The supply chain links of raw materials production and processing involve particular ecological challenges and a heightened risk of non-observance of labour and social standards. Accordingly, REWE Group activities are focused on these. As part of product-related risk analysis, REWE Group has defined the following food raw materials as critical: fruits and vegetables in general with a special focus on bananas and pineapples, meat and dairy products including animal feed, coffee, cocoa, orange juice, tea, palm oil and fish.
To permanently integrate sustainability into its company processes, REWE Group has developed an all-encompassing sustainability strategy that is made up of four main pillars: Green Products; Energy, Climate and the Environment; Employees; and Social Involvement. The Green Products Strategy 2030 was adopted in 2017 in a move to more strongly anchor sustainability within procurement processes. In the action areas of ethical business practices, animal welfare and conservation of resources, the trade and tourism company designs effective measures to reduce environmental and social impacts as part of the Green Products commitment. Activities relating to the focus food raw materials are of special importance in these areas of action.
REWE Group continuously works to make its supply chains more social and environmentally conscious. The REWE Group observes internationally recognised certification standards, cooperates in industry initiatives, launches its own projects and formulates its own requirements within the framework of company policies and the PRO PLANET process. The approaches that the company takes for individual raw materials are outlined below.
Since 2013, REWE Group has required agricultural suppliers of primary fruit and vegetable products to agree to comply with the core labour standards of the International Labour Organisation (ILO), within the respective framework of applicable national laws. This includes proper legal payment of at least the minimum wage required by law, collective agreement or contract. Both are mandatory requirements, compliance with which must be documented by the suppliers. The suppliers are also responsible for ensuring that their own suppliers in turn meet these standards. All producers of fruit and vegetable products must demonstrate that they meet the requirements cited above by undergoing external audits (such as the GLOBALG.A.P Risk Assessment on Social Practice (GRASP), SA8000, Sustainable Agriculture Network (SAN), amfori BSCI). Compliance with these requirements is checked during spot audits.
In addition to addressing social issues in fruit and vegetable production, REWE Group is also committed to reducing environmental impact. This includes promoting biodiversity through specific projects, for example concerning apple and vegetable farming in Germany, requirements for the use of pesticides and adherence with Rainforest Alliance, Fairtrade and other ecological standards.
The increased cultivation of palm oil is destroying peat forests and rainforests. In the process, the basis of local populations’ lives is frequently being taken away, and the habitats of valuable species are being lost. The clearing of rainforests is also releasing huge amounts of carbon dioxide.
Against this backdrop, REWE Group developed its Guidelines for Palm Oil and Palm Kernel Oil Products at the beginning of 2011. The goal behind this guideline is to exclusively use more sustainably produced palm oil in all store brand products. To ensure this, the REWE Group relies primarily on the certification standard of the Roundtable on Sustainable Palm Oil (RSPO), of which the Group has been a member since 2011. Four trade models are applied in supply chains for the purchasing of certified palm oil. Each has different requirements regarding traceability of the raw material to the farm. REWE Group has used 100 per cent certified palm oil since 2013. In Austria, REWE Group has exclusively purchased certified palm oil since 2014, and the Group’s brand Ja! Natürlich has been palm oil-free since 2018.
|RSPO-certified palm (kernel) oil in store brand products (Germany)||100%||100%||100%|
|RSPO-certified palm (kernel) oil in store brand products (Austria)||100%||100%||100%|
The objectives of the REWE Group guideline are part of a company pledge that the company signed in 2015 as a member of the Forum for Sustainable Palm Oil (FONAP). Members of the forum have committed themselves to using only sustainably certified palm oil, palm kernel oil and their derivatives and distillates in their products. The traceability of palm oil used is to be ensured over the long term with adherence to additional defined criteria in order to meet the ambitious goals set as part of the voluntary commitment. This work also involves purchasing palm oil that is subject to the demanding trade model of segregation. In this process, sustainably produced oil is continuously separated from non-certified oil along the entire supply chain. In consideration of the individual goals for each palm (kernel) oil product, REWE Group attained a total achievement level of 99 per cent with all store-brand products in Germany in 2018.
REWE Group in Germany is working with its suppliers to achieve the last per cent needed to achieve the goal. The requirements pose a special challenge to small suppliers with complex supply chain structures. For instance, some suppliers could only make the switch to the segregation trade model gradually because of the very expensive work that goes into setting up separate product streams. This is particularly the case when a supplier switches only a small amount of his total production. In Austria, REWE Group has made major strides in its effort to use certified palm oil. In consideration of the individual goals for each palm (kernel) oil product, REWE Group attained a total achievement level of over 95 per cent with all store-brand products in Austria in 2018.
