Sugar is an essential ingredient in many of our delicious snacks. We source the highest-quality sugar for our global operations from a number of countries. While sugar crops provide many benefits to growers and local communities, they are also sometimes associated with social and environmental issues, such as GHG emissions, water pollution and labor issues. This is why we are committed to responsibly and sustainably sourced sugar.
Our Sugar Supply Chain
Our sugarcane supply is mainly sourced from the U.S., Mexico and Brazil. We source sugarcane from other countries as well, such as Belize and India. Our sugar beet supply comes entirely from the United States. We typically source sugarcane and sugar beet from 15-20 direct suppliers.
Our Approach to Responsibly Sourced Sugar
Hershey is committed to a sustainable sugar supply chain that upholds the human rights of workers and local communities and protects and improves our shared environment. To achieve this, our responsible sourcing approach for sugar is based on three strategic pillars:
- Traceability: Building traceability to the mill and farm level to understand our footprint and opportunities for impact.
- Supplier Engagement, Monitoring and Verification: Engaging with suppliers to communicate our expectations and strengthen sustainability management while leveraging credible sector certification and verification schemes to monitor performance and drive continuous improvement across sustainability impacts in our sugar supply chain.
- Transformation: Investing in on-the-ground programs to support protection of human rights, GHG emissions reduction in line with our science-based targets, water stewardship, and the resilience and livelihoods of sugar growing communities.
To achieve a sustainable sugar supply chain, we work with our suppliers to trace where our sugar comes from to the mill level. This helps us better understand if the sugar we source is linked to areas or mills with sustainability concerns such as deforestation, water pollution or exploitation of workers, and to focus our engagement, programs and investments where we can make the biggest impact. We will begin to provide annual updates on our sugar tracing efforts on this website at the end of 2021 to give stakeholders visibility into our ongoing progress.
We expect all our sugar suppliers and business partners to ensure compliance with our Supplier Code of Conduct and all other relevant policies on the Environment and Human Rights. These policies outline Hershey’s expectations and guidelines with respect to responsible sourcing including our commitments to human rights, labor standards, the environment, health and safety, business ethics and the development of a diverse and sustainable supply chain. We also expect our sugar suppliers to communicate and cascade the Supplier Code of Conduct and relevant policies throughout their supply chains.
To verify that our sugar suppliers uphold these standards within their own business operations (usually covering the refinery level of the supply chain), we have enrolled all sugar suppliers in our Responsible Sourcing Supplier Program. As part of this program, all processing sites that provide sugar to Hershey are required to have an up-to-date Sedex Self-Assessment Questionnaire and SMETA 4-pillar audit (or equivalent). In addition, in 2021 we will initiate an annual survey of our direct suppliers’ sustainability and responsible sourcing practices and management systems.
To verify that our standards are upheld at the mill and farm level, we seek to leverage credible third-party standards and verification mechanisms, including the Bonsucro and Fair Trade certifications for our sugarcane, and Sustainability Agriculture Initiative (SAI) Platform's Farm Sustainability Assessment for both beet and cane sugar.
It is our goal to procure 100 percent of our sugar from sources certified or verified to a recognized sustainability standard covering the farm level by 2025.
Forty-four percent of the sugar sourced in 2020 was from sources certified or verified to a recognized sustainability standard covering the farm level of the supply chain, of which 16 percent was Bonsucro or Fair Trade certified mass balance, and 28 percent was conventional volume covered by Bonsucro credits.
Hershey joined Bonsucro’s sustainable sugarcane initiative in 2018 to address the many issues impacting sugarcane farmers and provide sustainably sourced cane sugar for our Hershey brands. We source 100 percent Bonsucro certified mass balance sugar for our plants in Canada and Brazil to meet the market demand for sustainable ingredients and to support the sector’s certified suppliers for their demonstrated commitment to ethical production.
When feasible, we also periodically source Bonsucro certified mass balance sugar for our plants in the U.S. and Mexico.
