At Hormel Foods, our multifaceted supply chain includes suppliers of hogs, turkeys, ingredients, packaging materials and transportation. We recognize the crucial role of the supply chain in our ability to operate responsibly, and in 2011, we introduced our Supplier Responsibility Principles to our key suppliers.
We expect our suppliers to operate according to our ethical business practices. We have established Supplier Quality Management (SQM), which evaluates our suppliers based on quality, delivery, service, technology and price. Our ingredient suppliers are subject to additional measurements to further ensure the quality and food safety of our supply chain. In fiscal year 2013, we conducted 104 audits of our ingredient suppliers based on food safety standards that are recognized by the Global Food Safety Initiative (GFSI), an internationally recognized, third-party food safety management system. If suppliers are found to be non-compliant, appropriate action is taken — up to and including termination of partnership. Suppliers that exceed our established standards are eligible for our annual Hormel Foods Spirit of Excellence Awards. In 2013, we awarded 90 suppliers for their performance.
Furthermore, we are beginning to develop a formal supplier assessment process and will report on our progress in future reports.
In addition to ensuring our suppliers comply with the food safety standards recognized by GFSI, we make a concerted effort to give diverse companies such as women-owned and minority-owned businesses the opportunity to supply quality product options that meet our company's growing business needs. As a result of our supplier diversity program, in fiscal year 2013, we purchased 20 percent of our resources from diverse businesses (small businesses, women-owned businesses and minority-owned businesses). Of these diverse businesses, approximately 2 percent were women-owned or minority-owned businesses. This data includes the independent family-owned hog farmers.
In 2013, Hormel Foods also implemented a sustainable palm oil policy. Hormel Foods recognizes the unique environmental and social risks associated with palm oil. These risks require additional due diligence in sourcing, education and training to ensure the palm oil in our supply chain is not associated with deforestation, child or forced labor, or plantation expansion on carbon-rich peatlands.
Hormel Foods shares the goal of our suppliers of developing a sustainable palm oil policy in order to:
- Protect rainforests;
- Protect ecosystems;
- Protect peatlands;
- Protect high carbon stock forests;
- Protect human rights;
- Improve social standards; and
- Help feed the world in a sustainable way.
While Hormel Foods is a relatively minor user of palm oil, we realize that responsible sourcing of even small amounts of this ingredient can make a difference. Therefore, we purchase 100 percent of our palm oil from Roundtable on Sustainable Palm Oil (RSPO) certified sources. In addition, we are committed to purchasing only fully traceable palm oil by the end of 2014 and will report our progress toward this goal in our future corporate social responsibility reports. For more information, read our full palm oil policy.
Learn more about Supply Chain on our corporate website.