both vertical and horizontal integration. The step towards the digitalisation of the supply chain, also, is another example of how Ferrero is trying to maximise their operations while keeping it sustainable and lean.With a mission statement that advocate "sharing values to create value," the company set multiple sustainability goals for 2020, which also include the ability to control and being able to trace the supply of raw ingredients. Perhaps the company will try to digitalise its processes even more and might consider the introduction of blockchain for the last goal.

(2019). Retrieved 21 July 2019, from https://s3-eu-west-1.amazonaws.com/ferrero-static/globalcms/documenti/3482.pdfFerrero, R. (2019). Retrieved 21 July 2019, from https://www.ferrerocsr.com/planet/Store-and-DeliverFerrero, R. (2019). Ferrero - Corporate Social Responsibility. Retrieved 21 July 2019, from https://www.ferrero.com/social-responsibility/share-values-to-create-valueFerrero, R. (2019). Ferrero - Responsible Advertising and Communication. Retrieved 21 July 2019, from https://www.ferrero.com/social-responsibility/ferrero-advertising-and-marketing-principles/responsible-advertising-marketingFerrero, R. (2019). Report. Retrieved 21 July 2019, from https://www.ferrerocsr.com/our-csr-reports?lang=EN(2019). Retrieved 21 July 2019, from https://www.static.ferrero.com/globalcms/documenti/1614.pdfFerrero, R. (2019). Ferrero - Corporate Social Responsibility. Retrieved 21 July 2019, from https://www.ferrero.com/social-responsibility/share-values-to-create-valueFerrero: Sweetening the Supply Chain One Chocolate at a Time – Technology and Operations Management. (2019). Retrieved 21 July 2019, from https://digital.hbs.edu/platform-rctom/submission/ferrero-sweetening-the-supply-chain-one-chocolate-at-a-time/

Investing in digital technology is allowing Ferrero to better manage its complex procurement process.While product innovation remains critical, Ferrero has become more focused on better managing the complexity of its procurement process. Generally, the food business has particularly intricate supply chains with distinct silos due to the various ingredients necessary to produce a single food product. Companies, therefore, have to deal with numerous suppliers. Due to all the suppliers needed for the ingredients needed for the chocolate products, a complex supply chain can crumble if one supplier doesn’t deliver its services. It can become expensive and inefficient if the whole process is not handled effectively. Ferrero now recognises the value of and need for digital technology to create an integrated approach. Ferrero announced last month that it will implement SAP Ariba software to help manage costs and risks throughout its procurement practice. According to Jane Scott, Ferrero’s CIO, this is an “integrated platform on which we can consolidate all of our spend and collaborate with a global network of partners on everything from sourcing and orders through invoicing and payment”. Ferrero will use several cloud-based applications, including strategic sourcing, supplier risk, spend analysis, commerce automation, buying and invoicing, and supply chain collaboration. With the implementation of a digitised procurement system, Ferrero can maximise its efficiency and effectiveness, whereby enhancing the transparency and collaboration of the entire supply chain. Further, this platform allows more inputs to be linked, allowing improved decision-making, insights, and strategies.Long-term, Ferrero is focused on taking the digital technology now used in its procurement procedures to other parts of its supply chain and operations. The company recently set up an innovation lab at Cornell University’s technology campus to examine potential technological improvements to its systems and products.

Ferrero reconfirms its goal to source 100% sustainable cocoa before 2020 and under its Code of Business Conduct, Ferrero highlights its strong determination to contribute to the elimination of child labour, starting with its worst forms, and all of the forms of slavery, human trafficking, forced or compulsory and prison labour. Ferrero's Code of Business Conduct is based on the principles of the ILO's applicable Conventions. Read what Ferrero does to protect human rights along its cocoa supply chain. All Ferrero cocoa independently verified In the light of the need for transparency in the cocoa sector, and with the intent of laying forth a clear and ambitious objective, Ferrero wishes to announce its goal to achieve independent and credible third-party verification of the sourcing of all of its cocoa by 2020. This verification will aim to ensure, among other issues, that trafficking, the worst forms of child labour and forced adult labour, will be eradicated from the plantations that Ferrero source its cocoa from. 

A ‘green’ management of transports and warehousing has always been a priority for Ferrero. The Group has developed several programmes for the optimisation of the supply chain, with a particular attention on environmental sustainability.Reduction of the total kilometres travelled by Ferrero products and, contextually, increased of saturation of the transportation fleet: European-based transport through Germany, Belgium and United Kingdom with the 2WIN Double Deck truck allowed for a 37% increase in full-load transport, which, combined with a coordinated management of return trips (which can considerably reduce the number of empty trucks on the road), lead to a 33% reduction in CO2 emissions. The first phase of the optimisation of the European networks (transport and warehousing) reduced the mileage between production sites and warehouses in Poland, France, Germany and southern Europe. In a second phase, the Group is planning a 12% reduction of the volumes per km travelled by Ferrero’s primary transport, compared to FY 2012/2013.Identification of alternative means of transportation with lower environmental impact. In order to limit the consequences of road transport, Ferrero has, over the years, constantly increased the percentage of vehicles with Euro5 (or more recent) engines in France, Benelux, Italy and, since June 2012, in the United Kingdom. New initiatives are being implemented to promote alternative engines. In the United Kingdom, for example, the Group is assessing the bene!ts of the use of hybrid trucks (diesel / bio-gas). Development of energy saving initiatives in directly managed warehouses The substitution of the old lighting systems with energy efficient lighting is expected to lead to a 68% reduction in electricity consumption in China and a 20% reduction in France. In Germany, Ferrero experienced significant reductions by substituting the cooling systems in several warehouses and installing fast rolling doors which separate areas with different temperatures.