To further promote sustainable sugarcane production and support the sector’s certified suppliers, we also purchase Bonsucro credits to match the volumes of the conventional sugar we buy from international sources when Bonsucro certified sugar is not available in those locations. Certified sugar producers can create credits to increase the uptake of their Bonsucro certified sugar on the market if they are unable to find a local buyer and must sell it as conventional sugar. Bonsucro credits help to reward certified producers and also generate investment in improvement projects that Bonsucro operates with producers committed to improvement but not yet certified.
SAI Platform Farm Sustainability Assessment (FSA)
Hershey joined the SAI Platform in 2021 to further strengthen our approach to responsibly sourcing our priority ingredients, including sugar. Through the SAI Platform, Hershey accesses tools and resources and collaborates with other stakeholders across the agricultural value chain to advance sustainable agriculture practices globally. We will use SAI Platform’s Farm Sustainability Assessment (FSA) as another tool to assess, communicate and improve on-farm sustainability in our supply chain. We will ask and support our suppliers to work with their farms to achieve one of the three levels of performance within the scheme—bronze, silver and gold—which represent increasingly advanced implementation of sustainable farming practices.
Hershey has partnered with our supplier, American Sugar Refining (ASR), to implement “Learn to Grow” programs in Belize and Mexico that deploy a farmer field school model to help farmers in our supply chain in those countries learn about and implement more sustainable growing practices. Our first program in Belize, where we also partner with Belize’s Sugar Industry Research and Development Institute, started by providing 12 training modules over 20 months on best management practices for sustainable production and focusing on improving soil health, pest management and efficient application of fertilizers and herbicides. The program also promotes a no ‘re-burning’ approach to reduce greenhouse gas emissions and improve soil quality.
In 2017, Hershey and ASR implemented a second phase of the program focused on cane quality and improving farmer incomes. Sugarcane farmers earn income based on the sugar content in their cane crop, a metric which is impossible to determine when looking at cane from the outside. This second phase uses cutting-edge technology to analyze cane samples and help farmers determine the optimum time to harvest their cane, capturing the most sugar content and the most income. With this approach, the program also helps farmers harvest more sugar and increase incomes without increasing land use or fertilizer use, providing further environmental benefits. During the past three years, just under 5,000 farmers have participated in the program and benefited from increased yields while lowering their environmental impact.
Based on the success of the program in Belize, in November 2019, Hershey and ASR launched a second Learn to Grow sugar program in Mexico. This program is adopting a similar approach to our Belize initiative to improve the cane quality and sugar yields to increase farmer revenue and increase adoption of more sustainable growing practices. It will also support farmer certification to the Bonsucro standard for the sustainable production of sugarcane.
In 2019 and 2020, our program in Belize also supported three new initiatives to enhance environmental stewardship and protect the rights of sugarcane workers:
- First, we are supporting one of the participating farmer associations to establish a tree nursery, which will help to promote biodiversity and restore natural ecosystems in areas that have been cleared or are not suitable for sugarcane cultivation, as well as to create buffer zones around water bodies that might be near production sites.
- Second, we are supporting a trial project to explore the use of cover crops to improve soil fertility in several cane fields with degraded soils, with the goal of reducing the need to clear new land for sugarcane cultivation and the associated negative impacts on climate change.
- Third, to prevent child and forced labor, we have supported four cane farming associations to develop a standard cane cutters’ labor contract that stipulates good labor conditions and clearly documents the labor services, remunerations and responsibilities between harvesting group leaders and cane cutters. Training is being provided to all harvesting group leaders to fully interpret and execute the contracts. The program also procured proper Personal Protective Equipment, including 1,800 sets of shin guards and goggles, for all cane cutters in the Belize sugar industry.
Following a severe drought in Belize during the 2020 crop season which negatively impacted cane quality and sugar yields, we have collaborated with ASR to extend our Learn to Grow program there for another three years, with a new focus on helping farmers better adapt to changing weather and pest patterns driven by climate change. We will accomplish this by coaching young adults in the community to assist farmers in accessing and utilizing technology to be able to predict these changing weather and pest patterns and providing farmers with further training on best management practices to respond to these challenges.
We are currently in the process of evaluating further opportunities through Bonsucro and other potential partners to support the development of more sustainable practices in our sugar supply chains in the US, Mexico, Brazil and India.