Collaborating across value chains: goodwill is not enough

"We need to collaborate in a better way! This is the most generic advice applicable to every organisation. Yet, also when it comes to re-engineering supply chains to tackle sustainability challenges, this advice is relevant. Only: how do you put that in practice? Because that wonderful concept of 'working together' all too often causes annoyance and misunderstandings.

Collaboration between organisations with different (business) cultures is a challenge by itself. In international supply chains, the frame of reference of, let’s say, farmers in Congo is also very different from that of employees of a retailer. Not to mention the at times conflicting interests and practical problems arising from the distance between continents.

It sounds like a recipe for failure... Unless you find ways to make the collaboration work. The experiences in our chain projects show the whole spectrum of what can go right and wrong in chain collaboration.

The success of a sustainable, inclusive chain depends on the level of trust you build up. Once the initial trust is there, it has to be maintained through regular, structured consultation. In the beginning, the organisation with local representation (Rikolto, Solid, Efico,...) is best placed to "pull the strings" of this consultation. Once the chain runs smoothly, we feel it’s most efficient to let the "final buyer" (e.g. Colruyt Group) pull the strings.

So much for the short version. Below, we look at concrete experiences in more detail. From this we learned that a successful collaboration between actors in the chain is only possible if you have a sound answer to 3 questions: is there a common goal and a shared interest? Is there ongoing consultation? And do partners take risks together by investing together?

In order to work together, you need a goal that drives everyone forward and where you need each other to achieve that goal. If one of the actors has insufficient interest in the success of the chain, the machine stops. It sounds obvious, but in reality it’s often not so self-evident.

The very first rice chain project in Benin that Colruyt Group and Rikolto started with the rice cooperative UNIRIZ-C, grew out of a joint education project. The farmers - who received training through Colruyt’s Collibri Foundation - asked Colruyt if they were not interested in buying their rice. This way, the first chain project was born. Its common goal was to strengthen the position of the Benin rice on the local market by improving quality and exporting it to a European retailer - Colruyt Group.

The export was successful, but given its small volume, it had more of a symbolic value for the farmers, as a business card for the local market. At their request, we also stopped imports because the local market was growing and the cost of certification for fair trade labelling and organisational costs in general weighed too heavily on a small export volume.

For the chains we are now setting up together , we choose products with a larger rotation and strive for products with a clear win-win for each link in the chain.

In the case of chocolate from Nicaragua, Colruyt Group was looking for a sustainable chocolate: free from child labour, environmentally friendly and economically viable for all actors. Rikolto was already working in Nicaragua on a sustainable cocoa chain with the farmers' cooperative La Campesina and also carried out a project - "Yes Youth Can" - to give the daughters and sons of the cooperative members the prospect of a future in villages on the countryside. This programme consisted of general personal development trainings and training with a focus on business development.

Colruyt Group, La Campesina, Collibri Foundation and Rikolto quickly found each other in a joint project in which a fair price price, good quality, the preservation of the natural landscape (through agroforestry) and training for young people (through Collibri Foundation and YOUCA) were central. There were less than 12 months between the first talks and the first sale of Colruyt Group chocolate.

"Realising this chain has strengthened our belief in the manufacturability of chains and the impact we can achieve with them", says Karen Janssens from Colruyt Group. "In our commitment to Beyond Chocolate, we are now going one step further: the ultimate goal is to guarantee a 'living income' to the cocoa farmers of our private label chocolate. "As a first step, we have formed a broader consortium to set up a chain project in Ivory Coast. This chocolate will be for sale in our shops from 2021 onwards. ”

In the case of asparagus from Peru, the aim was to valorise the left-overs that would otherwise be composted or fed to animals. Yet the story was difficult to sell. "Asparagus from Peru... how can that be sustainable, was the first thing you heard. That perception was difficult to reverse," recalls Joris Aertsens of Rikolto. "We also found that the exporter had no intrinsic motivation to invest in this chain project. They did want to cooperate as a favour to their customer, the Belgian importer, but in practice they were not motivated to invest in a product that was relatively unimportant in their turnover".

In addition, the farmers' cooperative went through a crisis of confidence, as a result of which members left the organisation. "Then, of course, it stops," adds Philippe Toussaint. "We sold the product for two years. But still this case was successful, in the sense that we learned a lot on a methodological level.”

In the case of the bananas from Senegal, the common objective was to set up a new organic and fair-trade export chain from Senegal to Belgium. This was advantageous for Colruyt Group from a risk management perspective, because the bananas purchased then all came from Latin America. In addition, the bananas had to travel fewer kilometres to Belgium. For the farmers, there was the prospect of a constant income thanks to exports. Through this export project, thanks to Agrofair, funding came from IDH and AECF, which resulted in technical assistance, training, a sprinkler irrigation system, motor pumps, a tractor with compost turner and trailer. These investments significantly improved the productivity and quality of the bananas.

However, conflicts of interest soon arose, particularly among brokers. "They (re)buy fairly large volumes of bananas, which they pay in cash to the farmers ... which meant that the availability of bananas for the banana cooperative to wash and pack as quality bananas was too low," says Leo Ghysels, who then monitored the project for Rikolto.

"According to the estimation of the exporter Agrofair, the break-even point was 400 tonnes of bananas packed in banana boxes per year (around 22,000 boxes), but in practice we only hit 250 tonnes. "Farmers' commitment is not easy to achieve in a situation of poverty," Leo stresses. "In Tambacounda, farmers like to sell ‘bord champ' - at the edge of their field - because it immediately generates cash. If you’re constantly short of cash, you want money as fast as possible; it doesn’t matter that you’d be able to earn more through the cooperative because it takes more time.".

