Our supply chain
From the farmers who grow our raw materials to the businesses who make our packaging, we invite our suppliers to be our partners in providing locally and sustainably sourced materials which have a positive impact on the communities and environment in which we operate.
Around 30,000 direct suppliers from more than 100 countries provide us with the raw materials, expertise and other resources which help us make great brands. Many of those direct suppliers themselves have an extensive supply chain, connecting us with thousands more farmers and businesses.
This network of direct and indirect suppliers presents us with opportunities to form partnerships based on ethical, social, and environmental principles. We believe collaboration with our suppliers, other consumer goods companies, and industry associations like AIM‑PROGRESS, the Carbon Disclosure Project (CDP), and the Supplier Ethical Data Exchange (SEDEX), is the most effective means of improving practice in our supply chain and in the industry as a whole. While we engage with suppliers throughout our supply chain, our main focus is on working with those with whom we have the most immediate relationships.
Our work with suppliers is based on three core principles.
- Optimise due diligence: our due diligence processes are designed to help our suppliers improve their sustainability performance. While we have our own standards and guidelines, we also work with industry associations like AIM‑PROGRESS and SEDEX, which provide collaborative platforms for sharing supply chain ethical data in order to reduce duplication and the burden on shared suppliers.
- Build capability: when we can, we help suppliers meet our standards by offering training to build their skills and capabilities.
- Support local businesses: working with local suppliers is an important way in which we contribute to local economies, especially in high growth markets.
Managing our supply chain impacts
With a network as wide and diverse as ours, work with suppliers inevitably takes many forms. However, we focus on three key impact areas in our supply chain.
- Responsible sourcing: managing the social and ethical risks of our procurement.
- Sustainable agriculture and local sourcing: working with suppliers to ensure that our raw materials are produced sustainably, and, where possible, seeking suppliers local to our operations who can meet our procurement needs.
- Carbon reduction, sustainable packaging, and environmental management: managing the carbon footprint of our supply chain through collaborative initiatives like the CDP, setting robust targets for the sustainability of the packaging we use, and promoting environmental management standards in our supply chain are all important in reducing our overall impact. Our work in these areas is described in the water and environment section of this report.
What we buy
We source goods and services from a wide variety of businesses around the world, and our procurement systems depend on relationships with suppliers that are local, regional, and global. Alignment with our sustainability and responsibility standards, which include our Partnering with Suppliers standard, is among many factors we assess in choosing our suppliers, alongside cost, quality, and service.
The goods and services we buy include:
- Marketing materials – media, sponsorship and other materials that promote our brands at retail customers’ business sites and elsewhere
- Raw materials and utilities – including agricultural crops like barley, maize, sorghum, and sugar; and utilities, such as electricity and water used at our manufacturing sites and offices
- Information services and business support – including consultants, travel, and other support services
- Packaging materials – such as glass, paper, board, plastic, and aluminium
- Logistics – the services for distributing our materials and products around the world.
This year, in total we spent £6.5 billion on supplied goods and services, which included 1.9 million tonnes of agricultural raw materials like barley and maize, and approximately 1 million tonnes of packaging.
Where we buy
While we source these materials from around the world, we want to provide a sustainable market for local raw materials by stimulating the development of local supply chains. For example, in the United Kingdom and Ireland, our largest production region by volume, we source up to 90% of our cereal supply locally. In Africa, which is our largest region by production volume for beer, our ambition is to source 70% of all raw materials locally by 2015. Read more about our local sourcing programme in Africa.
Performance against target
|Target by 2015 ||2013 performance ||Achievement
|Source 70% of raw materials used in African operations from Africa
- Given that this number represents agricultural raw materials only, we are confident that, once we include all raw materials in our reporting, we will be on track to achieve our target.