Focus on sustainable raw materials
Not only did Uelzena expand its raw ingredient base and product diversity in the reporting year, the company also advanced important sustainability projects. A second survey as part of the QM sustainability module milk means that Uelzena has consistently pursued a holistic approach to sustainability in milk production. The company also continues to work on future-proof solutions when sourcing raw ingredients from risk countries of origin and in the packaging field.
While many consumers raced to food retailers to panic buy supplies far beyond what they actually needed, sales in the instant beverages sector plunged dramatically. As one of our primary business divisions, this line of business had provided stable results for many years. Butter sales were also impacted with no demand for small packages once hospitality and the tourism sector were shut down. Likewise, there were fewer orders for dietary products during lockdown. As a result, the 2020 reporting year saw decreased sales across virtually all divisions. In total, the Group recorded a drop in sales of seven percent.
Sustainable milk production
Incorporating sustainability aspects with regard to the primary ingredient of milk holds an especially high priority for Uelzena as a milk-processing company. In 2020, the volume of raw milk supplied rose by further seven percent to 687 million kilograms in total. 76 percent of this milk is VLOG certified. Which means that no genetically modified crops are used in the cattle feed. The QM sustainability module milk provides a practical method to investigate sustainability aspects at the milk production level. It follows a broad approach incorporating economic factors and criteria relating to ecology, social issues and animal welfare. Uelzena has been involved with this industry solution since the start. A second round of the survey commenced in the reporting year with the aim of joint further development based on the obtained findings. In addition, a pilot project that addresses the milk’s carbon footprint was initiated. The objective is to gain an overview of greenhouse gas emissions from milk production and to work out possible strategies to reduce these emissions.
.Broader product diversity
The Uelzena Group presses ahead with product developments and develops innovative product solutions for its customers, always picking up on the latest trends. For instance, expanding the milk-based range in the Instant Beverages division. By providing a topping powder based on oats and a completely plant-based cocoa, the Instant Beverages division now offers the possibility of successfully entering the growing vegan vending market. The product palette was also extended to include instant beverages made from high-quality organic and Fairtrade ingredients. Sweetened condensed milk is another area in which Uelzena has responded to changing customer requirements and has extended its range accordingly. The Warmsen site is now a trailblazer in the market for sweetened condensed milk with organic certification as well as Fairtrade-licensed condensed milk. When using vegetable fats in new recipes, sourcing sustainably produced raw ingredients is especially important, which is why we use, for example, palm oil that is certified as sustainable.
Human rights emphasised when sourcing
The raw ingredients used at Uelzena are not only sourced from the local region. Ingredients such as cocoa and coffee also originate from countries referred to as risk countries (BSCI risk assessment). To ensure compliance with labour laws and human rights, suppliers are required to meet the standards of the Ethical Trading Initiative. In the reporting year, almost 50 percent of suppliers from risk countries of origin were able to present certifications such as SEDEX, BSCI, TFS, SA8000 or Fairtrade. As several customers maintain strong partnerships with suppliers or have functional specifications that restricts the choice of suppliers, our influence to further expand this figure is limited at present.
„With these outlined measures we are creating a solid foundation for the future of our company. We will also continue to gradually develop our activities with regard to the new supply chain law to ensure we meet our collective responsibility going forward.“
Sandra Gellert, Head of Central Procurement, Uelzena
Packaging with a future
In the Instant Beverages division in particular, the awareness for sustainable packaging is growing and, as a competent partner, Uelzena also wishes to support its customers in this issue. This is why, for some time now, the company has actively addressed aspects such as environmental friendliness and the recyclability of packaging. In its endeavours, the Uelzena Group has tested a broad range of options so it can start introducing sustainable solutions. In the Instant Beverages division, we are already working with an aluminium-free composite that has no adverse effect on product quality. Other possible solutions are being further evaluated. In addition, an investment in new technical equipment has made it possible to seal the tins in question with a cardboard base – besides the option of the tinplate base – and therefore significantly improve its recyclability.
