Menu

Our drinks depend on a sustainable supply of high quality agricultural ingredients – including sugar beet and sugarcane, fruit juices, tea and coffee. Yet in many parts of the world, farming, agriculture, and biodiversity is under significant pressure due to population growth, increased demand for food products and the impacts of climate change.

Strategy

Embedding ethical working practices in our supply chain is a responsibility we take very seriously. This includes ensuring that our suppliers respect human rights and avoid any form of slavery, forced or child labour or human trafficking, in compliance with the UN Guiding Principles on Business and Human Rights. We also work to ensure our suppliers are working in a way that has a positive impact on society by supporting farmers and sustain local livelihoods.

Our action on supply chain supports UN Sustainable Development Goals 8 on Decent WorkGoal 10 on Reduced Inequalities and Goal 15 on Life on Land.

Collaboration will play a critical role in ensuring we can uphold our supply chain commitments. We will work together with a wide range of external partners to make a collective difference and support UN Sustainable Development Goal 17 - Partnership for the Goals.

Our drinks depend on a sustainable supply of high quality agricultural ingredients - including sugar beet and sugarcane, fruit juices, tea and coffee. Yet in many parts of the world, farming, agriculture, and biodiversity is under significant pressure due to population growth, increased demand for food products and the impacts of climate change.

As a key consumer of these ingredients, we have a responsibility to hold ourselves and our suppliers to the highest sourcing standards. As much of our purchasing, particularly of our key agricultural ingredients, is done together with other members of The Coca-Cola system, we have made a joint commitment with The Coca-Cola Company to ensure that 100% of our main agricultural ingredients and raw materials are sourced sustainably and responsibly by 2020.

We have set out what this means in Supplier Guiding Principles (SGPs), which applies to all of our suppliers, and Sustainable Agriculture Guiding Principles (SAGPs), which applies to our suppliers of key agricultural ingredients and raw materials. These are in line with The Coca-Cola Company's Supplier Guiding Principles, and Sustainable Agriculture Guiding Principles. The SGPs and SAGPs have been developed in partnership with industry bodies such as the Sustainable Agriculture Initiative (SAI), and are in line with all international recognised standards. These principles apply to all of our suppliers, and we have procedures in place to measure and monitor compliance.

 

Actions

We’ll make sure 100% of our main agricultural ingredients and raw materials come from sustainable sources by 2020.

Text

We’ll continue to embed sustainability, ethics and human rights into our supply chain.

Progress

  • of our 2017 spending with suppliers was covered by our Supplier Guiding Principles.

  • of our sugar suppliers are in compliance with our SAGPs.

Actions

Supplier Management

Who are your suppliers?

We source products from over 16,000 suppliers, and spent €5.2 million with them in 2017. Our procurement covers commodities and services such as ingredients, packaging, energy, capital equipment, building and facilities, fleet and logistics, sales and marketing, IT, telecoms, general administration and professional services. On average, 76.6% of our spend is with suppliers in our countries of origin.

We purchase the entire requirement of our concentrates and syrups for Coca-Cola trademark beverages from The Coca-Cola Company. Many of the purchases of our key agricultural ingredients, such as sugar and juices, are done together with The Coca-Cola Company, and other Coca-Cola bottlers. As a result, we address many of the issues that we face in our supply chain as a joint Coca-Cola system.

What sustainability standards do you expect your suppliers to adhere to?

All bottlers within the Coca-Cola system follow The Coca-Cola Company's Supplier Guiding Principles. These set out the minimum requirements we expect of our suppliers in areas such as workplace policies and practices, health and safety, human rights, environmental protection and business integrity. The Sustainable Agriculture Guiding Principles, developed by The Coca-Cola Company, define what is meant by sustainable sourcing and include standards that agricultural suppliers are expected to meet in terms of human and workplace rights, the environment and farm management systems. The SGPs and SAGPs also apply to suppliers for non-Coca-Cola Company brands that we produce and distribute, such as Capri-Sun and our energy brands.

We work with suppliers to build SGPs into all new contracts and into multi-year contracts as they renew. In addition, from 2017, we have built the SGPs into our purchase order process, so that even informal suppliers will need to comply with these requirements. Currently, 80% of our 2017 spending with tier 1 suppliers was covered by our SGPs.

How do you manage your critical suppliers?

Suppliers are broken into three tier levels based upon our internal segmentation – critical suppliers are identified and segmented based upon criteria including added value, supplier risk, and total spend.