A major amount of global raw cocoa comes from Western Africa. The production work is primarily done on small, family-run farms. Cocoa farmers have to battle difficult business conditions there and frequently live with their families below the poverty level. This results in a lack of the necessary funds for investment and poor working conditions in many cases. In turn this leads to exploitative forms of child labour (for more information see the section (Child Labour and Forced Labour). In a policy document called the Guideline for Cocoa, REWE Group formulated the goal of purchasing all raw cocoa supplies for its store brands from more sustainable farming structures by the end of 2015. This is assured by applying the standards Fairtrade, Fairtrade Sourcing Programme, Rainforest Alliance and UTZ. By the end of the deadline on 1 January 2016, REWE Group in Germany was unable to achieve this goal. The percentage of certified cocoa used was 99 per cent in 2017 and remained at this level in 2018. REWE Group in Germany is working with its suppliers to achieve the last per cent needed to achieve the goal. One major challenge for some suppliers involves switching only small amounts of the total production to the certified product. At REWE Group in Austria, approximately 99 per cent of raw cocoa supplies for store brands were certified in 2018.
|Store brand products in Germany containing cocoa||94 %||99 %||99 %|
|Store brand products in Austria containing cocoa||-||80 %||99 %|
Orange growing and orange juice production involve complex societal and environmental challenges. These include financial problems for small farmers, precarious employment conditions, the use of pesticides and high levels of energy consumption. REWE Group is committed to more sustainable production of orange juice, cooperating with others to improve the social, environmental and economic conditions surrounding orange juice production. To achieve this, the company purchases sustainably produced orange juice products, is involved in origin projects and industry-wide dialogue and promotes transparency throughout the supply chain. In the spring of 2019, the store brands REWE Beste Wahl (REWE) and Paradiso (PENNY) introduced 100 per cent Fairtrade-certified orange juice that is traceable to its producer organisations. With sale proceeds from this orange juice, REWE Group is supporting a project in Brazil to improve local working conditions. In 2019, REWE Group published a Guidelines document for orange juice stating that the REWE and PENNY store brands will switch to 100 per cent certified orange juice by the end of 2025. The Group utilises the Fairtrade and Rainforest Alliance certifications and the EU Organic Seal of Approval to mark this change. In addition, customers will have access to information on the origin of individual orange juice products to create pressure for higher wages in the orange juice supply chain.
Coffee is a globally traded product and its farming is an important economic sector for many countries in Latin America, Asia and Africa. But the yields of the small farms that produce the beans are frequently too tiny to produce an income from which coffee farmers and their families can live. Added to this are the health and environmental risks posed by the incorrect use of pesticides. To improve the lot of coffee farmers, REWE and PENNY set themselves the goal of switching all of their store brands to certified coffee by the end of 2020. In 2018, the percentage of coffee certified organic or by UTZ, the Rainforest Alliance or for Fairtrade rose to 71.4 per cent, from 69.4 per cent in 2017.
|REWE and PENNY (Germany)||61.7 %||69.4 %||71.4 %|
Conventional tea farming is frequently monoculture farming that involves heavy use of pesticides. This endangers biodiversity and the drinking water supply for people who live in the cultivation areas. Local workers also face a number of challenges, including low wages and inadequate occupational health and safety practises. To address such issues, REWE Group promotes sustainable agriculture in tea production and purchases certified products that bear the Rainforest Alliance seal. In 2017, the share of certified tea products at REWE and PENNY was 19 per cent. The share rose to 31.7 per cent in 2018. REWE Group strives to continuously increase this percentage.
By the end of the 2018 reporting period, both REWE and PENNY had switched their green and rooibos teas to 100 per cent Rainforest Alliance-certified raw material. The process of switching the black tea segment from 50 over to 100 per cent Rainforest Alliance-certified raw materials was also completed in 2018.
|Tea products certified organic or by the Rainforest Alliance or for Fairtrade||14%||19%||31.7%|
|Rainforest Alliance-certified raw materials for green and rooibos teas
Rainforest Alliance-certified raw materials for black tea
Rising demand for fish and seafood has put the world’s fish stocks under severe pressure and resulted in over-fishing in some regions. In the company’s Guideline for Fish, Crustacean and Shellfish, REWE Group has pledged to increasingly purchase fish products from sustainable and certified fishing operations and aquaculture, and to transparently inform consumers about these efforts.
|Percentage of certified products (MSC, ASC, GGN)||86 %||88 %||90 %|
|Percentage of products with tracking code||85 %||81 %||67 %|
The REWE Group assortment in Austria includes roughly 400 MSC-certified fish products for both store brands and industry brands.
In conventional animal-husbandry practises, soybean meal imported from overseas countries is used to provide animals with sufficient amounts of protein. This meal frequently includes genetically modified types of beans. For this reason, REWE Group has drawn up a Guideline for Soy in Animal Feed that requires producers of store-brand products to abandon the use of genetically modified soybeans, among other requirements. This requirement is implemented on an individual basis for each species of farm animal. As proof that no GMO feed is being used, REWE Group in Germany works with the German Association of Non-Genetically Modified Foods (VLOG). As in the previous year, the entire range of fresh eggs at REWE Group in Germany bore the VLOG seal in 2018. For fresh milk and UHT milk, the share rose from 77 per cent in 2016 to 100 per cent in 2018. At REWE Group in Austria, the entire range of fresh eggs and fresh milk comes from non-GMO feed.
|Fresh milk and UHT milk||77 %||99 %||100 %|
|Fresh egg assortment||100 %||100 %||100 %|
For further information about the involvement of REWE Group in organisations and initiatives, see the section Initiatives and Memberships.