2012 3 14_hqo asta_draft 4 w asta logo

The Business Case for Sustainable AgricultureThe Business Case for

Sustainable Agriculture

• Brief Overview of HQO• Sustainability Defined• Organic Agriculture• Case Studies• Steps You Can Take

Overview

• Largest 100% organic bulk, herb, spice and tea ingredient company in the U.S.

• Provide custom formulations, packaging, private label and conversion from conventional to organic

• The result of a merger in 2009

• Located in Reno, NV• Growing at 20% a year

Who is HQO?

• Our passion is reflected in our values

Who is HQO?

Reliability

HQO Values

Food Safety

Quality

Wellness

Sustainability

Innovation

Sustainability DefinedSustainability Defined

The Business Case for Sustainable Agriculture

What is sustainability?

Ability to maintain

Maintain ecological balance

Source: Bing online dictionary

Food Business Sustainability

Sustainability Defined

Sustainability Defined

Corporate Sustainability

+

Sustainability Defined

Sustainability Defined

Corporate Social Responsibility

Defined by Lord Holme and Richard Watts in The World Business Council for Sustainable Development’s publication ‘Making Good Business Sense’

“ Our products’ biggest environmental impacts occur during the growing and processing of our food ingredients…

Specifically, we seek to: Identify agricultural practices and strategies that will help meet the

world’s growing need for safe, nutritious food; Decrease agriculture’s impacts on the environment; Improve the social and economic well-being of agricultural

communities.”

Source: Kellogg 2010 Corporate Responsibility Report

Sustainability Defined

Food Companies Focus on Sustainability

• Food Marketing Institute and Grocery Manufacturers Association holds first Sustainability Summit in 2010

Sustainability Defined

Food Companies Focus on Sustainability

General Mills has a long-standing commitment to minimize its impact on the environment by working closely with the agricultural community.

Green Giant brand has practiced sustainable agriculture for more than a century

Research continues to develop and improve crop breeding and agronomic practices that benefit farmers and the environment.

Source: GM Sustainable Agriculture document found at http://www.generalmills.com/~/media/Files/sustainability/GM_agriculture.ashx

Sustainability Defined

Food Companies Focus on Sustainability

Sustainable agriculture is part of being a corporately and socially responsible

sustainable food business

Sustainability DefinedSummary

Organic AgricultureOrganic Agriculture

The Business Case for Sustainable Agriculture

Organic Agriculture

Source: Organic Trade Association

Organic Agriculture

• Demand for organic food continues to grow

Organic Agriculture

• Demand for organic food continues to grow

Source: Kiwi Magazine

Organic Agriculture

• Organic shopping moves mainstream

Source: Organic Trade Association’s 2011 Organic Industry Survey

Organic Agriculture

• Organic growth outpaces conventional

Source: Organic Trade Association’s 2011 Organic Industry Survey ($mil consumer sales)

Organic Agriculture

• Organic growth outpaces conventional

Source: Organic Trade Association’s 2011 Organic Industry Survey

Organic Agriculture

• Organic consumption grows globally

Source: Organic Monitor ($ bil consumer sales)

• “Sustainability” noted as overall culinary theme in National Restaurant Association’s 2012 Chef Trends– National Restaurant Assn on

launches ConServe Program – Many restaurants feature or only use

seasonal/local food

Organic Agriculture

2012 Food Trends Support Sustainable Agriculture

• SustainableBrands.com notes the “Why?” consumer as a 2012 Trend– Mostly millennials– Frugal– Resourceful– Technologically savvy– Focused on being socially

responsible

Organic Agriculture

2012 Food Trends Support Sustainable Agriculture

• MyNewsDesk Blog 2012 Marketing & PR Trends includes “Consumer Engagement”

– Companies that provide the resources for consumers to save money, time and the environment and help others will be favored.

– Example: Häagan-Dazs® Save the Bees Campaign• Save the bees that help pollinate the ingredients Häagan-Dazs

uses to make its ice cream• Buy a pint, save the bees• Campaign has been so successful it’s

continuing into a second year not originally planned

Organic Agriculture

2012 Food Trends Support Sustainable Agriculture

Häagan-Dazs® Save the Bees Campaign

Case StudiesCase Studies

The Business Case for Sustainable Agriculture

Improving Farming Capabilities in India

Case Studies

Pre-Organic Conditions

• 82% of farmers borrowed against future crop year to pay for pesticides, fertilizers and seed

• Average income US $440/acre

• Average amount spent on cultivation US $115.74/acre

• Average net income was USD $154/acre – not sufficient to meet household expenses