Approximately 244 (1.5%) of our total supplier base make up 56% of our procurement spend – we identify this group as our critical tier 1 suppliers.  These critical suppliers are then segmented further. Of the 244 critical tier 1 suppliers evaluated, 47 (30% of our total spend) are identified as "gold" suppliers, based upon their high spend, and potential to add value, or a high supply risk; or both. Our silver suppliers represent 70 (16% of our total spend) of our core tier 1 suppliers, with the remaining 127 (11% of our total spend) at bronze level.

CCEP's most 'critical' suppliers are those direct suppliers which have the potential to directly impact our production (e.g., those which would result in a disruption to production if supply should fail). Risk levels are allocated to suppliers not only based upon their turnover, but also to aspects such as the uniqueness of the product/component/service they provide; or when our activities are intrinsically interlinked (e.g., our packaging suppliers). Therefore, even some relatively small suppliers could be deemed critical.

 

How do you manage and incentivise your suppliers?

CCEP’s Supplier Relationship Management (SRM) process provides a framework for evaluating our critical tier 1 suppliers’ performance, enabling their continuous improvement. In 2017, we consolidated the different SRM processes that existed from the businesses that made up CCEP, into a single, CCEP-wide SRM process for all of CCEP.

Under our SRM process, each supplier is given a score based on financial value, efficiency, innovation, risk and sustainability. The sustainability component of the score is rated by independent evaluation company EcoVadis. It evaluates suppliers against a number of sustainability criteria such as environment, carbon management, human rights and fair business practices.

Our procurement teams are key to this process, working with suppliers, identifying opportunities for improvement and building long-term relationships so that we can work together with our suppliers towards common objectives. We make sure every buyer is aware of CCEP’s expectations of suppliers, knows how to evaluate them under our Supplier Relationship Management (SRM) process and is familiar with the sustainability issues related to specific commodities.

We also commend suppliers on outstanding performance through our supplier summit and annual Supplier of the Year awards.

How do you work with suppliers to manage environmental issues?

Our Tier 1 suppliers are evaluated through annual Ecovadis evaluations, and a quarter of their score is directly related to their work on sustainability, and carbon reduction.  As the biggest impact to our value chain carbon footprint lies in our supply chain - in particular our ingredients (26%) and packaging (39%) - we monitor the carbon footprint of our PET, can and glass suppliers and we work with them to report and reduce their emissions.  We invest in recycled PET, and lightweight packaging, to reduce our value chain carbon footprint.  Carbon management is also included in audits for our Supplier Guiding Principles (SGPs), and the certifications for our Sustainable Agriculture Guiding Principles (SAGPs).  We also work with suppliers to invest in solutions in our distribution, cold drink equipment, and manufacturing equipment to help reduce the carbon footprint across our value chain.

Supplier risk

How do you assess supplier risk?

Supplier risk is assessed both at the initial sourcing phase, which includes evaluation on criteria including financial performance, value, innovation, as well as risk and sustainability. Supplier risk is assessed both at the initial sourcing phase, which includes evaluation on criteria including financial performance, value, innovation, as well as risk and sustainability.

We follow the principles of 7-step sourcing (7SS), which includes taking suppliers through a thorough selection process, with a Request for Information (RFI) being issued prior to creating a supplier shortlist. In addition to the usual commercial and technical information, the RFI also requests information on the potential supplier's sustainability strategy, compliance with the SGPs and/or SAGPs, as well as specific sustainability criteria related to their produce or service category. In addition, we also request a Credit Safe Report to validate the financial stability of each supplier.

We are also in the process of undertaking a commodity risk assessment, through independent evaluation company EcoVadis, an online document-based supplier assessment platform. This commodity risk assessment will identify supplier risk based upon commodity and source country. Based upon this initial risk assessment, high risk commodities and source countries are then further assessed, based upon the criticality to our business. Once this list is identified, we are able to identify where there may be any gaps in managing risk with our suppliers, and allows us to develop a supplier-specific action plan to mediate the risk.

Once selected, our critical suppliers are assessed through EcoVadis, and given a rating. EcoVadis evaluates suppliers through an supporting document-based questionnaire on four main areas: environment, labour practices & human rights, fair business practices and sustainable procurement. Supplier scorecards are provided to our procurement teams to assess performance and any risk areas. Our suppliers currently have average overall score of 58.1, and we aim for our suppliers to achieve an average overall score of 65 by 2025. Suppliers who have a low score are asked to develop an action plan and improve their performance. If suppliers do not improve their performance within the timeframe, they may not be used.  

Where do you source your ingredients from?

We source products from over 16,000 suppliers. Our procurement covers commodities and services such as ingredients, packaging, energy, capital equipment, building and facilities, fleet and logistics, sales and marketing, IT, telecoms, general administration and professional services. On average, 76.6% of the approximately €5.2 million spent in 2017, was with suppliers from within our countries of origin. In 2016, The Coca-Cola Company developed a public agricultural ingredients sourcing map, which provides information on 11 of The Coca-Cola Company’s top agricultural ingredients. This includes some of our suppliers of ingredients such as sugar cane and sugar beet.

