Every level of our business is influenced by the ideal we work towards: a Natural Evolution. In our production, in our distribution, and within our own company, the natural choice is our first priority.
Arla makes great demands on suppliers
Each year, 55 employees in Arla's global purchasing department manage purchases for DKK 10 billion from Arla's 15,000 suppliers. It is not enough to be able to offer favourable prices as an Arla supplier. Arla not only makes great demands on its own operations, but also on those of its many suppliers ensuring Arla products are high quality and climate and environmentally responsible.
"When it comes to things that we put into or around our products, we must know exactly what they contain. Furthermore, Arla has a reputation in connection with ethics and safeguarding the environment. This makes it important for us to be able to rely 100 per cent on our suppliers," says Steen Hedegaard Madsen, head of Arla's global purchasing department.
Code of conduct for suppliers
It is necessary to sign Arla's code of conduct for suppliers in order to become one of Arla's key suppliers.
"By signing our code of conduct, you also guarantee, among other things, that you comply with the law in the country in question, that you observe human rights, that you do not use child labour, and that you don't discriminate on the grounds of gender, race, or religion," explains Steen Hedegaard Madsen.
Thorough checks on new suppliers
When Arla wants to buy a new service or a new product, the individual business units are responsible for drawing up the specifications that the supplier must adhere to – over and above living up to Arla's Code of conduct for suppliers. When the specifications have been drawn up, the task is forwarded to Arla's global purchasing department which is then responsible for finding the right supplier.
"When potential suppliers have been identified, we send an inquiry to them for the task in question. In the inquiry we ask them about such things as what ISO accreditation they have and whether they have an environmental policy," explains Steen Hedegaard Madsen.
Based on the replies received, Arla decides which of the suppliers the company wishes to do business with and the selected suppliers now have the opportunity to submit tenders for the task. The final choice of supplier is made on the basis of the tenders.
Sharper focus on the environment and ethics
In 2008, Arla adopted a climate strategy with the goal of reducing CO2 emissions considerably in its packaging, transport and food production. As this strategy gradually begins to come alive in the organisation, it will also influence Arla's global purchasing department.
"We can already see there has been sharper focus on ethics and the environment in the specifications we have received from the various business units in recent years, and there can be no doubt that this will be even more evident in connection with the work on our climate strategy," says Steen Hedegaard Madsen.
In order to keep abreast of this development, a quality and environment manager has been appointed at Arla's global purchasing department with responsibility for following up where and how goods from sub-suppliers are produced.
"Over and above this, we already have many technically skilled employees. They will help to ensure that we buy the right products in relation to the future requirements there will be in connection with the work on our climate strategy," says Steen Hedegaard Madsen.
- Arla's global purchasing department manages purchases amounting to DKK 10 billion a year from 15,000 suppliers. The department is responsible for buying everything from electricity and diesel to ballpoint pens, packaging, ingredients and IT systems.
- The milk team within Arla’s global business service department is responsible for buying milk from Arla's farmers.
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Arla's ambitious goal for reducing CO2 emissions
Arla has a clear goal: Before 2020, CO2 emissions must be reduced by 25 per cent in connection with food production, transport, and packaging. The goal is part of the climate strategy published by Arla in 2008. According to Jan Dalsgaard Johannesen, Group Climate Manager at Arla, a 25 per cent reduction is an ambitious goal.
The great challenge livestock production
Arla's annual CO2 emissions have been estimated at 9 million tonnes. Food production, transport, and packaging each account for 500,000 tonnes, while livestock production accounts for 7.5 millions . The enormous emissions in connection to livestock production are due to methane andnitrous oxide. There is still a great deal to be learned about this area, according to Jan Dalsgaard Johannesen.
"Among other things, we have decided to take part in a research project in this area that will hopefully make it possible for us to advise farmers and, at a later stage, possibly propose goals for how we can reduce CO2 emissions in connection with livestock production."
