Raw Materials in Focus – Food

The supply chain links of raw materials production and processing involve particular environmental challenges and a heightened risk of non-observance of labour and social standards. Therefore, these areas are the focus of REWE Group activities. Within the scope of its Product-related Risk Analysis, the Group has identified the following raw materials in the food area as critical: fruit and vegetables including at-risk crops such as bananas, meat and dairy products including animal feed, as well as coffee, cocoa, juices (formerly orange juice), tea, palm oil and fish.

These critical raw materials in the food area are assigned to the three areas of action – people, animals and the environment – within the Green Products Strategy 2030. Within the framework of these areas of action, the REWE Group develops effective measures to reduce the environmental and social impacts and create positive effects – activities related to the focus raw materials in the food area play a special role here.

The REWE Group works continuously to ensure that social and environmental factors as well as animal welfare aspects are taken into consideration in its supply chains. The REWE Group observes internationally recognised certification standards, cooperates in industry initiatives, launches its own projects and formulates requirements within the framework of guidelines and the PRO PLANET process. The approaches for individual critical raw materials are outlined below.

Since 2013, the REWE Group, in its framework agreement, has required suppliers of primary agricultural products in the area of fruit and vegetables to agree to comply with the core labour standards of the International Labour Organisation (ILO), within the respective framework of applicable national laws. This also includes the proper legal payment of at least the statutory, negotiated or contractually set wage. Suppliers must be able to provide proof that both requirements are met. They are also required to ensure that their own suppliers also meet these requirements. All producers of fruit and vegetable products must demonstrate that they meet the requirements cited above by undergoing external audits (such as GLOBALG.A.P Risk Assessment on Social Practice, (GRASP), SA8000, Rainforest Alliance or amfori BSCI). This is checked on a risk basis as part of social compliance monitoring.

In addition to social aspects in fruit and vegetable production, the REWE Group is also committed to reducing environmental impacts. This includes promoting biodiversity through specific projects, for example concerning fruit and vegetable farming in Germany, requirements for the use of pesticides and close cooperation with standards such as GLOBALG.A.P., Rainforest Alliance or Fairtrade.

The increased cultivation of palm oil is leading to the loss of peat forests and rainforests. In many cases, this is destroying the livelihoods of local populations, and the habitats of valuable animal and plant species are being lost. The clearing of rainforests is also releasing huge amounts of carbon dioxide.

Against this backdrop in July 2021, the REWE Group, with its new Guideline on Palm Oil and Palm Kernel Oil Products, formulated the goal to exclusively use sustainably produced palm oil for all private labels containing palm (kernel) oil which are sold in Germany and Austria. To ensure this, the company relies primarily on the certification standard of the Roundtable on Sustainable Palm Oil (RSPO), of which it has been a member since 2011. REWE and PENNY in Germany have already been using 100 per cent certified palm oil since 2013. The Lekkerland sales line has also exclusively been using certified palm oil in its private labels at least since its merger with the REWE Group in 2020. In Austria, the REWE Group has also only been purchasing certified palm oil since 2013, and its brand Ja! Natürlich has been completely palm oil-free since 2018.

The goals of the REWE Group guideline are also part of a company pledge which the REWE Group signed in 2015 as a member of the Forum for Sustainable Palm Oil (FONAP). Members of the FONAP have committed themselves to using only sustainably certified palm oil, palm kernel oil and their derivatives and fractions in their products. The traceability of palm oil used is to be ensured over the long term through the ambitious goals set as part of the company pledge as well as adherence to additional defined criteria. This also involves purchasing palm oil through the demanding trade model of segregation. In this process, RSPO-certified product is continuously separated from non-certified product along the entire supply chain. In consideration of the individual goals for each palm (kernel) oil product, REWE and PENNY in Germany attained a total achievement level of 99 per cent with all private label products in 2021. The two sales lines are working together with their suppliers to achieve the last per cent to complete the ambitious goals set as part of the company pledge. 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 the setting up of separate product streams is very expensive. This is particularly the case when a supplier switches only a small amount of its total production. At the REWE Group in Austria too, any palm oil and palm kernel oil used in private label products is RSPO-certified and, apart from a few exceptions, is purchased via the segregation trade model.

From 2018 to 2021, the REWE Group supported a cooperation project between the FONAP and the Malaysian non-government organisation Wild Asia in order to increase transparency in the palm oil supply chain. In the first project phase, selected small farmers in the Perak/West Malaysia region tested the applicability of additional FONAP criteria. These included, for example, stopping usage of highly dangerous pesticides or implementing strict reduction targets for greenhouse gases. This enabled them to develop a better understanding of the importance of biodiversity and demonstrate that organic production without the use of pesticides is possible – and can even bring higher yields. As part of the second project phase, from the end of 2019 until March 2021, the small farmers were given support to trace their products. An app records the transactions of certified small producers and palm oil traders. This enables the traceability of certified palm oil to be displayed seamlessly. This is intended to give the small farmers better access to the market, since transparency in the supply chain is an increasingly important requirement for the sale of raw materials.

