Colruyt Group and Rikolto: drawing lessons from 15 years of collaboration

Colruyt Group and Rikolto: drawing lessons from 15 years of collaboration

04/09/2020
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Jelle Goossens
Jelle Goossens
Communications officer
0485/08.29.60 | 016/74.50.33

Our first steps in building trustworthy relationships between farmers and food companies date back 15 years, to the start of our collaboration with the Belgian retailer Colruyt. The collaboration was focused on learning together and making supply chains of products in Colruyt’s stores fairer, more transparent, and more environmentally friendly. In the coming weeks, we will be looking back at the history of what - certainly at the time - started as an unusual partnership.

In 2005, after some small collaborations in Flores, Indonesia and Benin (2004-2006), our former director Jan Aertsen entered the boardroom of Colruyt Group. He made a confession there and said that we were stuck. For many years, Rikolto (then VECO) had been active in developing countries, training farmers and organising them into farmers' organisations to access markets collectively.

But the world was globalising at a rapid pace, with food markets leading the way. For small-scale farmers in developing countries, access to an increasingly demanding market in terms of quality and hygiene standards was more like a distant dream. And in their country’s markets, they had to compete with imported products that were usually cheaper and/or of higher quality.

"How do we take this to the next level?' was the question Rikolto was struggling with. "How do we ensure that farming families have access to these demanding markets on good terms?

Self-doubt

Within the realm of development cooperation, these questions remained unanswered. But if there is anyone who knew the requirements of the market and how to bring a product to the customer, it is a retailer. Rikolto's honest self-doubt inspired a spark in Colruyt Group’s board room, because they too were faced with tough issues in their supply chains. These were questions that they, as a retailer, could not find an answer to on their own.

At Colruyt Group, sustainable entrepreneurship has been a part of their DNA. They started the social auditing of toys back in 2000, after it turned out that there was a lot of child labour in production. But really combating child labour turned out to be more complex than imposing a simple ban. Eliminating the structural causes required a long-term vision to improve living conditions and social opportunities in the producing countries.

That’s how Colruyt Group started getting the idea to provide young people with growth opportunities by, among other things, setting up training projects for them. The Collibri Foundation was set up for this purpose. The foundation has been investing in various training and education programmes for young people since 2002. The first "value chain projects" in which Rikolto and Colruyt Group collaborated, grew out of these training projects.

Every product on our shelves is an opportunity to have a positive impact on everyone involved in the chain.

Mieke Vercaeren Head unit sustainable products, Colruyt Group

What is the main lever?

As such, Collibri Foundation gave an incredible experience to hundreds of young people. But the biggest lever remained largely untouched at that time: the core business of Colruyt Group. "Every product on our shelves is an opportunity to have a positive impact on everyone involved in the chain," says Mieke Vercaeren of Colruyt Group. "By creating transparency in your supply chains and working directly with producers in the longer term, you can provide structural answers to child labour, poverty, deforestation, environmental pollution, etc." adds Jan Wyckaert, director of Rikolto in Belgium.

The theory sounded clear and convincing ... but it had not yet been put into practice. From a shared pioneering spirit, the two organisations decided to build up practical knowledge in so-called value chain projects. Colruyt Group realised that its Private Label brands such as Boni, Spar, and Graindor offered an enormous opportunity to start an upward spiral.

In these value chain projects, all chain partners, from producer to retailer, cooperate closely. Long-term cooperation and win-win solutions are central to giving farmers in international supply chains better market access, improving the quality and sustainability of the product, and giving them leverage to improve living conditions. At the same time, retailers bring a strong proposition to the customer because they are able to make sustainable consumption tangible.

For Colruyt Group, these chain projects have grown into one out of three instruments outlined in its Sustainable Sourcing Policy, in addition to international sustainability standards and (own) specification sheets. "The chain projects are the most far-reaching in terms of dynamics within the company, also in terms of investment of resources", says Mieke Vercaeren. "Within a certain product category, they are iconic products for sustainability. They offer colleagues from different departments, from buyers to product group managers and brand managers, the opportunity to get to know the product and the producers behind it much better. The products combine craftsmanship with the greatest degree of transparency about production conditions. We strive for maximum positive impact on a social, ecological and economic level".

Meanwhile, 7 value chain projects are underway and 43 different products are being sold in the Colruyt Group shops, including Colruyt, Spar, and Bioplanet.

From rollercoasters to stable value chains

In order to strengthen the value chain projects, they are always coupled with a training project through Collibri Foundation, to give young people opportunities in the agricultural sector. "This way, a social investment via training and capacity building goes hand in hand with building a commercial value chain," explains Mieke Vercaeren. "The positive result is long-term socio-economic added value in the countries where the raw materials are produced.”

For Rikolto, these value chain projects provide an example of how a successful business model can contribute to making the agriculture and food sector more sustainable. "The chain projects provide inspiration and practical tools for companies in the retail and food industry to get down to work", says Jan Wyckaert.

The chain projects provide inspiration and practical tools for companies in the retail and food industry to get down to work.

Jan Wyckaert Director Rikolto in Belgium

Colruyt Group and Rikolto kicked off the first value chain project in 2006, looking at rice from Benin. In the years that followed, many other chains have been started up, alongside Rikolto, and also with other facilitators such as Trias, Enabel, Efico, the King Baudouin Foundation, Broederlijk Delen, and Solid. With varying degrees of success because such chain projects are never a 'walk in the park'. They are rather a rollercoaster in which new obstacles must be overcome each time to achieve a stable, reliable, and profitable chain.

We drew energy from the successes. From the failures, we always drew valuable lessons. This way, we also developed a methodology together, step by step, to improve the success rate of future projects.

In the coming weeks, we will share these lessons in a series of articles. The guiding principles are the six Inclusive Business principles. These are central to the LINK methodology of The International Centre for Tropical Agriculture (CIAT), which we use as a theoretical background for our collaborations.

6 principles that define inclusive and sustainable value chains

  1. Cooperation between all actors in the chain with a common goal;
  2. Close relations between all chain actors, leading to a stable market and constant supply;
  3. Fair and transparent agreements and policies (labour conditions, fair prices, good working conditions)
  4. Fair access to services, such as credit, technical support in the field, market information, etc.
  5. Inclusive innovation and co-creation: innovation driven by multi-actor collaboration
  6. Measuring results and outcomes; ongoing monitoring to optimise the value chain and follow up.

Source: LINK methodology (CIAT)

For each principle, we tell you how we try to translate it into practice in the various value chain projects.

We find it worthwhile to share our experiences with the outside world because we are convinced that they can increase the impact of the work we do. So, we hope that these articles inspire our readers to launch similar initiatives and we warmly invite you to collaborate with us.