Management statement

Bas Albas

CEO Lamb Weston / Meijer

‘Raising the bar, making an impact’

What important external trends, such as regulatory or macroeconomic, do you see impacting the sustainability agenda?

‘There is clearly a polarisation taking place in many areas, Brexit being one example, the imposition of trade tariffs another. One of the consequences of this is the suboptimisation of world trade, creating transportation issues that, ultimately, result in the consumption of more energy. A second consequence is that it pushes sustainability further down the agenda. On the other hand, we have extreme weather which negatively impacts crop yields, one third of food still wasted globally, and millions of consumers indicating how concerned they are about packaging waste and plastics ending up in the oceans. This drives businesses to step up their actions.’

‘In 2018 we saw the impact that extreme weather can have on the agri-food sector, with an exceptionally hot summer leading to droughts, which in turn caused a reduction in potato harvest and crop quality. We have also had summers with extremely heavy rain or even hail, and it is these types of events that highlight the need to continue to work hard on our sustainability agenda. They also underpin the importance of remembering that delivering a French fry to a consumer starts with planting a seed potato in the ground. We should never forget that we have a responsibility from field to fork.'

'Farming is not just an art, it is also a science, and we have to work on trying to scientifically manage the process to make it as sustainable as possible.'

It is now two years since the publication of the previous report. Is your focus on sustainability unchanged?

‘We believe that sustainability is a license to operate, and that it is a process not a trend. This has been our belief since we initiated our Sustainability Programme in 2008, and it is a view that continues to drive us forward. For example, in 2017 we raised sustainable agriculture from a guiding principle to a main topic, creating an extra theme within our sustainability agenda. And, of course, we continued to track external developments, noting the urgency behind the Paris Agreement to reduce GHG, and the focus that some companies are giving to the circular economy and the requirement to look for ways to minimise waste and negative impacts.’

You mentioned that the company has added Sustainable Agriculture to its focus areas, creating the Sustainable Seven. What is the significance of this?

‘When we began the Sustainability Programme our aim was to look at the entire supply chain, while focusing primarily on those areas where we had a direct impact. We are now ready to broaden our scope and target those areas where we can have an impact on the supply side. The logical area is in potato production. And the biggest impact we can have is by working with our farmers. Our prime focus now is to create measurable impact, specifically in those areas where we have the most influence. Today, soil health is a major global topic, and it is absolutely vital that we tackle this with enough resources and focus.'

The company opened a new factory in Russia in 2018 and acquired a production facility from Oerlemans Foods in the Netherlands in 2017. How do you ensure this growth fits with your sustainability agenda?

‘Both of these were primarily business driven. In Russia, our customers would prefer to have locally produced French fries, and because we were able to successfully make the business case with a partner, we opened a production plant in the country.

This also highlights what is possible when you join forces with a solid partner: you reduce your risks and find an easier route to market. We have fully introduced our sustainability standards and practices into the plant. In terms of operations, potato knowhow, and sustainability practices, we view this as simply another location.

‘The integration of the Broekhuizenvorst plant in the Netherlands was to support the ongoing growth of our customers, the market, and ourselves. We are in the process of ensuring that the plant operates according to our standards, in terms of management practices, sustainability, and upgrading and expanding the facilities. This will lead to more energy- and water efficient production, as our business and sustainability agenda are indivisible. If we carry out a quality upgrade, our energy consumption improves, our water usage decreases, and our food loss and waste is reduced. Quality and food safety always come first.’

In this report we discuss the introduction of the Company Management Model (CMM). Can you explain how this will benefit our customers and our people?

‘The shift is threefold. First, it means we are moving from a company that was functionally organised to one that is concentrated around business units. Second, we were rather informal, so we didn’t have a particularly strong governance model in place. The CMM changes that. And third, the way we lead is changing. Being able to connect with the right people and have contact points within the company is crucial, and the CMM will have an impact on the way we manage and behave.

‘We want to empower our people, giving them the opportunity to take more decisions themselves. But this is only possible if we have a strong governance structure in place. So, we are promoting greater interaction and helping people support one another more. However, this is a long-term process that will take years to realise.

‘Another important element is our shared values. This model will reinforce our belief that the customer is at the heart of the business. We want everyone to understand that, no matter which position they are in, they can contribute to customer satisfaction.

‘The world is changing faster than ever before, which means our responsiveness has to increase, or we will fall behind. But as well as being fast, we also need to be transparent, and we need to ensure that everyone knows they are an ambassador for the company.’

Nutrition and health are topics that are given increasing attention in modern society. What is the significance of your focus on Nutrition & Health within the Sustainable Seven?

‘This is a very important issue, and one that I am paying even greater attention to since I was named Chairman of the Dutch Food industry Federation (FNLI) in 2018. Part of the role involves holding discussions with politicians, and I see at first-hand how policy and legislation is developed and implemented. It has become even clearer to me that facts are crucial. However, in the public domain more attention is often paid to opinion rather than data, which does the nutrition debate no good. One of the consequences of this is that the consumer follows the latest hype. For us it is clear: we need to focus on telling the real story so that people can make their own choices.

‘In terms of our Sustainability Programme, where Nutrition & Health is a key element of the Sustainable Seven, we are focusing on being completely transparent about our product category and what we can add to people’s diet. The potato is a healthy foodstuff. Then we have oil and salt, the two other main ingredients that go into most of our products. We have reduced salt levels across our product range, in line with scientific guidelines, and have switched to healthier frying oil – mostly sunflower oil – significantly cutting saturated fat in our frozen prefried products. But this transition takes time. And we can’t alter the taste of our products too quickly, or we risk alienating our customers and the end consumer.’

This year you have linked the UN sustainable development goals (SDGs) that you target with your materiality matrix and future business strategy. How does this help you better act on the material topics you have identified?

‘The SDGs enable us to compare like with like. They give us the ability to speak one language internationally. I think we should view them as being a major step toward having common standards, while paving the way for people to cooperate on shared objectives. For example, if we define our SDGs and our customers are focused on the same areas, we can cooperate to develop a common programme. And it also works the other way around. If we can link the efforts a farmer is taking to be more sustainable with the SDGs, then it helps everyone understand the global impact sustainability can have.’

The company has focused on being known as the industry leader in sustainable development within its markets by 2020. What then?

‘It is important to understand that while 2020 is an important milestone, it is not the end of our journey. It will be a moment where we reappraise where we are going, and set new goals for 2030. We will raise the bar again, and we will continue to focus on making a difference. For example, we introduced Sustainable Agriculture this year, and we may introduce new goals in the future. So far we have said we will use the SDGs as a compass to guide us towards 2030, and I think that is a very constructive position to take.’

With best regards,

Bas Alblas
CEO Lamb Weston / Meijer