A large share of global raw cocoa production originates from West Africa and primarily takes place in small family farms. The cocoa farmers there have to contend with difficult economic conditions and often live with their families under the poverty line. Consequently, there is lack of necessary investment funds and poor working conditions are common. In turn this leads to exploitative forms of child labour (for more information, see Child Labour and Forced Labour).

In its Guideline on Cocoa Products, the REWE Group formulated the goal of sourcing all raw cocoa supplies for its private labels from more sustainable farming structures by the end of 2015 – ensured by using the standards of Fairtrade, the Fairtrade Sourcing Program and the Rainforest Alliance. By the end of the 2021 financial year, 99 per cent of the raw cocoa being used for the private labels of REWE and PENNY was certified. The missing per cent is largely down to suppliers who process small quantities of cocoa as they often have difficulties in sourcing certified cocoa. Due to this, the REWE Group has so far been unable to achieve its additional goal of reaching 100 per cent by the end of 2020 for REWE and PENNY private labels in Germany. The REWE Group is continuing to work on this. At the REWE Group in Austria, all raw cocoa supplies for private labels were certified in 2021. In order to make a permanent contribution to improving local living conditions in the cocoa sector, the REWE Group set itself a further goal in 2018: the complete switchover of chocolate products, instant cocoa, nut/nougat spreads and sweet baked goods of private labels as well as all organic private labels which contain cocoa ingredients at REWE and PENNY in Germany to Fairtrade or the Fairtrade cocoa programme by the end of 2020. This goal has been achieved.

In cooperation with the German Federal Ministry for Economic Cooperation and Development as well as Fairtrade, the REWE Group launched a project for a living income in the cocoa sector: the Fairtrade chocolate bars from this project were sold at REWE and PENNY from mid-2021. The cocoa beans used for the cocoa mass from which these chocolates are produced can be completely physically traced (for more information, see Living Wages and Income).

Many of the fruits processed into juices and juice products come from tropical and subtropical regions. There, but also in Europe, cultivation in monocultures, clearing for the plantations as well as a high use of energy, pesticides and fertilisers are having a negative impact on the environment and biodiversity. Particularly in tropical and subtropical countries, the living and working conditions of small farming families or pickers are often precarious or even dangerous. This leads to human rights violations – including child labour and forced labour, poverty-level incomes or lack of occupational health and safety. Such violations can also take place in Europe.

In its Guideline on Juices, revised in 2022, the REWE Group has formulated the goal of certifying 50 per cent of all private label juices, nectars and fruit juice drinks at REWE and PENNY in Germany (not including promotional, seasonal and regional products) for the Rainforest Alliance, Fairtrade, Naturland, the organic logo/label, SAI FSA bronze/silver/gold or GLOBALG.A.P. by the end of 2025. In 2020, the REWE Group had already achieved the goal of switching orange juice (both from concentrate and not from concentrate) to Rainforest Alliance or organic certification by 2025. Since the end of 2018, pineapple juice has also only been available from REWE and PENNY if it is certified.

Through cooperation with standards organisations and certification systems, the REWE Group is ensuring that resources are cultivated more sustainably in the defined risk countries. With projects such as the one being carried out in the largest European apple-growing region in Poland, it is ensuring greater biodiversity; see Biodiversity. In other projects, the REWE Group is championing, amongst other things, farmers in the Brazilian citrus belt. Through four Fairtrade small farmer organisations, 260 farmers, workers and technical advisors are receiving on-site training on more sustainable cultivation practices, the improvement of health and safety conditions and the strengthening of organisation structures for greater self-determination. Other parts of the project include integrated pest control, tree disease management and soil protection. As part of the project, products for the private labels Paradiso and REWE Beste Wahl were developed in the REWE and PENNY sales lines, through which this commitment can be traced from the origin to the shelf.

Since 2016, the REWE Group, as a member of Europe's Sustainable Juice Platform, has also been campaigning for social and environmental improvements in the supply chains of the fruit juice industry. Together with the Sustainable Juice Platform, the REWE Group has supported the creation of the Living Wage Report of the Global Living Wage Coalition on living wages in orange cultivation in Brazil. The company is actively working to improve the local wage situation.

The cultivation of coffee, as a globally traded commodity, is an important industry in many countries in Latin America, Asia and Africa. However, the yields of the mostly small farms are often too low to ensure a sufficient income for coffee farmers and their families. Added to this are health and environmental risks through the improper use of pesticides. In order to improve the situation of coffee farmers, REWE and PENNY in Germany set the goal of switching their private labels to coffee which is 100 per cent certified for the Rainforest Alliance, the organic logo/label or Fairtrade by the end of 2020. This goal was already achieved in 2019.

With its coffee private label, Lekkerland is also contributing to sustainable cultivation: The coffee beans of the Coffee Bean Company are Rainforest Alliance-certified and therefore stand for environmentally conscious land use and socially responsible business practices.

Conventional tea plant cultivation often takes place in monocultures with 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 practices. Against this backdrop, the REWE Group promotes more sustainable agriculture in tea production and purchases certified products which bear the Rainforest Alliance seal in particular, but also the Fairtrade mark or the EU organic logo.