Audit and compliance

How do you monitor and audit supplier compliance with your SGPs?

We expect our suppliers to develop and implement appropriate internal business processes to ensure compliance with the SGPs. Together with The Coca-Cola Company, we routinely verify compliance by using independent third parties to assess suppliers' compliance with the SGPs. As part of The Coca-Cola system, we have relied on independent audits commissioned by The Coca-Cola Company to monitor supplier compliance with the SGPs.

These audits include checks to ensure suppliers are not using child labour, forced labour, or any form of modern slavery, amongst the other covered areas of the SGPs. To date, the audits have covered over 95% of our suppliers of ingredients and primary packaging. These audits generally include confidential interviews with employees and on-site contract workers. The Coca-Cola Company guidelines require auditors to select employees from different production lines and duties within the facility, including those of different genders, ethnic or religious backgrounds, employees who are pregnant; union representatives If available, and contingent workers. For more information on the audit guidelines of The Coca-Cola Company, please see their Human Rights Report.

The Coca-Cola Company is a member of the AIM- PROGRESS forum, a global forum promoting responsible sourcing practices and the harmonisation of supplier audits as a way of reducing duplication and costs for suppliers. The SGPs have been benchmarked against other members protocols and are recognised by AIM-PROGRESS members through a framework called Mutual Recognition.

If a supplier fails to uphold any aspect of the SGP requirements, the supplier is expected to implement corrective actions. The Coca-Cola Company reserves the right to conduct unannounced audits at their discretion and to terminate an agreement with any supplier that cannot demonstrate that it is upholding the SGP requirements.

How do you track compliance with your SAGPs?

Together with The Coca-Cola Company, we work together with third party organisations, such The Rainforest Alliance, the Sustainable Agricultural Initiative Platform (SAI) and Bonsucro, to develop pathways to compliance for our main agricultural suppliers by 2020.

Beet sugar

Most of the sugar we use at CCEP comes from sugar beet grown in North West Europe and Spain. In partnership with The Coca-Cola Company, we offer several routes by which beet sugar suppliers can comply with the SAGPs and meet third-party standards.

Our preferred method is the SAI’s Farm Sustainability Assessment (FSA) whereby farmers can self-assess the sustainability of their agricultural practices against a range of environmental, social and economic indicators. Also applicable to other agricultural ingredients such as juices, the FSA provides farmers with the information they need to make their operations more sustainable. It also enables them to share their progress with customers and suppliers within their own supply chains. We intend that all our sugar beet suppliers should achieve compliance with the SAGPs through the FSA or similar programmes by 2020. In 2017, 83% of our sugar volumes are certified as compliant with our SAGPs.

Cane sugar

Cane sugar makes up a very small percentage of the sugar we buy. Through The Coca-Cola Company, there are several third-party standards under which a cane sugar supplier can be certified as meeting the SAGPs. These include the Rainforest Alliance Standard, Fairtrade and Bonsucro. Bonsucro certification is The Coca-Cola Company’s preferred method for sugarcane mills and growers to demonstrate compliance with the SAGPs. Coca-Cola worked with Bonsucro members to create the first global metric standard for sustainable sugarcane production and was the first to purchase Bonsucro certified sugar in 2011. The Coca-Cola Company also achieved Bonsucro Chain of Custody Standard certification, which enables the tracking of claims on the sustainable production of Bonsucro sugarcane and all sugarcane-derived products along the entire supply chain.

Coffee and Tea

We source tea and coffee for our HonestFuze tea and Chaqwa brands, and work with The Coca-Cola Company to ensure compliance with our SAGPs. In 2017, more than 95% of the sourced coffee and tea met The Coca-Cola Company’s required sustainable sourcing standards, with the majority adhering to the Company’s SAGPs. This means that Coca-Cola is purchasing these products from farm locations and suppliers that meet one of the following standards: Ethical Tea PartnershipRainforest AllianceUTZFairtradeSAI Platform4C*, or SAGP audit or validation.

 

Pulp and Paper

Pulp and paper are used in much of our packaging and point-of-sale material. Suppliers can attain a Sustainable Forest Management accreditation such as the Forest Stewardship Council (FSC) or a certification endorsed by the Programme for the Endorsement of Forest Certification (PEFC). The FSC-certified logo, or those from the PEFC, represent a global chain of custody system, supported by a chain of custody certification process and independent inspections. Every new paper, pulp and cardboard contract now includes a requirement for third-party certification and suppliers have until 2020 to comply. Card and board used for packaging makes up the majority of our pulp and paper, and in 2017, 94% of our cardboard for secondary and tertiary packaging suppliers were SAGP compliant.  We aim to expand reporting on this category to include additional areassuch as printed and point of sales material over the coming years.

