Pick n Pay

Sustainable Living Report 2013

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Sourcing from small, black- and woman-owned businesses GLOBAL GAP For nine years, our corporate suppliers of fresh produce have been audited against the GLOBAL GAP standard. Sixty-nine of Pick n Pay's 78 fresh produce suppliers audited against this standard were accredited in 2012. Nine suppliers were accredited with a second-grade pass because they use chemicals registered outside South Africa. Suppliers that buy fresh produce to process and sell on to Pick n Pay are not audited according to GLOBAL GAP. The GLOBAL GAP standard includes an extensive list of criteria against which our corporate-brand suppliers of fresh produce are assessed. This accreditation covers the following sustainability elements: food safety and traceability environment (including biodiversity) workers' health, safety and welfare animal welfare integrated crop management integrated pest control quality management systems hazard analysis and critical control points Local gap is the condensed version of GLOBAL GAP, designed for small farmers. This simplified certification addresses the sorts of challenges, such as cash-flow constraints and limited education, that make audits more onerous for small businesses. PNP SUSTAINABLE LIVING REPORT 2013 Our procurement spend R20 billion BBBEE-certified businesses R432 million black-owned businesses R187 million women-owned businesses R255 million SMMEs It is important to source locally, and to support South African businesses. Sourcing from small, black- and women-owned businesses fits into our broader transformation initiative (see page 37), and is one of the seven elements reflected on our broad-based black economic empowerment (BBBEE) scorecard. Pick n Pay, as a socially responsible organisation, is required to meet the economic development objectives of the South African government. Our policy will seek to drive the development of the small and medium enterprise sector in South Africa, which can be leveraged to promote job creation and food security. According to our supply chain risk analysis, every Rand we spend on procurement has an economic multiplier impact of more than three times that value, taking into account the impact on suppliers, employees of suppliers, and employees' families and communities. By directing our procurement spend strategically, our buying power makes a significant difference to the small businesses in our supplier network. In 2012 we implemented a system to track our spending on BBBEE-certified companies, black-owned companies, women-owned companies and small, medium and micro enterprises (SMMEs). Initially, we are looking at a sample of our largest and smallest suppliers; to date we have analysed 50% of our total supplier network. Over the coming year, this process will be extended to cover all suppliers. This is the first year in which we have been able to provide a breakdown of procurement spend in these categories. Our buying power makes a significant difference SMMEs join our supplier network through the Small Business Incubator (see the next page). Businesses that don't yet meet our product needs and standards are assisted through engagement with our buying team until they meet our requirements. SMMEs are often too small to supply us directly. Those undergoing development do not reflect in our procurement spend until they can supply a larger packhouse. CASE STUDY Dreamland Piggery Dreamland Piggery, owned by Anna Phosa, is a farming operation that has grown to become a significant supplier for Pick n Pay in Gauteng. Anna was introduced to the idea of pig farming at a Pick n Pay Small Business Seminar. "I was inspired by what I was told, and decided to buy four pigs in 2004," she says. "By 2005 my pigs had increased to 25." After several years in a co-operative, she branched off to pursue an independent farming project. The Danish Business-to-Business Programme introduced Anna to Danish pig farmer Michael Tetslaff, who bought Dreamland Farm with her. Anna received further assistance from the Foundation, Absa, and the Danish government. With this joint effort, and Anna's hard work, the farm became operational in 2011. Currently, Dreamland Piggery supplies Pick n Pay with 100 pigs each week. It has 2 000 pigs in total, and employs 17 people. Dreamland has a contract worth R25 million with Pick n Pay over the next five years. Through her hard work and entrepreneurial spirit, along with the support she received, Anna is now a leading pork supplier in Gauteng – not to mention a supplier of free-range pork. 06 19

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