LONDON – Unilever uses a combination of advanced satellite imagery and geolocation data to understand exactly where some of its raw materials come from for its products, which range from Ben & Jerry's ice cream to Ax deodorant.
According to Marc Engel, the company's chief supply chain officer, it has historically been difficult for the company and other multinational companies to trace the exact origin of these ingredients on each farm or field.
"If you look at these supply chains traditionally, they are very long and very opaque … they are at the end when you consume your cup of tea or wash your hair with Dove or eat a Ben & Jerry's, you are at End of that chain. And at the beginning of the chain is usually a farmer or a company that uses the land. And there are a number of parties in between, "Engel told CNBC over the phone.
Palm oil, an ingredient in food products from biscuits to shampoo, has become a hot topic because of the risk of deforestation, which involves cutting trees to make way for more lucrative oil palm plantations. Unilever has stated that it will "achieve a deforestation-free supply chain by 2023".
In 2018, Unilever released details of its palm oil suppliers, refineries and mills and, like other manufacturers, had relied on third-party verification to certify sustainable sourcing for the company and other raw materials such as cocoa to confirm where crops are grown. "But as a company, I still don't know where it came from," Engel told CNBC.
Unilever & # 39; s Dove bath foam in a Beijing supermarket.
Zhang Peng | LightRocket | Getty Images
Satellite imagery makes it relatively easy to see where deforestation has occurred, but it is more difficult to determine if Unilever's suppliers were getting crops from these areas, which may consist of multiple smallholders. Unilever has now turned to tech for a more accurate picture.
It is partnering with software company Orbital Insight to track a culture's journey from the field to a processing facility known as the "first mile" of the supply chain in a pilot that uses anonymized geolocation data from cellphone signals to monitor where raw materials are are grown and transported.
"We were able to use the (anonymized) cell phone data to track the (agricultural) trucks from parking lot to parking lot, count the number of trucks driving to each parking lot, and give (Unilever) a map … of their supply chain actually looked like this, up to the (oil palm) concessions, "said James Crawford, CEO and founder of Orbital Insight, in a phone call with CNBC.
This data is then combined with high resolution satellite imagery. If these images suggest that the land has been cut down to make way for oil palm plantations, Unilever can advise its suppliers not to source from these farms. Orbital Insight has trained algorithms to understand the difference between deforestation and areas where trees can be felled as part of a managed forest.
The technology is currently being used to monitor soybean plantations in Brazil and palm oil production in Sumatra and is in its early stages, Engel said, stressing that the company does not want to become a "raw materials police".
Unilever wants other companies to join as the cost of monitoring thousands of supply chains via advanced satellite imagery around the world would be prohibitive. "If, for example, the top 10 or 15 fast-paced consumer goods companies with similar (supply) chains joined (us), we could all use the same photographic material, we could all use the same phone signals, but for different parts of our supply chain, those would Costs much more bearable … We want it to be a collaborative tool, "explained Engel.
According to Jessi Baker, CEO and founder of Provenance, a technology platform that gathers supply chain data in one place, including information on fair pay, carbon footprint or animal welfare, it is also important for brands to communicate the origin of a product to consumers can then be shared with consumers and employees.
The food company Napolina has worked with the technology platform Provenance to provide consumers with information about the origin of the products.
Napolina | origin
It has just started a project with Princes Group, a food company that makes the Italian brand Napolina, which has a company-wide "transparency initiative" addressing sourcing and supply chains. As part of this, Napolina wanted to provide information about its canned tomatoes and reassure buyers, especially given the investigation into the exploitation of migrant farm workers in Italy. In collaboration with Provenance, QR codes have been provided for cans, which are linked to details of how the product is sourced and how it is transported from the agricultural cooperative to the grocery store.
When using provenance, companies need to demonstrate every claim, and the complex process of uncovering information sometimes presents problems, according to Baker. "Because our framework requires evidence to back up what is shared with customers, brands often find that there isn't enough – or that it's not up to standard," she said. "But the process will make our customers better informed about the things to think about in their supply chain," she added.