Sustainable Agriculture

Agriculture is the world’s largest industry, employing more than 1 billion people and generating more than $1 trillion of food annually. With the wide-scale adoption of better management practices, agricultural production can help preserve and restore critical habitats, protect watersheds and improve soil and water quality while meeting the needs of society.

Our Company has an opportunity to advance more sustainable farming practices. As a general rule, we do not own or operate farms, and we buy only a small percentage of our ingredients directly from farmers. But our system is a major buyer of fresh fruit, corn, tea, sugar, coffee and other ingredients. Our global scale and long-standing working relationships with suppliers and processors give us an influential voice—and we are using it to help effect change.

The World Economic Forum (WEF) and McKinsey & Company estimate that up to 30 percent of greenhouse gas emissions are attributable to agriculture, counting all related impacts, including deforestation. Agriculture accounts for 70 percent of worldwide water withdrawals. Agriculture both contributes to and is impacted by environmental stress. To read more, please visit the “Realizing a New Vision for Agriculture: A roadmap for stakeholders” report. At Coca-Cola, our approach to sustainable agriculture is multidimensional and founded on principles to protect the environment, uphold workplace rights and help build more sustainable communities. Our sustainable agriculture strategy focuses on agricultural ingredients within the Company’s supply chain and seeks to:

• Mitigate risk by working with partners and suppliers to address challenges to the availability, quality and safety of agricultural ingredients
• Meet consumer demands for healthy and sustainable lifestyles
• Balance costs with the overall value proposition by leveraging relationships and partnerships as well as by initiating new opportunities where they make sense for the supply chain

We are carrying out our strategy by working with key partners to identify risks and opportunities; fostering innovation through pilot projects in key regions; and making use of validation mechanisms—including certification in some cases—to verify that we are meeting our sustainability criteria.

Agricultural products are ingredients in almost all of our beverages, so the health of our business depends on the health of our agricultural supply chain. Our global system and vast supply chain provide countless opportunities to improve agricultural sustainability. We have adopted a holistic view and are working with our suppliers to help develop and encourage more sustainable agricultural practices.

With partners such as WWF and United Nations Development Programme (UNDP), we have contributed to 27 sustainable agriculture initiatives in 22 countries. The projects we are a part of are improving livelihoods for farming families, increasing crop yields while reducing costs and reducing environmental impacts. Here are summaries of three recent projects.

Farming for a healthier Great Barrier Reef

Innovations by Queensland’s sugarcane farmers are the focus of Project Catalyst, an award-winning, five-year, $26 million partnership among our Company, WWF, Reef Catchments (Mackay Whitsunday Natural Resource Management), the Australian government and others. The overall aim of the project is to foster farmer innovation to create more sustainable solutions for the community of sugarcane farmers, the Great Barrier Reef and the freshwater catchments that drain into the reef by reducing fertilizers and pesticide runoff. Project Catalyst is providing funding and technical expertise to farmers who have developed new practices focused on sustainability and need resources to catalyze implementation. Communication is a key part of Project Catalyst; the project team has developed newsletters and a website to share innovations among sugarcane growers, with the expectation that growers can share best practices and lessons learned, facilitating knowledge transfer and broader adoption of the practices.

Launched in 2009, Project Catalyst has increased from 19 participating cane growers and 4,800 hectares of farmland to 53 growers and more than 15,000 hectares. The project has improved the quality of more than 77,500 million liters (more than 20 billion gallons) of runoff by reducing the amount of nitrogen, phosphorous, herbicide and other pollutants flowing into the Great Barrier Reef. Through The Coca-Cola Foundation, our Company has contributed more than $1.7 million to the project.

Drought relief for farmers and communities in Guangxi

The Guangxi Sustainable Sugarcane Initiative is a five-year, $3.5 million partnership with UNDP, the Chinese government and the government of the Guangxi Autonomous Region in southern China. The project seeks to provide sugarcane farming communities in drought-stricken Guangxi with improved access to drinking water and more efficient irrigation. New infrastructure will treat wastewater from sugar mills and direct it to cropland, providing irrigation and possibly better yields as a result of nutrients in reclaimed water. The project team will also install wells, pipes and disinfection equipment to provide farming families with greater access to drinking water.

Launched in 2010, the project is expected to affect the lives of more than 100,000 rural residents, particularly women and children. It is expected to replenish at least 500 million liters of water annually, improve approximately 184,000 acres of sugarcane and inform the development of better sustainable agricultural practices throughout China. Through The Coca-Cola Foundation, our Company will contribute a total of $500,000 to the project.

Protecting freshwater and small farms in South Africa

A project aimed at small-scale cane growers in the KwaZulu-Natal region of South Africa seeks to leverage the mentorship program of the Noodsberg Cane Growers Association for disadvantaged and previously disadvantaged smallholder farmers. Efforts focus on creating well-planned farms that improve yields and livelihoods while reducing and mitigating environmental impacts. The Coca-Cola Foundation provided a $150,000 grant to help strengthen and expand collaboration between commercial farmers and smallholder farms.

Launched in 2011, the program seeks to train smallholder farmers in better management practices while improving catchment management. It will support development of more than 100 smallholder growers on 100 hectares and organize smaller farms into two cooperatives to help improve productivity and seed production. Commercial farmers will work with smallholder farmers to maintain and restore riparian areas and increase pesticide use-efficiency. The project also seeks to remove invasive plant species threatening freshwater ecosystems and to develop improved sustainable practices that can be adopted by other South African sugarcane growers.

In addition to the projects in Queensland, Guangxi and KwaZulu-Natal, we have recently engaged in the following partnerships:

• A joint effort with WWF, United States Agency for International Development (USAID), sugar suppliers and others to encourage sugarcane mills and farms in El Salvador and Guatemala to voluntarily adopt the Bonsucro sustainability standard and industry best practices for water stewardship.
• Development of a lab in La Lima, Honduras, where researchers will develop solutions for controlling agricultural pests in cane fields through biological control rather than pesticides. The lab—developed in partnership with WWF, The Hondoran Foundation of Agricultural Research and the AZUNOSA sugarcane mill and refinery—is expected to produce enough biocontrol to treat 6,500 hectares by its third year and help reduce the agrochemical runoff that imperils the Mesoamerican Reef—the largest reef in the Atlantic Ocean.
• We are formalizing a policy within our system for sourcing more sustainable paper and paperboard fiber to ensure that our packaging comes from well-managed forests or recycled material. Our policy is also aimed at promoting markets for responsibly grown forest products.

We are also continuing our participation in two major initiatives reported in our last sustainability report, the 2009/2010 Sustainability Review—the Haiti Hope Project and Project Nurture, both multi-partner initiatives aimed at increasing sustainable agriculture and improving the lives of farming families. Our water stewardship programs increasingly address sustainable agriculture as well.