Coconut sourcing

We use coconut in many of our confectionery products. We buy coconut as oil, milk and in other forms.

Although we source our coconut from several countries, the bulk is from Asia (Sri Lanka, the Philippines and Indonesia), where coconut farming is largely smallholder driven.

The journey our coconut supply takes is wide-reaching, which can make it difficult to gain complete transparency. Over the years, we have strengthened our engagement with our supply chain partners to enable traceability of the materials we source to its origin. To drive industry-wide transparency, we publish the list of our coconut supply origins (pdf, 100Kb) in our supply chain.

Our approach to improving our coconut supply chain

Tackling risks and challenges in our coconut supply chain

We are at an early stage in tackling risks in our coconut supply chain, however, we have already mapped the key challenges across our coconut origins through location-specific assessments. The key challenges identified so far are:

• Dispersed and smallholder-driven supply chains, making traceability and farmer engagement more difficult
   
• Vulnerable livelihoods of smallholder landowners, related to:
  • Low yields and aging trees
  • Low incomes
  • Lack of information about markets
  • Informal or casual working arrangements
• Low productivity, caused by:
  • Aging trees
  • Limited technical knowledge (around good agricultural practices) and financial knowledge
  • Climate change and extreme weather events
• Safety of working conditions 

These challenges vary from one growing region to another, reinforcing the need for location-specific approaches developed together with local partners. Our goal is to ensure a continuous supply of coconut originating from sources aligned to our Responsible Sourcing Core Requirements, where farmers, workers and communities are safe and resilient.

Supporting Smallholder Livelihoods in the Philippines

In the Philippines, we have an ongoing program based on Proforest's ACRES framework: Agricultural Commodity Responsible Production and Sourcing that aims to address risks and improve coconut smallholder livelihoods in southern Mindanao, a key producing region.

Through several stakeholder consultation sessions in the form of workshops, we have engaged the farming community of a local cooperative to assess social and environmental risks in their coconut production. Following the risk assessment, a workshop, jointly organized with the cooperative, mill and refinery, was held to socialize the identified risks with stakeholders and prioritize actions to address the risks.

During the workshop, stakeholders, particularly farm owners, reiterated concerns about health and safety when working on farms as well as the lack of standardization on wages for farm workers. Despite fluctuations in market conditions and copra prices, farmer owners are required to manage the wages of their workers, often exacerbating low household incomes. On the other hand, farm workers expressed the need for increased awareness on legal minimum wage requirements and more formal wage arrangements, as opposed to current piece-rate payments with additional meal benefits.

In line with the prioritization outcomes, the program is working towards implementing legal literacy programs to help farmers and workers fully understand their rights, responsibilities and available support mechanisms, such as access to government services. Additional focus areas include providing regular training on agrochemical handling, improved access to climate-suitable personal protective equipment and engagements with local labor and agricultural authorities to promote fair compensation and compliance to minimum wage guidelines.

Promoting Safety and Good Agricultural Practices in Sri Lanka

We have been working closely with our partner, Proforest, to engage with our coconut milk suppliers and farming communities from the country’s major coconut-growing districts (Kurunegala, Puttalam, and Gampaha), collectively known as Sri Lanka's 'Coconut Triangle'.

Through a series of on-ground engagements with mills, traders, farm owners and workers, we have built a clear understanding of the opportunities and challenges faced by various stakeholders with respect to salient environmental and social topics.

We learned that most mills source coconuts from traders and large farms (known as estates). Typically, estate owners or farmers sell the coconuts to dealers, who process the coconuts by de-husking and transport the de-husked nuts to mill. The engagements highlight the high variability in the supply chain between farms and mills, where coconuts are sourced opportunistically by traders, complicating traceability efforts. We also identified opportunities for reinforcing good agricultural practices and farm safety, particularly around agrochemical management and disposal. We learned of the extensive efforts by local governmental agencies in supporting farmers and aim to advance on the identified opportunities by supporting these existing initiatives.

Collaborating with others to build a resilient coconut sector

We partner throughout our supply chain and with industry-wide coalitions. We are part of the Sustainable Coconut Partnership (SCP), which is a global platform for coconut sustainability and a multi-stakeholder initiative aiming to build a responsible and resilient coconut sector. The Sustainable Coconut Partnership evolved from a 2019 initiative, the Roundtable on Sustainable Coconut.

We have been an active participant of the SCP and continue to serve as a Steering Committee member since the inception of the SCP in 2023. Among the key topics we champion through the SCP are improving farmers' livelihoods, fostering more transparent supply chains and managing the impacts of climate change on the coconut sector.

Our commitment to collaborative action is further demonstrated through pioneering origin pilots of the Sustainable Coconut Partnership's Assurance System a standard designed specifically for the coconut sector to promote shared responsibility across the supply chain. We conducted two verification pilots in our coconut supply chains to drive responsible and resilient coconut production through a continuous improvement approach. The learnings from these pilots were shared with the wider SCP membership community to support the calibration and finalization of the Assurance System.