Consultation is crucial. Even if there is not much news to report, you need to keep the lines open through all possible channels to build and maintain trust. Mails, (video) calls and WhatsApp are obvious channels. But in the end, it is often the personal exchange visits that turn out to be a crucial link in building trust and correctly assessing each other's realities.

In the case of rice from Benin, a number of exchange trips took place, which pushed the project forward. "A colleague from Rikolto in Benin, together with an agricultural expert from UNIRIZ-C, did a short internship at Colruyt Group to become familiar with the workings of a retailer," says Mieke Vercaeren. "Conversely, our buyer visited Benin to fully understand the circumstances and the challenges of the producers". When the rice was in the shops in 2010 , Jef Colruyt (CEO of Colruyt Group) and a delegation from Belgium visited the rice farmers on their fields.

For the start-up of the Senegal banana chain project , the visit of people from Colruyt Group to the banana farmers was crucial to establish confidence. "It showed: 'we mean business'”, smiles Luud Clercx of Agrofair, "A joint action plan was immediately drawn up with 5 key points. Then there was regular consultation, facilitated by Rikolto". This case also clearly demonstrated how important it is to make sure that none of the stakeholders is overlooked. "Looking back, we had too little insight into the processes within the cooperative. We assumed too easily that the farmers' organisation APROVAG represented the producers, which was only partially correct in practice. It would have been better if the middlemen had also sat at the table".

In the case of chocolate from Nicaragua, regular consultations between the main actors in the chain took place at the beginning (2017-2018): Puratos, Rikolto, Colruyt Group and La Campesina. Due to the departure of the responsible employee at Colruyt Group, this came to a halt for a while. At the end of April 2020, a new chain consultation took place at the initiative of Colruyt Group. This was necessary in order to resolve some of the pain points that became urgent. At that time, everyone helped to find solutions, but you can see that it is a challenge to keep such consultations going, especially when people change jobs.

Sometimes "live" contact are impossible, as in the project on coffee from Congo. Due to the security situation in eastern Congo, there is a negative travel advice. Skype is doing its job, yet Kris Durant, master coffee roaster of Colruyt Group, experiences it as a loss. "I know from the Burundi coffee chain project how great the added value of such an exchange is. You see opportunities for new products or for possible projects in which Collibri Foundation can play a role. The exchange is interesting in both directions. For Colruyt employees, we learn a lot from going there to get to know the product and the producers better, and for the farmers, a visit to Belgium - including a visit to our distribution centres, production departments and shopping points - is just as informative. Also in corona times there is a good exchange about how we do things. Partly thanks to this personal bond, it is much easier to maintain contact.”

When partners put time and money into a common project, you know it is serious. In the examples that have been given, it is clear that these projects require considerable investment in time and money from different partners. It is a sign of commitment, but it does not guarantee success.

Through its Collibri Foundation, Colruyt Group invests in the training of young farmers linked to the chain projects. Even when the chain is halted - like with the rice from Benin - Collibri Foundation has continued to support the children of the farmers in order to anchor the results of the chain project locally. Also when Colruyt Group withdrew from the banana project, Agrofair continued together with Rikolto to complete the project locally. When certification is an added value, the cost price can also be shared. In the case of the quinoa from Peru, for example, Colruyt Group contributed to the audit of the processing plant.

Rikolto supports the farmers' cooperatives in further professionalising their organisation, with particular attention to the inclusion of young people. And Colruyt Group pays a daily fee to Rikolto, to compensate the time that Rikolto invests in monitoring the chain projects that benefit the company. A team has been installed within Colruyt Group that is fully dedicated to making supply chains more sustainable. In 2015, Rikolto and Colruyt Group formalised the objectives and modalities of their cooperation in a Memorandum of Understanding (MoU).

Each chain also requires specific input from the other chain actors. For bananas in Senegal and passion fruit in Tanzania, Agrofair and Special Fruit not only contributed their expertise on the export of fruit, but they also invested in much-needed training for farmers on good agricultural practices. We will come back to this in more detail when we look at how chain collaboration can improve access to services.

"In the example of the passion fruit from Tanzania, we saw a great commitment and enthusiasm from the people of Special Fruit and Colruyt Group," says Joris Aertsens. "On the producers' side, the market situation changed. Demand on the local and regional market improved and therefore became more interesting for producers than a rather risky export to a demanding European market and a context where producers had limited confidence in exporters who in the past often failed to meet their commitments. "

Investing together means that you often have to step outside the lines of your traditional role. "Rikolto sometimes has to step outside the role of pure supporter of the cooperative and take on more of a business role," says Philippe Toussaint. "Colruyt Group must look beyond its role as a buyer of a product. Sometimes it is necessary to finance a social audit or partly finance a purchase before receipt, which involves risks."

People work

This brings us to perhaps the most important but elusive lesson: setting up sustainable food chains is human work. "Every time I notice how essential human contact, in the form of exchanges and field visits, is to build mutual trust", says Hannelore Delaplaecie, buyer Quinoa of Colruyt Group. "Certainly from the perspective of farmers, it is appreciated if the buyer comes to the place in person, to their remote villages, and also discusses directly with the farmers. For us, as a company, you never have all the facts available to base your investment on. It is always a bit of a gamble. You have to dare to rely on your intuition and the 'click' you have with people in the organisations involved.”