May 21, 2010 Today Asda exclusively launches the world’s first Rainforest Alliance Certified bouquet, guaranteeing that the flowers have been grown according to the organization’s strict principles on environmental protection and workers rights. By stocking the bouquets, the supermarket is helping small-scale and family run Kenyan farms ensure they are environmentally and socially responsible, while offering them the opportunity to enter the British flower market.
This type of collaboration is exceptionally rare, more often existing within tea, coffee and cocoa and Asda’s commitment highlights how the certification can work for small scale producers as well as big plantations. As part of the Rainforest Alliance certification, farmers commit to growing their flowers in a way that improves the productivity of their soil, while protecting rivers and ensuring their farms also provide habitats for wildlife. With the exclusive launch of the new bouquet, the farmers are developing the skills, access and resources required to sell their flowers in these luxury bouquets. Thanks to support from the Rainforest Alliance and Asda, the livelihoods of these small farmers will be significantly improved.
Chris Brown, head of ethical and sustainable sourcing at Asda says, “Asda is proud to be able to offer this bunch of flowers. To have Kenyan smallholder farmers growing flowers to Rainforest Alliance sustainability standards in collaboration with ourselves shows what can be done. The flowers look fantastic.”
This pilot project differs slightly from the other New Business Model Pilot chains in that the smallholders involved were already exporting successfully to modern markets through the business Wilmar Naturegrown in
Modern markets involving fresh produce, both international and domestic, offer great economic development potential for those who can participate in the value chains that offer routes to these markets. However, the ability to capture the benefits from these market opportunities is unequally distributed, with many smallholders experiencing significant barriers to access. These include imperfect information and a lack of support, particularly in relation to technology, agricultural services and access to credit and financing.
Wilmar Naturegrown is a flower-growing business established by Wilfred Kamani in 1995. It is now the largest exporter of smallholder flowers in
In May 2008 Andy Bond, President and CEO of Asda, pledged to source an additional £30 million worth of fresh produce from African farmers over the next five years. This was announced at Africa Millennium Goals Summit hosted by Prime Minister, Gordon Brown.
As part of its pledge, the retailer increased the amount of Kenyan flowers it sourced by 20% by the end of 2008. It also purchased significantly more bananas, citrus fruits, mangoes, and avocadoes from African farms.
Bond commented that “We are integrating
We don't claim to have all the answers, but we believe signing the Millennium Development Pledge is an important step. Whilst the vast majority of our produce will always be sourced locally, as a major
This pledge provides real potential for partnerships to be forged that that are both commercially viable and help to achieve the Millennium Development Goals (MDGs).
Wilmar provides both a route to market for smallholders’ flowers and the support they need to grow flowers. He gives them free technical advice and seeds on the basis that they agree to market their produce through him. These smallholders then earn an extra $250 a year, on average. It provides a key service to various non governmental organizations (NGOs) who create farmer groups, for example
The relationship between Wilmar Naturegrown and ASDA functions through Intergreen, a flower exporter ASDA currently uses, to reduce the transaction costs involved in creating new market links and different exporters.
What are the benefits to ASDA of this relationship?
The benefits of ASDA of this relationship are substantial. This pilot project provides an ideal opportunity for both producers and buyers. For the buyer it provides an introduction into sourcing from smallholders based on an existing commercial model. Despite the business already being successful, it still has the ability to reach many more smallholders, who as yet are not selling into modern markets. If market opportunities are realized through these ‘smallholder flowers’, then the number of Kenyan smallholders included in these high-value supply chains can also be significantly up-scaled. The sourcing of flowers from smallholders (creating smallholder-only bunches of flowers as complete products) would be a unique value proposition for ASDA and its customers. It would allow the supermarket to make a unique statement – that it sources it flowers from smallholders and is honoring its pledge to make efforts to help meet the MDGs.
Not only is the relationship valuable from a development point of view, it is also valuable to ASDA’s bottom line. The relationship will inevitably improve ASDA’s corporate social responsibility (CSR) profile and reputation. Re-structuring their supply chain could also enable innovations to be brought about in the form of new products and new supply chain organisation, bringing about new efficiency improvements.
What are the potential problems?
As well as demonstrating the potential for commercially viable and development-significant relationships to be forged between large retailers and dispersed smallholders, this project also highlights some of the potential problems that can be faced when trying to link small-scale farmers to modern export markets.
There were concerns around volumes of flowers wanted by ASDA. The