Sustainable Raw Material Sourcing

Management Approach

The Company is steadfast in responsible operations towards all stakeholders. Under the policies spanning from sustainable procurement to ethics and business supplier guidelines. The criteria for supplier selection include supplier capacity and compliance with the relevant law and regulations. The Company promotes and supports its suppliers and develops supplier capability through procurement and responsible supply chain management in order to fulfill the constantly changing needs and expectation of customers, communities and society. Additionally, there have been support for additional agricultural product and organic product sales channels while taking into account the appropriate distance from farms to point of sales to preserve product freshness and development of work processes to reduce environmental impact. Furthermore, the Company realizes the importance of product traceability in order to promote sustainable raw material usage throughout the various projects.

Supplier’s Sustainability Management Processes

In 2022, the Agricultural products and animal products certified by external organizations were as follows:

International Standards Certification for Sustainable Production, Quality, and Food Safety
Agricultural crop Certification or accreditation The coverage of products certified Purchasing volume vs. total raw material procurement
Palm RSPO 30.65% 15.25%
Soybean RTRS 45.28% 3.94%
Sugar BONSUCRO 36.54% 23.97%
Cocoa Utz Certified Core Code of Conduct, Fairtrade Standard for Cocoa, Rainforest Alliance, FSS C22000, ISO2451: 2017, GAP 4.81% 3.00%
Coffee Utz Certified Core Code of Conduct, Rainforest Alliance, GAP 33.83% 7.91%
Cereal GAP, HACCP 0.76% 29.65%
Other products GAP, Q Organic 18.09% 16.27%

Animal Welfare Management

The Company places importance on selecting raw materials from suppliers who care about animal welfare, as well as developing sustainable food quality and safety by supporting Charoen Pokphand Foods Public Company Limited, which is the main trading partner in setting policies and management guidelines that aim for excellence in animal welfare management. For products derived from animals, the Company would request certification from leading international institutes and organizations such as the Business Benchmark on Farm Animal Welfare (BBFAW). This represents the Company's commitment to delivering products responsibly and building consumer trust.

Certification of Animals Products Adhering to Animal Welfare Standards
Animal products Certification or accreditation The coverage of products certified Purchasing volume vs. total raw material procurement
Aquatic products ASC, BAP, BRC, GAP 39.42% 12.98%
Cattle products BBFAW, GAP 27.71% 1.85%
Dairy products GAP, GHP 42.95% 12.54%
Pig products BBFAW, Livestock OK, GAP 84.94% 36.98%
Poultry products BBFAW, Livestock OK, BRC, GAP 97.62% 27.79%
Marine products MSC, BRC, GAP 63.38% 7.87%

Product quality and safety: the process from the source of raw materials until the product reaches the hands of consumers

CP ALL ensures product quality and safety throughout the supply chain

To ensure that the products delivered to customers are of high quality, hygienic and safe. The Company has set standards for quality control in every step, from planting, producing, receiving products, organizing, and distributing products, including distribution and service at 7-Eleven stores. The details are as follows:

1. Inspection for food safety since cultivation Product Development and Quality Assurance Divison in CP ALL provides knowledge and management methods to reduce contaminants problems for SMEs in quality control contamination management and how to reduce contaminants in raw materials before being used in the production process and then to be sold in 7-Eleven stores. In the year 2022, the Company was in collaboration with the manufacturer of Baked Spinach and Cheese products and determined measures to separate contaminants from raw materials before going through the production process and initiated seeking more areas to grow spinach in the country. The Company also promotes the cultivation of selected spinach varieties, specifically to produce good-tasting and good-quality baked spinach, as well as providing advice on every step of cultivation and harvesting spinach and the production process with quality and safety
2. Quality Control and food safety inspection throughout the delivery and distribution process Quality inspection agency in the distribution center Quality inspection staff inspect the quality and arrangement of the goods during the delivery of goods. In the case of temperature-controlled products, the temperature inside the cold storage will be checked, including controlling the quality and temperature of the transport vehicle to meet the standards. If the specified standards are not met, the products are reassessed on the delivery status of whether to deliver to 7-Eleven stores. In 2022, there is 0.02% of products damaged during the receiving process, arranging, and distributing process
3. Quality Control Create safety and confidence in every service

Quality Systems Solutions & Initiatives (QSSI) for stores Inspection for the service management and product quality, which is scheduled to be inspected monthly. In 2022, the Company upgraded its auditing standards. Quality Systems Solutions & Initiatives (QSSI) for stores according to the SAVEQC policy and adjust the points system by giving more importance to parts that affect customers. The objective is to raise awareness for the Stores to maintain the standards of stores and for them to provide customer service to the point of satisfaction. The store's standard score is 93.94%

