Can we create fully sustainable and inclusive value chains?

Authors: Jana Rudnik (adelphi/SEED), Christian Pirzer (Endeva)

“Can we create fully sustainable and inclusive value chains?" This question was at the center of discussions at the morning Think and Drink networking event hosted by Endeva and adelphi in Berlin on November 20, 2015.

Can value chains be 100% sustainable and inclusive? What does that mean in practice for a company? Which measures need to be taken by businesses to influence the entire journey of a product, from sourcing to the point of sale, and what challenges have to be overcome? Endeva and adelphi invited entrepreneurs from various backgrounds to exchange their knowledge and best practices. Participating in the discussion were three social enterprises, Sustainable Harvest, Organic Africa and Berlin Organics, which presented their business concepts and shared their approaches to creating sustainable and inclusive products.

From coffee to Açai and Moringa, sustainable and inclusive sourcing is possible! While serving its delicious speciality coffee to the fellow participants, Sustainable Harvest gave insights into their long journey to establish themselves as a successful enterprise on the coffee market that adheres to values such as transparency, tractability, and inclusivity. Organic Africa, former SEED Winner of 2009, succeeded in expanding its product range to encompass oils like Baobab, various herbs and spices. The socially responsible enterprise lives up to the maxim of ensuring a fair trade and organically certified value chain. A frontrunner in superfood drinks, the social enterprise Berlin Organics, sources niche resources such as Açai or Moringa through direct trade and markets these products in Germany. The fellow participants enthusiastically tested the super food drinks – which earned very positive feedback.

Sustainable value chains need to be transparent, tractable and inclusive! From farming, to processing, retail and consumer integration - Each step of the value chain can ensure sustainability and inclusivity in its own way! Our participants located their strengths at different links of the value chain and could therefore offer complementary perspectives. The discussions centred on three main issues: certifications, partnerships and customer relations.

• Certification is critical but challenging for smallholders! Organic and fair trade certifications along the value chain are indispensable because they ensure that the consumer receives a 100% sustainable and fair product – or not? Discussions revealed that certifications actually pose a problem to many smallholders. Certifications are very expensive and often applicants need to fulfil additional criteria, such a certain size of staff, to receive them. In the end, many small scale farmers cannot afford to buy certifications and fear to lose their access to international markets. In addition, different types of certifications have been flooding the markets recently, posing new problems of accountability.

• Social enterprises need to find the right partners and go beyond certification! Preventing a ‘black box’ in the value chain for customers and finding the right and trustworthy partner is a challenge for any social enterprise. As experiences shared by the participants show, certifications are not the best solution to this problem. Instead of solely relying on them, social enterprises need to establish transparent and accountable supply chains and identify trustworthy supply chain partners that are regularly monitored.

• In addition to high quality, customers appreciate a relation to the product! In a market that is already saturated with seals that mark a product green and fairly produced, how can an enterprise explain the added value of their products to the consumer? With their Relationship Coffee Model, Sustainable Harvest created an approach where smallholder farmers see what happens with their coffee and customers get the chance to closely interact with the people that made their fresh start in the day possible.

Many general and individual solutions were discussed, accepted and discarded at the event. A large thank you is owed to the participants, who tackled these questions in lively debates and provided inspiration, optimism and renewed energy to meet the challenge of creating fully sustainable and inclusive value chains.