Sustainability Series: General Mills Follow Up
June 25, 2014
General Mills is one of the largest food companies in the world, marketing in more than 100 countries on six continents with 41,000 employees. Their brands are known around the world for quality, beginning with Gold Medal flour in 1880, which to this day remains the No. 1 selling flour in the United States. Other brands include Pillsbury, Green Giant, Cheerios and Betty Crocker. In 2012, we talked to Jerry Lynch, VP and Chief Sustainability Officer, about the company’s focus on providing customers and consumers with the best quality products while working to sustain the environment. We caught up with Lynch recently to talk about the important strides General Mills is making toward improving the sustainability of water use throughout their entire supply chain.
How has water efficiency in the company’s operations improved – including transportation and packaging – and where do you see it going in the future?
In the total value chain, 99% of our water usage is upstream in agriculture. You can’t grow ingredients without water. Some is needed in the processing so the remaining 1% is within our four walls.
If we look just at that transformation phase, yogurt has a much higher water usage rate than freezing vegetables or producing cereal and granola bars. It has a more water intensive cleaning process because you are dealing with a live cultured product. If we look upstream, our dairy based products like Haagen-Dazs are more water intensive. There is more embedded water to produce dairy products so there is a bigger water footprint. Cows drink a lot of water. Cows get the energy to produce milk by eating a lot of grain and grass, which take water. The majority of our portfolio is grain based or vegetable based, which are both less water intensive. That said, we care about greater water efficiency across the board.
What improvements is General Mills making in their “outside direct operations”? In other words, how plausible is it to oversee the water use of the farmers and agriculture producers?
While we can’t control, we can influence. We look at water in both key geographies and across key crops. Take key crops first. One of the things we have committed to is sustainably sourcing ten material ingredients by 2020, and water is a key to sourcing sustainably. In the U.S., we are chairman of Field to Market – which provides analytical and management tools for farmers. We are attracting innovative choices farmers can make to manage their production, including water, in a sustainable way.
Precision agriculture is bringing a lot to the table. In Central Mexico, where we have contract relationships with farmers, we have offered low interest loans to install drip irrigation and improve productivity of the crops; making sure the water is in the exact place where the plant needs it the most. This also enabled them to administer fertilizer and pesticides in a much more efficient manner. We have direct experience in large row crop Ag in the U.S. like wheat, oats and sugar beets. You see precision irrigation where farmers can literally adjust the amount of water they apply square meter by meter. It’s farming like a garden. Precision Ag in large commodity crops in the developed world will be a key enabler when we look at the future.
From a geography point of view, we are doing work in the riskiest watersheds in which we operate. We provided The Nature Conservancy 75 key watersheds around the world – either where we have a production facility, key growing region or both, and they ranked for us the riskiest areas to focus on based on water stress and materiality to us as a business. They identified eight regions where we have the most material risk and we are focusing our current efforts there initially.
Outlined in our Global Responsibility Report is a four-step process of assessing, analyzing, collaborating and transforming. The analysis done by The Nature Conservancy looks out 20 to 50 years at how much water is being used out of a given watershed, and how much is coming in, how much is available in aquifers, and climate change impacts. All of this data helps us get a more granular picture.
This analysis provides a burning platform for gathering collaborators. With other key partners in the watershed we can help convene the development of a stewardship plan. If one is already in place, we will join in the existing process and encourage other players to join in.
How does the sustainable agriculture of General Mills’ ten priority raw materials – palm oil, fiber packaging, wheat, oats, sugar beets, vanilla, cocoa, dairy, corn and sugarcane – factor into water conservation?
Water conservation is not product specific; it is watershed specific. While climate is a global problem needing globally attentive solutions, water is very specific to the regional watershed. The Mojave Desert will always be hard to get water to, but Minnesota won’t have the same water quantity problem.
Is there a political angle involved as well?
Water is used in watersheds by communities, agriculture, industry and for recreation. There are a large number of stakeholders in any watershed. Ag groups, government entities, and environmental agencies – they all have a vested stake in the water being at a healthy level. Every watershed is unique and you have to look at how much is there, how much is going out and what is the infrastructure to make that available. In many situations, aging infrastructure isn’t adequate to support the population levels that we have now.
What stresses do you see for the next generation?
Go back to where the water use is – largely in Ag. Getting precision agriculture that is most efficient to the specific crop is imperative. There is such a great need globally for it. We also will need to figure out the policy front. We need political will to address these challenges on a level playing field. This is one of the key complications current and future generations will grapple with.
What are the top three actions the industry needs to take now related to agriculture and food related to water?
One, understand where the water footprint is in your Ag supply chain. Two, understand geographically where the water stress is… you want to start where the greatest challenges are. Three, show up! In some places we are going to convene, other places we will join. We are not a water company. We are a food company who needs water. We hope to encourage others and push forward.
You can’t transform food without using water. When we think about sustainability, we think about it as a critical business imperative. We take the output of Mother Nature, transform it to provide nutrition for the busy lives of today’s consumers, and we sell it to them. We are highly dependent on Mother Nature working well. So a healthy water system and a healthy ecosystem are essential for us.