Quality Assurance Unit (QA) The Company set standards for improving product quality and service quality management by randomly inspecting standards and assessing complaints issues in the past, including random inspection of product quality, cases of non-compliance with the law, proactive product regulation, or labeling. If a non-standard product is found, it will be recalled. In 2022, there was a total of 113 cases, accounted for 164 SKUs of recall of products that did not meet standards or did not comply with the law and regulations, and a total of 65 cases product recalls from customer complaints, accounted for 86 SKUs

Makro implemented product quality and safety throughout the supply chain

1. Up-stream: Food safety from farm To raise the level of agricultural products in line with the brand standards of MQP (Makro Quality Pro) and Selected, which are standards for the Company's food safety management system. The products under the said brand will be selected from orchards or farms that have received Good Agriculture Practice (GAP) standards, along with product inspection at every stage of production, including quality in various aspects, such as size and sweetness, among others. Therefore, the Company has prepared Makro Initiative Accreditation (MIA) or guidelines for producing agricultural products in accordance with Makro's standards and announced them to farmers' groups and suppliers. They can do self-assessments that can be conducted both online and offline, which enhances production knowledge and delivers standardized products to consumers. From the implementation of the project, at present, more than 350 of farmers and suppliers (100%) have received the MQP and Selected brand standards
2. Mid-stream: Control food safety along the distribution process Therefore, the MIA system was further developed to be used in the evaluation of the Company's distribution centers and distribution centers in order to prepare for standard certification application
1) Good Hygiene Practice (GHP)
2) International Food Standards (Codex) of the Food and Agriculture Organization and the World Health Organization
3) Hazard Analysis and Critical Control Point (HACCP)
4) Food Safety Management System Standards (ISO 22000:2018)
3. Downstream: Product traceability In addition to producing products that meet the standards of farmers and trade partners and offering quality products for consumers, the Company adopted a system that facilitates tracing the origin or raw materials and product nutrition information, namely the Makro i-Trace, which able to trace products in the fresh food category and bakery category, totaled 8,173 items, accounted for 100% of Under aro brand. In addition, the Company has also expanded the application of the Makro i-Trace system to Stores in the Republic of the Union of Myanmar

The Company has processes on food security according to a sustainable sourcing policy. The projects and activities are implemented through the 3 main programs:

1. Access to safe and nutritious food

CPRAM "Alongside Thai People; Care Within Reach"

CPRAM Co., Ltd. stands firm in doing business alongside Thai society and being supportive in every crisis that arises. In a time of crisis, CPRAM has a mission to assist in the rescue area by establishing a central kitchen in disaster-affected areas with the objective of alleviating the suffering of victims, including those affected who faced difficulty in accessing clean and safe food and drinking water. The project delivers ready-to-eat food and drinking water, aiming to supply quality food to individuals affected as soon as possible. CPRAM "Alongside Thai People; Care Within Reach" Project ensured that the food provided is ensured to be delicious, safe, nutritious, and hygienic. The main target groups are 6 groups of those in need, those suffering from poverty, and vulnerable groups: children, the disabled, the elderly, those affected by the crisis, low-income individuals, and those who have difficulty or limited access to food. In addition, CPRAM also delivers safe food and water to local communities and society.

Impacts and Benefits

65946  persons

Number of people access to safe food

1.87  million Baht

Project support value

“Food for Those in Need” for the 5th consecutive year

One of Lotus's commitments is to promote good health for Thai people through eating good, safe, and high-quality food. The project supports lunch and the budget to purchase high-quality ingredients for cooking lunches for students in schools throughout 77 provinces across the country. The objective is for the schools to have access to good, nutritious, and safe food. The project also supports healthy growth and child development conducive to effective learning. In 2022, the project organized a special activity, “The Journey of Good Food for the Young,” to promote learning about nutrition by taking students from Wat Kai Tia Community School, Pathum Thani Province—the students visited the food process from upstream to downstream. The objective was for the students to learn the source of quality food through the process of purchasing produce directly from farmers. They also visited the working process at the sorting and packaging plant of Ban Na Khu Community Enterprise Group, along with studying fresh food management at Lotus's, Pathum Thani branch, and learning about selecting fresh food that is a good quality product and safe.

Impacts and Benefits

8255  persons

Number of persons receiving food

1.82  million Baht

Project support value

2. Sustainable Agriculture Program

1. Programs to reduce water consumption
1.1 No-till/conservation agriculture in rained areas

Banana Cultivation Project using old corms and roots without dismantling old stumps reduces tillage to once a year or once every two years.

Target group : Banana plantation farmers

Impact : Reduced production cost associated to tillage and thereby reducing production cost by 20%

1.2 Management and technology

Banana Plantation Plastic Mulching Project utilizes plastic mulch to retain soil moisture and reduce herbicides and chemical insecticides usage.

Target group : Northeastern region farmers

Impact : Reduced water consumption by 50% from the average consumption amount, reduced herbicide usage by 50% and reduced insecticide usage by 30%

2. Programs to reduce environmental pollution
2.1 Production of organic products

Organic Vegetables Project initiated the promotion of organic farming for salad produce and is sold as 1 ready-to-eat salad product.

