Our supply chain
The processes involved in making one of our chocolate bars, Cadbury Dairy Fruit & Nut, at our factory in Bournville in the United Kingdom, give a good illustration of how supply chains, and our relationships within them, can differ.
A complex and diverse supply chain
For us the term 'supply chain' describes the process we use to obtain the ingredients, packaging goods and services that we need to do our business. At Cadbury Schweppes, we have several supply chains, depending on the item we are sourcing. Our supply chain for milk, for example, is different from the supply chain for advertising, and supply chains for the same item can also vary from country to country.
We believe the very diversity of our various supply chains and the global nature of our procurement underlines the imperative of having clear guiding principles, strong values and robust operating processes. Good CSR led practice in our supply chain underpins the integrity, sustainability, quality and safety of our products.
Making and advertising Cadbury Dairy Milk in the UK
The processes involved in making one of our chocolate bars, Cadbury Dairy Milk Fruit & Nut, at our factory in Bournville in the United Kingdom, give a good illustration of how supply chains, and our relationships within them, can differ.
Advertising - one step away Cadbury Schweppes has direct contracts with the advertising agency responsible for advertising and promoting Cadbury Dairy Milk Fruit & Nut. This means the advertising agency is one step away from our company.
Milk - two steps away The milk that goes into our chocolate bar comes from the United Kingdom. We buy it from farmer-run cooperatives. Here we have direct dealings with the co-operatives but not with the individual farmers, which means the farmers who produce the milk are two steps away from our company.
Raisins - two steps away The raisins in our chocolate bar come from Turkey. We buy the raisins from a family-owned Turkish processing plant near Izmir, which buys its raisins from around 1,000 small farmers. The raisins are traceable back to the original farms. The processing plant maintains close relations with the farmers to ensure quality. We are two steps away from these 1,000 small farmers.
Almonds - two steps away The almonds in our chocolate bar come from California. We buy the almonds from a processor who in turn buys them from the farmer. Here we are two steps away from the original producers, the Californian almond growers.
Sugar - two steps away The sugar we buy comes from the UK and mainland Europe. We buy it from sugar processors. The sugar processor buys sugar beet direct from the farmer. The farmers who grow the sugar beet we use are therefore two steps away from our company.
Cocoa - three or more steps away Cocoa for our chocolate bar is sourced from Ghana. We buy cocoa from the Ghanaian government Cocoa Board (COCOBOD), which controls the cocoa trade in Ghana. Between COCOBOD and the farmer there are licensed buying companies. They buy cocoa from the farmer and transport it to the seaport. Here we are three steps or more away from more than half a million farmers.
How much influence we can exert on particular supply chains varies. If we are a major buyer of a product, or where we buy directly from the producer, our influence can be great. When we are not a major buyer, or where we are several steps away from the producer, our influence tends to be more limited. Nevertheless we still recognise our responsibilities for each link in our supply chain.
Since our supply chain is so extensive and wide-ranging, the number of groups with which we can engage, and the degree of engagement, varies according to circumstances. It is also greater where we believe we can have most effect, for suppliers whose products and services are more central to our brands, and for those operating in countries or sectors typically known to face the most significant human and labour rights issues. We must prioritise and have initially focused our efforts on suppliers of ingredients, packaging and promotional items.
To help with this process we have a method of categorising and prioritising our suppliers into three levels, or tiers, according to risk as well as the importance of the product or service to our company and our brands.