From words to action
As mentioned, Arla has defined three principal areas of focus in connection with achieving its ambitious goal regarding climate: transport, food production, and packaging. More areas have been defined within each of these three areas where measures will be implemented, and further work is being carried out by inter-organisational working groups.
"Where energy is concerned, for instance, there is a working group whose job is to discover the best practices and get them out into the organisation," says Jan Dalsgaard Johannesen.
"The next step is to involve the entire organisation. Among other things, this will be brought about by the various departments integrating the area in question into their business plans."
- Climate is part of Arla's overall environmental strategy which forms part of the CSR strategy "Our responsibility". While the environmental element concentrates on areas such as water, energy, and waste, the climate strategy is designed to reduce CO2 emissions.
- Livestock production not only leads to the emission of CO2, but also huge quantities of methane and nitrous oxide. Arla therefore calculates its CO2 emissions as CO2e, which means that all greenhouse gases are converted into CO2. One kilogramme of methane, for instance, is equal to 25 kilogrammes of CO2, while one kilogramme of laughing gas is equal to 298 kilograms of CO2e.
- Several areas where measures will be carried out have been defined in connection with climate strategy:
Livestock production
- Feed composition
- Utilising valuable substances in fertilizer
- Biogas production from waste substances
Transport
- Using biofuels
- Providing training in environmentally-friendly driving
- Increased efficiency/better route planning
Food production
- Using new technology
- Using CO2 neutral fuels instead of fossil fuels
- Increased efficiency
Packaging
- Minimising the quantity of packaging
- Using materials that have little impact on the environment
- Using more materials that can be recycled
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Farm visits show children how milk gets from the cow to the table
Every child knows what milk is. But not all children know where milk comes from or how it gets from the cow to the supermarket refrigerator. A visit to a farm gives children the opportunity to see everything for themselves. Arla arranges farm visits for schoolchildren of all ages where they can get close to nature and learn how people, animals and nature are connected.
From the schoolyard to a farm in Sweden
Arla has been arranging farm visits in Sweden since 1993.
"The purpose is to provide children with the opportunity to understand the connection between people, animals and nature and also teach them something about their bodies and the food they eat," says Marie Persson, manager of Arla Minior Members' Service.
Arla has a total of 230 farms that can be visited in Sweden and 40,000 schoolchildren take the opportunity to do so every year. Before a school class goes on a visit, their teacher receives a letter of welcome and a package containing free educational material. Among other things, the package contains a dice game that provides information about the human body and health, cows and other farm animals, and the farmer's work.
From cow to carton in Denmark
Arla also arranges farm visits in Denmark. The visits allow children to gain first-hand knowledge of life in the country. They go on a conducted tour of a farm, learn about how cows are cared for and how milk is produced.
"We want to show children that milk is a natural product. Today, many children live in towns and don't know anybody who lives on a farm and who can show them what it is like," says Birgitte Nygaard from Consumer Dialogue and Relations in Denmark.
Birgitte continues: "As a major food company, we have joint responsibility for teaching children about modern farming and helping them to understand where food comes from."
Danish school classes can combine a farm visit with a visit to one of Arla's dairiesThis way, they can see the entire process from the time the cow is milked to milk cartons being filled and transported to the supermarket.
Schoolchildren in both Sweden and Denmark are given a glass with a picture of an Arla cow on it as a souvenir.
Facts about farm visits – Sweden
- There are 230 farms that can be visited registration can be made via the web site: www.arla.se/miniorbokning.
- About 40,000 children a year visit farms.
- Arla can provide transport for school classes in Sweden that have to travel long distances from Stockholm or Gothenburg to visit farms. Schools in the rest of the country arrange transport themselves.
- All schools receive a box containing free teaching resources before a visit.
Facts about farm visits – Denmark
- Arla's regional offices meet the wishes of each school by arranging a visit to a farm nearby. Schools must arrange transport to and from the farm.
- About 15,000 children a year visit farms.
- After a farm visit in Denmark, children are given a big poster for their classrooms that shows how milk gets from the cow to the table, a little book and amusing colouring sheets.
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