In 2021, Uelzena will continue its commitment to tackling the sustainable sourcing of raw materials and to develop environmentally friendly packaging solutions, as well as working continuously on product innovations. The results from the QM sustainability module milk will be used to initiate an improvement and learning process together with the milk producers. Climate-friendly milk production is also a topic that will continue to be pursued based on the findings of the pilot project. The new supply chain law will also be given a high priority. Although the law does not apply to the Uelzena Group at the moment because of the company size, it sets the course based on the measures taken to date for due diligence obligations relating to human rights.
The modern production of food involves divided responsibilities and comprises several stages. At the heart of this process is the further processing of agricultural raw materials into intermediate products and ingredients. This is the core competence of the Uelzena Group and its subsidiaries. In 2019, the Group alone procured just under 750,000 tonnes of milk raw materials as well as other agricultural raw materials such as sugar and cocoa.
From all of these raw materials, the facilities in Uelzen, Ratzeburg, Bismark and Warmsen predominantly produce intermediate products and ingredients. Customers are the industry, catering services and food retailers. Moreover, the Uelzena Group also produces products for the final customer (e.g. Butaris) as well as ready-to-eat products on behalf of its customers (private label).
Due to its dual function as a purchaser of agricultural raw materials and as a processor, the Uelzena Group is aware of its multiple responsibilities:
- for the health of the consumers that want to buy high quality and safe food
- for the economic viability of the farmers who depend on reliable buying of their agricultural raw materials
- for the environment and the welfare of farm animals
- for the respect of human rights, which is particularly important for agricultural raw materials sourced from non-European countries.
High quality and safe products and reliable purchasing of agricultural raw materials are by tradition important topics for the Uelzena Group, and which have always been carefully managed within the company.
The action field products comprises several sustainability topics, which are important for the stakeholders of the Uelzena Group. Customers, members and suppliers are interested in sustainable and reliable sourcing, customer health and safety, labelling of products and a strategic focus on growth markets.
By applying various strategic objectives and coordinating measures, the Uelzena Group strives to maintain and possibly improve the already achieved level. In doing so, the Group is pursuing a continuous development process, for example, by gradually identifying possible sustainability risks in its supply chains. For milk raw materials, for example, the sustainability module milk provides the basis for that. Using a continuous improvement process, data is collected and analysed and weak points are identified in order to develop objectives and measures. The overall goal: constant improvements aimed at a sustainable milk production. Added to that, the Uelzena Group is setting up sustainable supply chain management for important non-milk raw materials including cocoa, sugar and coffee creamer.
Our sustainable product strategy – targets and measures
- The Uelzena Group endeavours to continue to improve the added value of all its product groups.
- The production of safe and high-quality products on a long-term basis should be guaranteed.
- The range of sustainably sourced raw ingredients and materials should be expanded. The Uelzena Group is using increasing customer demands for sustainability as a reference.
- The process-focused quality management system systematically accompanies all processes, checks for errors and ensures that product specifications are complied with.
- The Uelzena Group has been certified according to the most important schemes: ISO 9001/2015, IFS Food (higher level), BRC (British Retail Consortium), Fair Trade, Rainforest Alliance, EU organic regulation, Kosher and Halal upon request.
- Our laboratories operate at high-end chemical-physical standards, which for example include specific test methods on the structure of particles. The laboratories are certified according to ISO 17025.
- Risk-based quality control plans with defined sampling schedules are in place for all raw materials, intermediate and finished products. This process ensures that the defined microbiological, chemical-physical and sensory product properties as well as quality parameters are complied with.
- HACCP management includes allergen management, computer-aided maintenance and repair, foreign matter management, a hygiene concept (zones and requirements) as well as pest control.
- Suppliers are inspected by requesting specific information, on-site visits and supplier audits. Raw material specifications must be available for each raw material. Moreover, the Uelzena Group produces its milk-based ingredients and products exclusively from milk raw materials that stem from Germany or the European Union.
- Risk technologies such as genetic engineering, nanotechnology or irradiation are, in general excluded.
- Packaging materials as well as food contact materials and articles comply with German and European regulations. Added to that, supplier declarations of non-objection according to Regulations (EC) 1935/2004 and 10/2001 are available for these materials.