Target group : Salad products

Impact : Reduce the use of agricultural chemicals by more than 100%

2.2 Use of "smart" pesticides

Insect Trapping Project at plantation plots, a means to determine insects species within the vicinity, allows better information collection regarding insect pests and therefore enables the appropriate pesticide agent usage solution targeted to that insect.

Target group : Vegetable product

Impact : Reduce the chemical usage by over ร้อยละ  30%

2.3 Enclosed production systems: aquaculture

Sustainable Fish Farming Project focuses on development of the production process by encouraging partners to raise catfish and tilapia in a closed system whereby cleanliness and safety are controlled and backtracking is enabled for every process. Additionally, production factors are controlled, issues relating to production quantity due to water restraints are reduced, wastewater discharge in public waterways is reduced and quality of life for farmers, communities, and society is elevated.

Target group : catfish and tilapia farmers

3. Programs to protect soil health
3.1 Low frequency and intensity of tillage

Banana Cultivation Project using the old corms and roots without dismantling old stumps reduces tillage to once a year or once every two years.

Target group : Banana plantation farmers

Impact : Reduced production cost associated to tillage and thereby reducing production cost by 20%

4. Programs to prevent the destruction of ecosystems
4.1 Certifications that ensure deforestationfree production

Product Traceability Project, a system that allows consumers to check the origin of the product via the QR Code displayed on the product label, has initiated with Makro Brand products and fresh food group products. The product database via Makro iTrace application has been comprehensively expanded.

Target group : Tier 1, Non Tier 1 Supplier Fresh produce group

Impact : A total of 8173  product items can be traced, accounting for 100% of all products under the Siam Makro trademark.

4.2 MSC or ASC certifications which ensure sustainable production

ASC or MSC Certified Products Project relates to the sourcing of premium seafood products from fishery sources certified to uphold stipulated quality and standards. The Company sources excellent quality seafood products that meet sustainable Fisheries standards under the Ocean Gems product brand from Indoguna Lordly, a subsidiary of Siam Makro which received accreditation from the Marine Stewardship Council (MSC) and Aquaculture Stewardship Council (ASC). This accreditation is widely recognized by world-class experts as the best criterion for sustainable and responsible fisheries standards. The Company aims to expand the scope of seafood products certification to all countries where they are distributed.

Impact : In 42  seafood products were certified with MSC and ASC standards 55% increased in sales of seafood products were certified with MSC and ASC standards

5. Programs to reduce GHG emissions
5.1 Reduced transport distances through

Agricultural Product Purchase at Source Project aims to source products locally and encourage crops to be farmed around the point of purchase vicinity in addition to delivery of goods to the nearest warehouse.

Target group : Farmers and packaging facilities

Impact : Established purchase locations in communities for over 1700  persons throughout the country

5.2 Local products offerings in retail

Local Product Support Project sales at 7-Eleven stores through a special selection process for local products as follows:

  • Famous products within the province, products approved by the FDA and products with barcodes
  • Selection of 5 7-Eleven stores to test sales
  • Arrangement of products in the 7-Eleven stores and inclusion of appealing public relations media
  • Tracking of product sales
  • Upon fulfillment of criteria specified by the Company, the Company will continue to expand sales to 7-Eleven stores at the provincial, regional and nationwide levels, respectively

Target group : Community enterprises, SMEs

Impact : Supported local product over 107  SKUs scaled up 29  communities distributed to 273  7-Eleven stores

The project procures and distributes the local product and sells them at Lotus's. Lotus's stores and online platforms are distribution channels for Local products from 200 communities across the country.

Target group : Community enterprises, SMEs

Impact : The support for SMEs products, excluding clothing, a total of 25891  SKUs , sold in 2279  stores

3. Product quality and safety

The Company aims to raise the standards of delivering products and services in 7-Eleven stores that are hygienic and safe for consumers, as well as providing training courses on food safety for employees. The Company also enables employees to provide a positive and safe customer experience and facilitates a food safety management system for the organization.

Selection of raw materials according to international standards

Established guidelines for raw material selection with stringent controls over product manufacturing through the development of efficient manufacturing systems, which adheres to relevant laws and satisfies international production process safety certifications including BRC standards, HACCP standards and GMP standards, etc., to ensure safe and reliable products for consumers.

Implementing product quality and safety measures throughout the supply chain

The objective is to ensure that the products delivered to customers are of high quality, hygienic and safe. The Company has set standards for quality control in every step-from planting, producing, receiving products, organizing, and distributing products, including sales and service at 7-Eleven stores, Makro, and Lotus's distribution centers.

Example for Certification or Accreditaiton

Aquaculture Products (BAP Certificate)

Dairy Products (GAP Certificate)

Coffee (GAP Certificate)

Palm Oil (RSPO Certificate)

Related policies and Guideline

Sustainable Sourcing Policy (CP ALL)Download
Sustainable Sourcing Policy (CPRAM)Download

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