• Result was farmers losing land

Case StudiesImproving Farming Capabilities in India

Pre-Organic Conditions

• Soil condition too poor for successful production

• Existing soil carbon content ~ 0.5%

• Sustainable crop production requires 3-4% soil carbon content

Case StudiesImproving Farming Capabilities in India

Conversion to Organic

• Reduction of pesticide and fertilizer applications

• Increased organic farming practices

• Water Conservation

• Pooling fund from local farming projects by NGOs allowed for bunding/trenching to gather and conserve water

• Soil Fertility

• Manuring

• Crop rotation

• Green leaf manuring

Case StudiesImproving Farming Capabilities in India

Bunding

Other Activities Implemented for Organic Success• Partnered with local processer that focuses on growing indigenous crops in a

sustainable manor

• Partner with local NGOs across India to assist in mobilizing farmers for best in class organic agriculture training and education

• Work with leading research organizations in India and abroad to evolve organic practices for improved productivity, sustainability and quality

• Certified organic processing facilities close to farms

Case StudiesImproving Farming Capabilities in India

Results• Reduced Financial Risk – need to borrow

money essentially non-existent due to reduced need for pesticides and fertilizers.

• More Income – farmers currently achieving 10-20% more income with projections of up to 40-50% more income based on type of crop producing.

• Water Conservation – 30% water conservation making droughts less stressful

• Soil Fertility – Improved biological activity resulting in expected 3-5% soil carbon level within five years

Case StudiesImproving Farming Capabilities in India

Creating a Sustainable Agriculture System in Egypt

Case Studies

Farming in the Dessert

• Food scarcity and security real concerns for Egypt

• Egypt consists of over 95% desert

• Leaves only 84 square meters of arable land per person for 84 million people

• Egypt’s population is growing at 2% per year

• According to the World Bank, 20% of Egypt’s population lives below the poverty line

• Food scarcity and security real concerns for Egypt

Case Studies

Creating a Sustainable Agriculture System in Egypt

Biodynamic Agriculture

• Specific form of organic agriculture

• Looks at the farm as a self-sustaining ecosystem including:

• Soil

• Plants

• Animals

• People

Case Studies

Creating a Sustainable Agriculture System in Egypt

Biodynamic Agriculture Practices Turn Dessert Land into Fertile Soil

• Closed nutrient cycle approach – what is on the land must sustain the land

• Composting from human waste (garbage, food waste, etc.)

• Using animal waste for fertilizer

• Intercrop forestry (planting trees within fields) and crop rotation help maintain soil structure

Case Studies

Creating a Sustainable Agriculture System in Egypt

Biodynamic Agriculture Practices Turn Dessert Land into Fertile Soil

• Native predators reduce need for pesticides

• Chrysoperla carne and ladybird (to control aphids)

• Orius and amplyseius cucumeris (to control thrips)

• Trichogramma (to control butterfly eggs)

• Phytoseiulus persimilis (to control spider mites)

Case Studies

Creating a Sustainable Agriculture System in Egypt

Biodynamic Agriculture Practices Turn Dessert Land into Fertile Soil

• Results

• Increase water retention in soil (up to 70%)

• Decrease water consumption (20-40%)

• Soil’s ability to hold water decreases soil erosion

• Reduced costs on inputs allow for farmers to cover increased costs in labor and help improve the livelihood of the local community

Case Studies

Creating a Sustainable Agriculture System in Egypt

Case Studies

Typical desert soil

30 years later –

arable land evolved

Steps You Can TakeSteps You Can Take

The Business Case for Sustainable Agriculture

1) Where is sustainable agriculture in your corporate/social responsibility strategy?

2) What are your benchmarks to identify success?

3) Who is the passionate player on your team to help lead the effort.

4) Partner with current suppliers to explore conventional to sustainable/organic opportunities.

Steps You Can Take7 Steps Towards Sustainable Agriculture

5) Reach out to your local organic certifier to learn the requirements and what is needed to convert.

6) Don’t be afraid to ask other organic manufacturers for help, tips and guidance.

7) If organic supply isn’t feasible for your company, explore alternative activities to support sustainable agriculture. (Ex: provide funds for African female farmers.)

Steps You Can Take7 Steps Towards Sustainable Agriculture

Steps You Can TakeExamples of Sustainable Benchmark Tools

Steps You Can TakeExamples of Sustainable Benchmark Tools

Steps You Can TakeSustainable Agriculture Projects

HQO partners with Rwanda girls school

Steps You Can TakeHQO Partners with Rwanda Girls School

The Business Case for Sustainable AgricultureThe Business Case for

Sustainable Agriculture

Presented By: Boligala RajuPredisident & CEO, High Quality Organics

www.HQOrganics.com