Juices

For orange, lemon and apple juice, we’re working with The Coca-Cola Company, our juice suppliers and other third-party frameworks to establish programmes to ensure compliance with our SAGPs. In particular, we work with partners such as the SAI, in areas where we source some of our products, such as Spain, to improve the sustainability of our juice supply (see case study).

Human Rights

What is CCEP doing to improve human rights within its supply chain?

We consider human and workplace rights – as articulated in the United Nations’ Universal Declaration of Human Rights, and the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work – to be inviolable. Respect for human rights is fundamental to the sustainability of Coca-Cola European Partners and the communities in which we operate. We are committed to ensuring that all people are treated with dignity and respect. We support the 10 principles of the UN Global Compact, and take a proactive approach to respecting these rights in our workplace, in our supply chain, and in the communities in which we operate. These principles have been ingrained within CCEP’s Human Rights Policy.

We have a zero-tolerance approach to Modern Slavery of any kind within our operations and supply chain. Together with The Coca-Cola Company, we expressly prohibit any form of human trafficking within our system or by any company that directly supplies or provides services to our business. We prohibit the use of all forms of forced labour, including prison labour, indentured labour, bonded labour, military labour, slave labour and any form of human trafficking within our company and by any company that directly supplies or provides services to our business.

CCEP’s reviews risks annually through its compliance risk assessment process. During 2017, we expanded this process to also include the risk of modern slavery within our supply chain.

Our biggest potential exposure to modern slavery is within our key agricultural ingredient supply chains, and within the supply chains for some of our packaging materials. We are currently reviewing the risk for modern slavery, forced labour and child labour through an EcoVadis commodity assessment, and will be developing supplier-specific action plans based upon the assessment outcomes. We also track our suppliers' compliance with our SAGPs which includes prohibitions on modern slavery, forced labour, and child labour, through third party certification processes.

Has CCEP done a risk assessment on human rights issues down to the farm level?

We do not typically purchase ingredients, such as sugar, directly from farms, nor are we owners of farms or plantations. We recognise that as a major user of sugar and other agricultural ingredients, we must take action and use our influence to help end human rights abuses across our supply chain.

As part of The Coca-Cola system, we have relied on independent audits commissioned by The Coca-Cola Company to monitor supplier compliance with the SGPs and SAGPs. Together with third party organisations to assess compliance with the SAGPs, we are able to assess risks of modern slavery, child and forced labour.

Sourcing

Does CCEP source organic ingredients?

Over the past year, together with The Coca-Cola Company and other brand owners, we have broadened the range of options available to consumers, including organic products. Our Honest Tea, Honest Coffee, ViO BiO, and Capri-Sun Bio are a few of the organic options we offer, making up 0.3% of our total sales volume.

Where do you source your ingredients from?

We source products from over 16,000 suppliers. Our procurement covers commodities and services such as ingredients, packaging, energy, capital equipment, building and facilities, fleet and logistics, sales and marketing, IT, telecoms, general administration and professional services. On average, 76.6% of the approximately €5.2 million spent in 2017, was with suppliers from within our countries of origin. In 2016, The Coca-Cola Company developed a public agricultural ingredients sourcing map, which provides information on 11 of The Coca-Cola Company’s top agricultural ingredients. This includes some of our suppliers of ingredients such as sugar cane and sugar beet.

Our Stories

text

Sustainable citrus project

Spain

In 2014, we carried out a pilot project to test the viability of a range of sustainable practices on orange and lemon cultivation in Valencia. The study found that improving irrigation and fertilisation techniques would have the biggest impact, showing that it was possible to use up to 50% less water and 72% less fertiliser while producing the same quantity and quality of citrus crops.

Following the success of the pilot in 2017, we launched the Sustainable Citrus Project; a multi-stakeholder initiative to build on the findings and embed the practices among the citrus-farming community in Valencia. Launched in partnership with the Jaume I University of Castellón, the initiative involves around 25 farmers in the region. The initiative is expected to save around 77 million litres of water a year.

text

Beet sugar certification project

CCEP-wide

Working with The Coca-Cola Company in partnership with the SAI, we’ve been working on a cross-industry project to develop Europe’s first sustainable certification for beet sugar. The project will reduce the burden on suppliers by producing one standard certification for all beet suppliers across Europe. Many of CCEP’s sugar suppliers have been involved in developing the certification and piloting the process.