The REWE Group set itself the goal of ensuring that 100 per cent of the raw material contained in all black and green tea products is certified. This goal was achieved by the end of 2018. In addition, all herbal and fruit tea products (including rooibos tea) are to be certified by the end of 2025 and at least 30 per cent of the raw material contained therein is to be certified. The aim is to continuously increase the percentage of certified raw material in each product. The REWE Group summarised these goals along with the challenges and actions in its Guideline on Tea Products.

Global fish consumption is constantly rising and is currently around 20 kilograms per capita per year. Fisheries and aquaculture provide some 60 million people with a livelihood. The flip side is that fish stocks are suffering from overfishing, with some species even being threatened with extinction. Undesired bycatch can lead to the loss of biodiversity and an alteration of the composition of marine ecosystems. Aquaculture also has to contend with environmental issues.

The REWE Group wants to actively contribute to reducing and eliminating environmental, social and economic impacts in the supply chain of fish and seafood. For this purpose, the company has formulated the following goals for the private label products of REWE and PENNY in its Guideline on Fish and Seafood, which was updated in 2022: the certification of all private label fish products in the areas of deep frozen, convenience, fresh and tinned in Germany for the Marine Stewardship Council (MSC), GLOBALG.A.P., the Aquaculture Stewardship Council (ASC) or organic certification, if available. When it comes to purchasing certified products, the REWE Group is dependent on the agreements of neighbouring countries regarding fishing quotas. Situations can arise which lead to the withdrawal of certifications such as the MSC for individual fish species. The REWE Group therefore advocates for political agreements. Also, in the long term, the packaging of all fish mono-products will be marked with a tracking code providing customers with detailed information on where the fish was sourced and how it was processed.

The product range (private labels and industry brands) of the REWE Group in Austria comprises around 400 MSC-certified fish products.

Meat is an integral part of eating habits today. Consequently, the production of animal products is a significant branch of agricultural output. The REWE Group advocates for animal-appropriate husbandry here. For this purpose, the company works together with business partners and suppliers to implement binding standards and promotes dialogue between all partners to counteract negative impacts in terms of animal welfare. As an additional approach, the Group also offers, for example, vegan private labels to accompany the dynamic trend towards a vegan diet. In the Guideline on Animal Welfare which was updated in 2022, the company defines specific measures and goals. For more information about this, comprehensive insights into the strategic approach as well as the specific goals and measures, see Animal Welfare.

In conventional animal husbandry, soybean meal imported from overseas is frequently used to ensure the animals have a sufficient supply of protein. Since the land-intensive cultivation of soybeans is having drastic consequences for the environment, especially in South America, the REWE Group is continuously analysing all supply chains which use large amounts of soy with regard to the ecological balance. The goal is to gradually reduce the amount of soybean meal imported from overseas and – where it cannot be substituted – to switch to certified deforestation-free soy. The REWE Group defined this back in 2013 in its Guideline on Soy in Animal Feed .

Since the end of 2019, the entire Germany-wide private label product range at REWE and PENNY for fresh eggs, milk and poultry has been certified as deforestation-free. Since the end of 2021, this is also true of the private label product range for pork and beef. The company has also set a new goal during the financial year: 100 per cent deforestation-free feed for dairy products and processed meat products with a meat content of over 50 per cent by the end of 2025. Here, the REWE Group relies on recognised standards such as ProTerra, ISCC+, Donau Soja / Europe Soya and RTRS. Contractual agreements with suppliers are documented through appropriate evidence.

The commercial company also carries out specific projects in the countries of origin. As a founding member of the Donau Soja association, the REWE Group, in cooperation with more than 250  armers, has supported the cultivation of over 79,000 tonnes of certified deforestation-free soy in Croatia and Serbia since 2015.

The soybean meal imported from overseas often comes from genetically modified varieties. The REWE Group has therefore defined soy that is free of genetically modified substances as a requirement for the producers of private label products in its Guideline on Soy in Animal Feed. This requirement is implemented individually for each species of farm animal.

As proof that particular feed has not been genetically modified, the REWE Group in Germany uses, amongst other things, the seal of the Verband Lebensmittel ohne Gentechnik e. V. (VLOG) (German Association of Non-Genetically Modified Foods). The VLOG standard is proven by the relevant certificates of suppliers. In addition, no genetically modified feed is used for organic products of animal origin.

As was already the case in 2019 and 2020, the percentage of private label products at REWE and PENNY in Germany bearing the VLOG seal for fresh poultry, the fresh egg product range as well as fresh milk and UHT milk was 100 per cent in 2021. Also, the feeding of animals with non-genetically modified feed is assured for all meat products originating from husbandry levels 3 and 4. For the REWE sales line there is also three regional and national pork programmes at husbandry level 2 which guarantee that feed is free of genetically modified substances. At the REWE Group in Austria, the entire fresh eggs and milk product range uses non-genetically modified feed.

For more information about the REWE Group’s involvement in organisations and initiatives, see Initiatives and Memberships.