Description of organization’s supply chain.
Percentage of purchased volume from suppliers compliant with company’s sourcing policy.
Percentage of purchased volume that is verified as being in accordance with credible, internationally recognized responsible production standards, broken down by standard.
Percentage of new suppliers that were screened using labor practices criteria.
Percentage of new suppliers that were screened using human rights criteria.
Percentage of new suppliers that were screened using criteria for impacts on society.
Percentage of new suppliers that were screened using environmental criteria.
Supplier Responsibility Principles
At Hormel Foods, our multifaceted supply chain includes suppliers of hogs, turkeys, ingredients, packaging materials and transportation. In 2011, we introduced our Supplier Responsibility Principles to our key suppliers, and in calendar year 2014 we began introducing these principles to our remaining suppliers in order to communicate the crucial role they play in our ability to operate responsibly.
We expect all our suppliers (both those based domestically and internationally) to operate according to our ethical business practices. All of our purchased volume is derived from suppliers that are compliant with our sourcing policy, as we strictly enforce suspension to any supplier not in accordance with such policies. Additionally, we have established Supplier Quality Management (SQM), which evaluates our suppliers based on quality, delivery, service, technology and price. Suppliers that exceed our established standards are eligible for our annual Hormel Foods Spirit of Excellence Awards. In 2014, we awarded 68 suppliers for their performance. Our ingredient suppliers are subject to additional measurements to further ensure the quality and food safety of our supply chain.
To exemplify our commitment to supply chain sustainability management, we require third-party food safety audits for all of our ingredient suppliers. In addition to the third-party food safety audits, in fiscal year 2014 we conducted an additional 85 food safety supplemental audits. If suppliers are found to be non-compliant, appropriate action is taken — up to and including termination of partnership.
Hormel Foods values the long-standing relationships we have established with our suppliers. In fact, in 2014, only four percent of our suppliers were new suppliers. We are continuously looking for ways to assess our current supplier relationships to ensure that environmental/social risks are addressed and mitigated. In 2014, we completed a category level assessment process to identify risks. As a next step, we are working with our suppliers in categories where risks have been identified. In addition, we assessed more than 40 suppliers on environmental and social risks by surveying our suppliers in nine categories.
Supplier Diversity Program
In addition to ensuring our suppliers comply with the food safety standards recognized by Global Food Safety Initiative (GFSI), we make a concerted effort to give diverse companies such as small, women-owned, minority-owned and veteran-owned businesses the opportunity to supply quality product options that meet our company's growing business needs. As a result of our supplier diversity program, in fiscal year 2014, we purchased 21 percent of our resources from diverse businesses (small businesses, women-owned businesses, minority-owned businesses and veteran-owned businesses). Of these diverse businesses, approximately one percent were women-owned or minority-owned businesses, and approximately one percent were veteran-owned businesses. This data includes independent family-owned hog farms.
Significant actual and potential negative impacts on society in the supply chain and actions taken.
Sustainable Palm Oil Policy
In 2014, Hormel Foods also implemented a sustainable palm oil policy. Hormel Foods recognizes the unique environmental and social risks associated with palm oil. These risks require additional due diligence in sourcing, education and training to ensure the palm oil in our supply chain is not associated with deforestation, child or forced labor, or plantation expansion on carbon-rich peatlands.
Hormel Foods shares the goal of our suppliers of developing a sustainable palm oil policy in order to:
- Protect rainforests;
- Protect ecosystems;
- Protect peatlands;
- Protect high carbon stock forests;
- Protect human rights;
- Improve social standards; and
- Help feed the world in a sustainable way.
While Hormel Foods is a relatively minor user of palm oil, we realize that responsible sourcing of even the smallest amount of this ingredient can make a difference. Therefore, all of the palm oil we purchase is RSPO certified.
We made an initial commitment to purchase only fully traceable palm oil by the end of 2014. We met this commitment by working with our suppliers and achieved traceability to the mill level. We have now decided to also achieve traceability to the plantations. Therefore, our updated commitment is to purchase only sustainable palm oil that is fully traceable to the plantations by 2019. We will report our progress toward this goal in future corporate responsibility reports. For more information, read our full palm oil policy.
Learn more about Supply Chain on our corporate website.