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Supply Chain Transparency within FMCG

Photo Credit: Fashion Revolution.

Supply Chains have progressively developed into complex, global networks, in-turn increasing exposure to risks in the supply chain. It is thought that this growth, coupled with a lack of supply chain transparency has resulted in brands being partly responsible for incidents related to labour conditions, environmental scandals and human rights.

With recent figures showing 88% of consumers are now more loyal to companies that support social or environmental issues and 73% of millennials willing to pay more for sustainable fashion; the retail industry must begin to adapt, to reflect this rise of mindful consumerism.

As consumers increasingly demand sustainability, brands must work towards a fully transparent supply chain, or risk losing out as customers opt for more ethical alternatives. Brands such as Nestlé, Tony’s Chocolonely, H&M, Monsoon and Lucy & Yak are leading the way when it comes to prioritising sustainability and supply chain transparency.

In February, Nestlé announced that it would disclose their list of suppliers and raw material sourcing data. This was the first disclosure of its kind, as part of Nestlé’s commitment to reach full supply chain transparency. So far, Nestlé has publicly disclosed their palm oil, paper and vanilla supply chains, and continue to publish more. Additionally, Nestlé published a Transparency Dashboard to provide details of their journey towards achieving a deforestation-free supply chain. By sharing the details of this supply chain progress, Nestlé aims to encourage collective and continued action towards a more sustainable supply chain for the future.

Recently launching in the UK, Dutch brand Tony’s Chocolonely is aiming to make the chocolate supply chain 100% slave free. Despite premium prices, Tony’s recently overtook Milka as the Netherlands’ leading chocolate brand, amassing worldwide sales of £39.4m in 2017 – up 53% on the previous 12 months. The brand’s success reflects growing consumer demand for a transparent supply chain, with customers willing to pay more to guarantee ethical sourcing.

Tony’s main principles include: ingredient traceability, fair pay for farmers, improving farmers’ productivity, and investing in long-term commitment and farm cooperatives to empower farmers to work together.

But it is not just the Grocery FMCG sector which has long been criticised for opaque, unsustainable supply chains.

The fashion industry has also faced intense criticism. Previously associated with disconnect, a lack of accountability, and unethical supply chain practices; fashion brands had formerly claimed to be unaware of their supply chains, and the many manufacturing processes involved.

However, following the 2013 Rana Plaza factory collapse – in which 1,138 people died, retailers were quickly expected to start showing greater interest in, and accountability for their product’s supply and manufacture; with additional consumer pressure for brands to take responsibility for the workforce that their supply chain relies on.

One charitable organisation demanding greater transparency in the fashion supply chain, is ‘Fashion Revolution’. A Not-for-Profit, which calls for people, the environment, creativity and profit to be valued in equal measure. The charity believes that collaborating across the whole supply chain, from farmer to consumer, can transform the fashion industry and ensure clothing is made in a safe, clean and fair way.

Further humanising the supply chain, ‘Fashion Revolution’ run an annual ‘Who Made My Clothes?’ campaign, where brands and producers are encouraged to respond with #IMadeYourClothes to demonstrate transparency in their supply chain. It is this Fashion Revolution Week campaign, which reveals the human faces behind the clothing, encouraging consumers to be more mindful.

High Street retailer, Monsoon, contributed to Fashion Revolution Week by introducing the artisans behind their products on their website and social media. Monsoon claims to take responsibility for their product supply chain, mapping factories and recording associated artisans. The brand introduced worker handbooks were artisans can track the number of pieces they’ve worked on and keep a record of their wages.

Sustainable eCommerce boutique, Lucy & Yak also took part in Fashion Revolution Week 2019, featuring the manufacturers who make their products on their social media. Lucy & Yak value their close relationship with their British and India-based tailors, and ensure they pay a living wage to all employees.

Additionally, H&M has recently launched a new transparency initiative, sharing product details for every garment it sells online, including supplier names, factory names and addresses and the number of workers in each factory. With details of the supply chain exposed, there is nowhere for unethical practices to hide, and consumers can be reassured their products are the result of a sound and sustainable supply chain.

Companies with genuine, strong moral and ethical values will thrive as consumers become more mindful. Achieving supply chain transparency is vital in becoming a sustainable business, as consumers demand to identify those directly involved within their clothes and food supply chains, to ensure they are treated fairly and humanely.

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