Sharing Value in the Food Industry: SharingValueAsia  

Contributed by Craig Hoy, Executive Director, PublicAffairsAsia

 

PublicAffairsAsia has recently announced the launch of the SharingValueAsia web portal and an upcoming report entitled "SharingValueAsia: Partnership in Action", which launches this Thursday. Much of the content is built on nominations from PublicAffairsAsia’s Gold Standards Awards, in which the food industry has always been a star performer. The food and beverage industry stands out among others as being at the cutting edge of developing partnerships and shared value initiatives. These programmes not only have a positive effect on corporate bottom lines, but also deliver positive social, economic and environmental impacts.

The report contains 17 case studies and, of that group, seven are related to the food and beverage sectors. From the outset of the report we were aware that in Asia’s emerging markets many companies, governments and NGOs still lack the essential shared valued templates that can be used to help solve problems and drive future growth. Based on our research, the food sector is stepping up to the challenge of driving partnership-based programmes in a wide range of circumstances.

Take, for example, Coca-Cola in Thailand. Between August and November 2011, the worst flooding for half a century affected 1.9 million households, five million people, millions of acres of farmland and 28,500 manufacturers. The impact on homes, communities, factories and public buildings was massive.

Coca-Cola donated $2 million to “Reunite to Relieve and Rebuild Thailand”, an initiative designed to provide emergency relief and assist rebuilding efforts. The Coca-Cola Foundation then worked with Habitat for Humanity Thailand to rebuild schools and homes and Coca-Cola Thailand worked in partnership with the Thai Red Cross and Habitat to mobilise groups of volunteers, set up and run mobile kitchens and deliver bottled water and food. It was an emergency response which showed resolve to make a difference, and is now a text-book example of how companies can make a difference in crisis scenarios.

The report also looks at more long-term partnership-based initiatives, such as Project Laser Beam, an innovative public-private partnership initiative bringing together global businesses, local companies, NGOs and the United Nations to tackle under-nutrition and its underlying causes. The partnership, which concluded this month, was led by the UN World Food Programme, Global Alliance for Improved Nutrition (GAIN) - a Geneva-based foundation, along with global food companies Unilever, Mondelēz International, and Royal DSM. It operated in Indonesia and Bangladesh and the initiative tackled child undernutrition by implementing both market- and non-market-based solutions. The ambition was to develop a partnership that is both sustainable and holistic and a full report will be released by the partners next month.

We also look at initiatives which seek to drive social impact without necessarily subscribing to the triple bottom line model which is central to the concept of creating shared value. In Vietnam we profile FrieslandCampina’s Den Dom Dom (Firefly Lantern) Study Encouragement Programme which is in line with the Dutch dairy group’s commitment to “being part of Vietnam” by creating and fostering educational opportunities for underprivileged children in remote areas. Den Dom Dom is focused on the construction and renovation of schools as well as by providing scholarships to ensure that schoolchildren are able to pursue their education without financial distress to their families. To date, the Den Dom Dom Programme has granted over 20,000 scholarships and built a total of 17 schools including building 12 new schools and classrooms in five schools in different provinces.

Two industry organisations which have fully embraced the concept of Creating Shared Value are prominently profiled in the report. In Japan Kirin Holdings, a leading food and drink company, was one of the region’s early adopters of the “Shared Value” model pioneered by Professor Michael E. Porter, co-founder of non-profit consultancy FSG. After meeting with Porter and investigating the concept, Kirin CEO Yoshinori Isozaki firmly embedded it into the company’s business strategy.

As a beverage company, Kirin was acutely aware of the potentially harmful effect that alcohol could have on society and therefore also sought to address social issues. It has introduced initiatives such as alcohol-free beer and restructured its supply chain to deliver environmental benefits along with cost savings. Through the creation of a special unit at the centre of the company, it has positioned “Shared Value” at its core and is working on a long-term business plan based on these fundamentals.

Kirin is an early-adopter of CSV among Asian corporations, but for decades Nestlé has been pioneering shared value: well before the concept came into existence. Established in 1961, Nestlé’s dairy factory in Moga has radically improved the local economy. It has become an engine of growth and an agency for change in the community. During a large part of its early years, it provided approximately 20 to 35 per cent of the municipality’s total income. It employs almost 100,000 people directly and indirectly. Nestlé’s community engagement programmes, an integral part of the factory’s operations over five decades, have polished its reputation and given it a social prestige that has won it the loyalty of Punjab’s dairy producers. Along with a transparent and efficient payment system, this ensures that Nestlé has an assured supply of quality milk for its factory, allowing it to remain the market leader in the face of growing competition. At the same time, farmers have improved their occupational flexibility and mobility through the acquisition of transferable skills. Nestlé’s programmes have improved gender representation within the dairy industry through female empowerment initiatives and provided educational, water and nutrition. This is certainly partnership in action.

There appears to be no central reason as to why the food and beverage industry is driving innovation in partnership and corporate citizenship. But as the report shows the industry is certainly at the cutting edge and yields up a wide range of case studies from which other sectors can learn.

As an important footnote, the industry’s achievements will also be profiled at next month’s SharingValueAsia Summit in Singapore, where FIA is our industry sponsor and where a wide range of companies, not-for-profits and government-related bodies will debate the theme of “The Era of Empowerment”. With a special session, supported by FIA, dedicated to creating partnerships and driving effective engagement between partners, there’s certain to be more to learn about how the food industry is driving change while developing its core business here in Asia Pacific. We do hope you can join this innovative conference.

  • For more on SharingValue.Asia visit the website
  • To register to receive the report SharingValueAsia: Partnership in Action, please click here
  • To view the agenda for the SharingValueAsia Summit taking place at The Fullerton Hotel on October 9, please click here


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