- In order to further improve the high quality and hygiene standards of the Uelzena Group, a new automatic gantry for the transport of products between the storage facilities and the production area was erected at the Uelzen site. Repacking onto plastic pallets reduces the impact on the environment, the risk of intrusion of foreign matters (such as wooden splinters) and the external contamination of the production areas. The lock concept was also expanded, which now allows the different product streams to be better segregated. This prevents allergens that are subject to labelling such as milk powder to get into other products (for example, yeast).
- The Uelzena Group controls its suppliers on the basis of risks. Should any information be conspicuous, our buyers reserve the right to have it checked by auditors directly at the suppliers' companies.
- Since 2016, the Uelzena Group has been working step by step on the development of a sustainable procurement management programme. All procurement materials have been analysed and future strategic priorities defined based on these findings. The most important agricultural raw materials are: Milk raw materials, sugar, cocoa and coffee creamer. For these materials, a management approach was developed and passed which includes several stages: Analysis of potential sustainability risks, supplier dialogues, definition of requirement and risk-based reviews of compliance with the requirements.
Sustainable sourcing: milk raw materials
- 94 percent of our milk raw materials came from regional producers (as of 2020). The agricultural companies producing the milk are located within a radius of less than 150 kilometres around the Uelzena sites.
- A requirement for milk delivery is adherence to the national standard for producing milk, QM Milk. This is used for quality assurance in milk production and comprises 69 criteria. In addition to hygiene management, criteria also relate to species-appropriate animal husbandry, the responsible handling of veterinary medicinal products, the working environment and feed safety. Dairy farmers are audited and certified on site at regular intervals.
- Sustainability data on milk production has been collected via a survey since 2017. This survey at farm level is based on the sustainability module milk (Thünen Institute, QM Milch e.V.), a science-based questionnaire containing more than 80 ecological, economic, social and animal welfare criteria. The second project phase started mid-2020 and the Uelzena Group participates again as a practice partner. See also: sustainability module milk.
- Milk producers that produce GMO-free milk according to the VLOG standard must show a relevant certification. An “Ohne Gentechnik” (GMO-free) certification means that food is not itself comprised of genetically modified organisms (GMO), does not contain these and must not be produced from these. In addition, no components that have been produced via genetic engineering may have been used during production. For animal feeds such as milk or cheese, these can only be certified as “ohne Gentechnik” if the animals have not been fed with genetically modified crops. Risk-based inspections and feed analyses are carried out on the farms at least every three years.
Sustainable sourcing: labour and human rights
- Customers of the Uelzena Group shall be given the opportunity to select whether they use conventional or sustainable non-milk raw materials such as cocoa. Sustainable raw materials comply with internationally acknowledged sustainability standards such Fairtrade, Rainforest Alliance and Organic.
- Compliance with labour and human rights is a high priority for the Uelzena Group and is laid down in the company's Code of Conduct.
- Therefore, the Uelzena Group requests transparency from its suppliers when they sell raw materials from sensitive countries of origin in Asia, Africa and South America. The buyers at the Uelzena Group request self-disclosure from their direct suppliers in Europe – in most cases intermediaries or processors – confirming that the companies observe human and employee rights in accordance with the requirements of the Ethical Trading Initiative (ETI). In 2020, about 50 percent of suppliers from these regions not only fulfilled the requirements of the ETI, they were also audited for further standards such as SEDEX, BSCI, TFS, SA800 or Fairtrade. New suppliers provide the required information and data via an online supplier portal. Gradually, the suppliers’ suppliers shall be included as well – along the supply chain back to the origin. In line with the further development of sustainable procurement management, more sustainability aspects from the suppliers may be requested.
- The Uelzena Group is a member of SEDEX, a data platform where companies share information on the results of SMETA audits. SMETA is an ethics-based audit format that provides information on the four areas defined by SEDEX: work, health and safety, environment and business ethics. The Uelzena Group has also been audited for a number of years and can therefore present its customers a SMETA 4 certificate confirming compliance with ethical, labour and environmental standards.