Dairy Sourcing
Fresh dairy milk is an important ingredient in Hershey’s iconic milk chocolate. Dairy production supports tens of thousands of farmers across the U.S. and can play an important role in enhancing soil health.
However, without proper stewardship, it can also generate significant carbon emissions, lead to polluted water resources, and contribute to human rights and animal rights abuses. This is why Hershey is committed to responsible and sustainable dairy sourcing that positively impacts our shared environment and ensures the health and wellbeing of workers and animals.
Our Approach to Responsibly Sourced Dairy
While we are at the start of our dairy sustainability journey, we have long-held codes and policies to support responsible dairy production, including our Supplier Code of Conduct and other relevant policies on the environment, human rights and animal welfare. We also endorse the 11 key sustainability criteria and strategic intents of the global Dairy Sustainability Framework (DSF) and expect our dairy suppliers to work with us to deliver on this vision of sustainable dairy.
Our approach to implementing our sustainability commitments in our dairy supply chain focuses on:
- Supplier Engagement, Monitoring and Verification through the Sustainable Agriculture Initiative (SAI) Platform Sustainable Dairy Partnership (SDP): We leverage the SDP to engage with and build the capacity of our dairy suppliers to strengthen their sustainability management approach, monitor performance and drive continuous sustainability improvements across our dairy supply chain
- Transformation: We invest in on-farm programs in our dairy supply chain to support water stewardship, GHG emissions reduction in line with our science-based targets, and other sustainability objectives
Our Dairy Supply Chain
Most of the fluid milk that goes into our products is sourced within a 100-mile radius of our chocolate manufacturing plant in Hershey, PA. We also source milk-derived ingredients from suppliers across the U.S. as well as New Zealand, and from suppliers in Brazil, India and Mexico for our operations in those countries.
Supplier Engagement, Monitoring and Verification through the Sustainable Dairy Partnership
To verify compliance with our sustainability policies in our dairy supply chain and to engage with our suppliers in their journey towards more sustainable dairy production, we will leverage the Sustainable Agriculture Initiative Platform (SAI Platform) SDP.
The SDP builds on the Dairy Sustainability Framework to provide a unified sustainability approach for use in commercial relationships between corporate dairy buyers, like Hershey, and their suppliers. It is a collaborative effort that includes sustainability requirements that must be met by dairy processors and supplying farms as well as an assurance model including third-party verification and progress reporting. The SDP requirements are organized into five stages that are designed to ensure that dairy processors are progressively building and improving management systems that include setting sustainability goals, implementing programs and reporting on progress. We will use this framework and system as the foundation for ongoing dialogue and engagement with our dairy suppliers with the goal of supporting continuous improvement.
We will provide annual updates on our efforts to source volumes from dairy suppliers enrolled in and assessed through the SDP on this website to give stakeholders visibility into our ongoing progress.
In addition to leveraging the SDP, we will continue to endorse the work being done by national industry initiatives such as the National Dairy FARM (Farmers Assuring Responsible Management) Program in the US. We expect all US dairy farms supplying raw milk and other dairy products to Hershey to be enrolled and in good standing in the FARM Animal Care program in order to demonstrate compliance with our Animal Welfare Position Statement, and encourage our US supplying farms to also participate in the FARM Program’s Environmental Stewardship, Antibiotic Stewardship, and Workforce Development program modules. The SDP is designed to leverage work already being done as part of such industry initiatives, voluntary certifications and regulatory compliance, and farm participation in such programs will all be considered as part of the SDP’s assessment of processors.
Lastly, to help verify that our dairy processors uphold Hershey’s sustainability standards within their own processing operations, we are enrolling all dairy ingredient suppliers based in high-risk sourcing regions in our Responsible Sourcing Supplier Program. As part of this program, all such processing sites that provide dairy ingredients to Hershey are required to have an up-to-date Sedex Self-Assessment Questionnaire and SMETA 4-pillar audit (or equivalent).
Transformation
In order to help our suppliers accelerate their efforts on sustainability and contribute to the achievement of our goals, we are also committed to investing with our suppliers in interventions at the field level focused on our priority issues.
In 2021, in collaboration with Land O’Lakes, our highest-volume dairy supplier and strategic partner, and the Alliance for the Chesapeake Bay, we have launched a three-year pilot program, Sustainable Dairy PA, to reduce GHG emissions and protect water quality across dairy farms in our Pennsylvania supply chain. Through this program Hershey will provide funding to support the implementation of manure storage facilities, soil health practices, riparian forest buffers and other efforts to enhance sustainability on our supplying farms. We are currently in the process of evaluating further opportunities to support the development of more sustainable practices.
In addition to our partnerships to drive progress in our supply chain, we also seek to collaborate with key stakeholders across the dairy industry. For example, we are members of initiatives like the Dairy Sustainability Alliance, an initiative organized by the Innovation Center for U.S. Dairy to accelerate progress toward common sustainability goals and contribute to the long-term viability of the U.S. dairy industry.
