BARRANQUILLA, 9TH JUNE 2017 Sustainable Palm oil: Start of a new journey

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1 BARRANQUILLA, 9TH JUNE 2017 Sustainable Palm oil: Start of a new journey 1

2 Palm Oil, general facts Equatorial crop Columbia is ranked 4 th biggest palm oil producer High yielding almost 4 tons/ha; 7-10 times higher then any other seed oil Important Economic Driver Main agricultural crop and highly labor demanding Small holders 40% of total production 2

3 Importance of Palm Oil Available most used vegetable oil in the world representing 35% of global vegetable oil production (Oil World) Price competitive generally less costly then competitive vegetable oils Versatile adaptable to many applications thanks to fractionation, without hydrogenation Stable generally longer shelf life compared to other seed oils 3

4 The food market is changing Consumers are more aware and informed about Food From the year 2000 several scandals related to food; Mad Cow Disease Wine Adulteration Milk Powder contamination in China Horse Meat labeled as Beef in EU Consumers are disoriented and frightened New categories of products try to address consumer concerns: Free of.. is a new trend in the market (es Sugar-free, Lactosefree, Gluten-free, and lately Palm Oil Free) 4

5 Why is palm oil under attack? Health saturated fats Sustainable frequently accused of unsustainable practices in the producing countries Food safety recent warning by EFSA on process contaminants Image reputation is generally bad Entire Categories shifted away from Palm Oil (Biscuits/Salty Snacks/Cooking Oil) Confectionary sector is reacting; where feasible change of recipes for palm oil free labeling; in few concerned markets in Europe 5

6 European trends for sourcing certified sustainable PO 6

7 And what about Ferrero? From a Patisserie shop to Global Leader 7

8 Ferrero, today (2015) Global presence with 22 Factories, employees, 100 nationalities 8

9 Results, Reporting Period 2015 Mars # 1 and Nestlé # 2; 9

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11 History of sustainability, Ferrero & Palm Oil Ferrero open his first patisserie in Alba just after the second world war it the so called terra della malora Ferrero started to use palm oil in the early 60, origin was West Africa 1960 Raw materials must meet specific freshness, quality and safety requirements Key principles: excellence in quality, full respect for human rights, sustainability Where possible, strategic raw materials are sourced directly Long term commercial relationships with producers and suppliers Controlled with a policy of complete traceability 11

12 History of sustainability, Ferrero & Palm Oil Ferrero join RSPO Ferrero join POIG Launch of the Ferrero Palm Oil Charter: Additional Social, Environmental, Traceability and Smallholders criteria 100% SG, including non-rspo countries ,5 % Full traceable to the plantation 12

13 RSPO Segregated Palm Oil 13

14 Ferrero; 100% RSPO SG certified 14

15 History of sustainability, Ferrero & Palm Oil Today s guiding principle of sustainability has its origins in forestry. In years ago this year Hans Carl von Carlowitz, a German, published his book Silvicultura oeconomica, which advocated the conservation, growing and use of wood in a continuing, stable and sustained manner. The 2030 Agenda for Sustainable Development 300 years ago U.N. World Commission on Environment and Development: Our Common Future 1987 ("Brundtland Report") defined the concept: "A development which meets the needs of the present generations without compromising the ability of future generations to meet their own needs. 15

16 Ferrero Palm Oil Charter 100% RSPO SG certification is the first step towards sustainability. The Ferrero Charter on Palm Oil, launched in 2013, defines additional requirements for growers. Fact based approach. Growers agreed to apply it progressively and time-bound. Ferrero s suppliers are requested to: 1. Providing fully traceable oil, while including smallholders; 2. Not clearing High Carbon Stock forests; 3. Not using fire to clear land; 4. Not planting on peat soils; 5. Protecting orang-utans and other endangered species by maintaining High Conservation Value areas; 6. Reporting on the greenhouse gas emissions of their production; 7. Respecting human rights, including the right to Free, Prior, and Informed Consent of indigenous and local communities; 8. Recognizing, respecting and strengthening the rights of workers; 9. Not using Paraquat; 10. Actively fighting corruption. 16

17 WWF and Greenpeace 17 17

18 What do consumer expect? Raw Material Quality = Quality + Safety + Sustainability 18

19 What role could Colombia play? 19