Chocolate manufacturer Barry Callebaut using SAP to connect farms
SAP announced that Barry Callebaut, a leading manufacturer of high-quality chocolate and cocoa products, chose SAP to help enable sustainable cocoa farming. With solutions from SAP, Barry Callebaut has already integrated 65,000 small-scale cocoa farmers in Côte d’Ivoire and will include many more across the world. This will create a stronger, more sustainable supply chain and at the same time improve the livelihood of farmers, their families and their communities.
SAP Rural Sourcing Management is an integrated, cloud-based solution running on SAP HANA Cloud Platform. It combines mobile and desktop access to track produce from farm to factory. The introduction of mobile business applications provides farmer organisations with access to important data immediately to help simplify and digitalise business processes. The solution currently covers farmer registration, surveys and e-procurement, and there are plans to extend it in the future with geo-information. This will improve traceability and analysis for sustainable cocoa farming. SAP and Barry Callebaut collaborated on this custom-development project, and SAP intends to make the solution generally available in the near future.
“This is an essential step in our commitment to make cocoa more sustainable,” said Nicko Debenham, Vice President of Cocoa Sustainability at Barry Callebaut. “This tool will allow us to approach sustainability in an unprecedented way, providing the right advice to farmers, driving adoption of best practices and improving yields and livelihoods. It will help farmers better manage their farms and professionalise cocoa farming in order to sustain it into the future.”
“Barry Callebaut is an excellent example of how digital transformation in the agribusiness industry can simplify business processes and improve people’s lives,” said Anja Strothkaemper, Vice President, SAP Agribusiness and Commodity Management.
“Working together, SAP and Barry Callebaut can help make agriculture easier for small-scale farmers, farmer cooperatives and cocoa buyers with a cloud-based solution that helps improve productivity, quality and transparency. Improved transparency is critical to consumer products companies to fulfill expectations of digitally empowered customers and consumers as well as for corporate social responsibility. Because this solution helps ensure that cocoa is sourced from participating farmers, Barry Callebaut is helping to ensure that chocolate lovers everywhere know that they are buying a quality product that supports a responsible source.
SAP Rural Sourcing Management allows Barry Callebaut and cocoa farmer organisations in its network to manage business transactions with mobile devices — eliminating paper-based administration systems that are time-consuming and prone to mistakes. The cloud-based solution enables the entire cocoa production process, from the field to final processing, to be accurately traced.
Barry Callebaut can access information efficiently as the solution works offline with all its functions and then can be synchronised and collected in networks with the limited bandwidth available in remote corners of Africa.
Mobile services running on SAP HANA Cloud Platform help companies build and deploy native and hybrid mobile apps that integrate securely with on-premise or cloud-based systems. SAP Rural Sourcing Management will provide a global-scale cloud-based solution that can be implemented in a short amount of time and adapted to each enterprise’s individual needs.
The SAP Custom Development organisation offers application development services that provide individual organisations with tailor-made, business-essential innovations that help them to extract the full value from their SAP investment by bringing their competitively differentiating processes to life in the digital economy.
The first implementation of SAP Rural Sourcing Management was completed in October 2015 in Côte d’Ivoire and covered 25,000 certified farmers; a second implementation went live on June 13, 2016. Barry Callebaut is currently targeting 65,000 farmers and plans to roll out the solution globally in the next three years.
Excerpts from SAP Rural Sourcing Management by Christian Merz
By 2050, there will be 9.3 billion people on the globe, two billion more than in 2012. This growth will come almost exclusively from developing countries, making them the markets of the future. Food production will need to rise by 50% by 2030 to meet growing demand.
Globally, more than 500 million smallholder farms produce about 80% of the food consumed in Asia and sub-Saharan Africa today. For some crops, such as coffee and cocoa, most of the globe’s production capacity is owned by smallholders. In the cocoa sector, 90% of world production comes from 5.5 million smallholders.
Global trade standards are requiring increasing levels of transparency, a trend driven by consumer demands to know where products come from and how they have been produced. A study across eight countries including Brazil, China and India showed that these product characteristics are important to more than half of consumers.
Fair trade sales are expected to reach $9 billion in 2012 and $20 billion to $25 billion by 2020. The global organic food market is projected to have a value of $88 billion in 2015, which would represent an increase of 48% since 2010. In addition, a wealth of other standards related to the social and environmental aspects of production are being used both as consumer marketing tools and for quality and safety management.
National and regional trade regulations, global trade standards as well as retailers and their consumers require that the production of food and other products be documented and controlled for quality at each and every step. For agribusiness, food, cosmetics and pharmaceutical companies, as well as any others involved in buying agricultural products, it is no longer enough simply to procure products on the open market.
Instead, smallholders need to be fully integrated into these global value chains – a task that requires coordinated efforts among all stakeholders. In particular governments and the public sector are key drivers for national and international agricultural initiatives.
SAP Rural Sourcing Management is an integrated, cloud based solution in its pre-commercial stage combining mobile and desktop access to track produce from farm to factory. Through the introduction of mobile business applications, farmer groups and cooperatives can run their business in a structured, effective and efficient way by getting rid of an error prone, time and effort consuming paper based administration.
The technology supports farmers with access to profitable markets so they can increase their income. Established players — such as processors, buyers, exporters and multi-nationals sourcing companies — profit from enhanced transparency and reliability when conducting business with the farmers. They can now plan and forecast more accurately. More than 36,000 recorded business transactions using mobile phones in buying stations and warehouses across 15 pilots in Ghana, Burkina Faso, Cote d’Ivoire, Benin and Uganda — with a system adoption rate of greater than 90%.
Ultimately, the greatest innovation is that existing economic activities among farmer groups have become more sustainable. This not only boosts local economic activity but also improves the socio-economic situation for a vast number of under-serviced rural inhabitants.
Thus the solution could be a blueprint for national initiatives driven by the public sector in order to incubate the agricultural sector gaining wealth for their people. Smallholder farming plays an enormous role in food security and deserves dedicated solutions that support the producers in their daily business.
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