Supplier Code of Conduct
Our multifaceted supply chain includes suppliers of hogs, turkeys, ingredients, packaging materials and transportation. While it is a complex undertaking to understand and measure the impacts of the supply chain, we took a first step by developing our Supplier Code of Conduct in 2010.
We introduced these requirements to our key suppliers in fiscal year 2011. We then shared them with all of our suppliers in 2015 to ensure everyone is operating in a sustainable and responsible manner. We continue to review and update these requirements on an ongoing basis to ensure that top sustainability concerns are addressed and that they are ingrained in all levels of our business.
Our Supplier Code of Conduct defines expectations for our suppliers in areas such as:
- Quality and product integrity;
- Safe work environment standards;
- Human rights;
- Animal care; and
- Environmental management.
We require all participants in our business, just like everyone within Hormel Foods, to consistently meet our standards and demonstrate their commitment to transparency and honesty through ethical business practices.
Through our supplier quality management program, we formally assess key suppliers in the areas of service, quality and sustainability. In addition, in calendar year 2014 our Procurement Council completed a category-level risk assessment process. Based on the results from this assessment process, we will work with the suppliers in the categories in which opportunities for improvement have been identified.
Supplier Diversity Program
We employ a supplier diversity program that gives diverse companies, such as small, women-owned, minority-owned and veteran-owned businesses, the opportunity to supply quality product options that meet our company’s growing business needs. Working together, we provide the highest quality materials and services to our internal and external customers on a timely basis at the best economic value. Suppliers can submit their businesses for consideration here.
Palm Oil Sourcing Policy
Palm Oil Principles
Hormel Foods recognizes the unique environmental and social risks associated with palm oil. These risks require additional due diligence in sourcing, education and training to ensure the palm oil in our supply chain is not associated with human rights issues, deforestation or plantation expansion on carbon-rich peatlands.
While Hormel Foods is a relatively minor user of palm oil, we realize that responsible sourcing of even the smallest amount of this ingredient can make a difference. Therefore, we will only purchase palm oil from suppliers who comply with the following sourcing principles:
- Legally acquire land rights and operations.
- Follow local laws and regulations.
- Respect the rights of all workers.
- Respect the free, prior and informed consent of local and indigenous communities.
- Resolve social conflicts and provide remedy and redress for past violations.
- Include smallholders in supply chains and ensure equitable benefit sharing.
- Protect high conservation value areas and high carbon stock forests.
- Protect rainforests and peatlands, regardless of depth.
- Reduce greenhouse gas emissions and institute a ban on burning.
- Follow the principles and criteria of the Roundtable on Sustainable Palm Oil (RSPO).
- Comply with our Supplier Code of Conduct, which outlines our expectations for all suppliers to uphold top standards related to food quality, product integrity, human and labor standards, environmental practices, business ethics and animal care. In the event an audit or other credible source reveals a supplier is in violation of these principles, Hormel Foods will require the supplier to implement corrective actions. If reasonable/appropriate corrective actions cannot be agreed to, Hormel Foods will suspend or discontinue purchases from the supplier.
Palm Oil Action Plan
- We purchase RSPO-certified palm oil. We made an initial commitment that by the end of 2014, we would purchase only fully traceable palm oil. We met this commitment by working with our suppliers and achieved traceability to the mill level. In the spirit of continuous improvement, we will continue to work with our suppliers to reach 100% traceability to the plantation level, which we estimate will be completed by the end of 2025. We have made significant progress toward this commitment and have reached 77% of our goal.
- In 2015, all of our suppliers published sourcing policies for their entire operations that meet our principles and implementation timelines.
- All of our suppliers are required to report the locations of plantations, mills and refineries from which they source. They must also report annually their progress in verifying the palm oil they source meets responsible production practices. All of this documentation is reviewed by the Hormel Foods Palm Oil Council.
- In addition, to ensure compliance with our sourcing principles, Hormel Foods will require suppliers to assess plantations in its supply chain (through internal and external assessment teams) and submit reports and findings annually, which will be reviewed by the Hormel Foods Palm Oil Council. If a supplier is in violation of our sourcing principles, Hormel Foods will require the supplier to implement corrective actions. If reasonable/appropriate corrective actions cannot be agreed to, Hormel Foods will suspend or discontinue purchases from the supplier.
We will communicate our progress toward this action plan in future global impact reports.
This policy applies to all products that contain palm oil that our company sells, in all countries where we operate.
We invite you to learn more about our supply chain in our global impact report.
South American Beef Sourcing
Hormel Foods is committed to supporting a sustainable supply chain. We require suppliers to comply with all applicable laws and regulations, and our Supplier Code of Conduct. These requirements outline our expectations for food quality, product integrity, human rights and labor standards, environmental practices, business ethics, animal care and continuous improvement.
We source beef from suppliers who share these commitments and follow the principles and criteria of the Global Roundtable for Sustainable Beef (GRSB). The GRSB is a multi-stakeholder group whose mission is to advance continuous improvement in global beef value chain sustainability. The GRSB envisions a world in which all aspects of the beef value chain are environmentally sound, socially responsible and economically viable.
To ensure compliance with our requirements, our beef suppliers have monitoring systems in place for farms supplying cattle, which use satellite images and geo-referenced maps of farms, deforestation data and information from public agencies regarding embargoed areas and human rights. We also require and review independent audits of the environmental monitoring systems of our suppliers.
If a supplier is found to be in violation of our sourcing principles, Hormel Foods will require the supplier to implement corrective actions. If reasonable/appropriate corrective actions cannot be agreed to, Hormel Foods will suspend or discontinue purchases from the supplier.
