Field of action assortment
METRO Cash & Carry procures and selects its goods responsibly and can therefore offer its customers sustainable products and services. In addition, the company shares its know-how in the fields of resource management, procurement and product range composition with independent business owners. In this manner, METRO Cash & Carry generates long-term business prospects and a competitive edge – both for its customers and the company.
In the field of action assortment, METRO Cash & Carry focuses on three subject areas:
- Responsible sourcing: The company aims to procure goods on whose quality, safety and sound social and environmental credentials the customers can rely. METRO Cash & Carry is therefore in direct contact with its suppliers and promotes the traceability of products and responsible supply chain management.
- Responsible assortment: The company also generates added value by selecting its assortment responsibly, offering sustainable products and services, and optimising the product packaging.
- Responsible consumption: Additionally, METRO Cash & Carry assists its customers in making purchasing decisions in favour of sustainable products, thereby also promoting a sustainable lifestyle.
To offer its customers an attractive and unique range of products which is distinguished by its diversity, freshness and high quality in all the stores, the company operates six International Trading Offices in Boston, Concarneau, Rotterdam, Valencia, Düsseldorf and Hong Kong for the sourcing of food items and another office in Hong Kong for the sourcing of non-food supplies. It handles all the purchasing for the national organisations via these offices. The company sources products directly from their place of origin and makes targeted use of procurement marketing potential and synergies. The concept of direct sourcing from the growers and producers makes for optimised supply chains and enables the company to maintain a high level of product quality, freshness and safety, and build up long-term, transparent relationships with the suppliers. Treating suppliers in a truly ethical manner and building up a partnership is key, regardless of whether a supplier is from nearby or thousands of kilometres away.
Responsible supply chain management
As an international wholesale business, METRO Cash & Carry works with a large number of suppliers, growers and producers. By promoting adherence to social standards, the company assumes responsibility all along the value chain. METRO Cash & Carry is committed to the key labour standards of the International Labour Organization (ILO) and rigorously advocates the systematic establishment of fair and just working conditions among own-brand manufacturers. The company therefore demands that its non-food own-brand suppliers submit proof of BSCI certification or certification in accordance with an equivalent social standard system.
For more information see the chapter Sustainable procurement and assortment
Transparency in the value chain
Tracing goods is a key issue at METRO Cash & Carry. The company aims to generate a high degree of transparency along the entire value chain and to trace products back to their source in order to protect resources and avoid illegal activities. Traceability and controlled procurement on the basis of concrete guidelines for sustainable purchasing also enable METRO Cash & Carry to guarantee the safety and high quality of its products and to assist customers in satisfying legal requirements.
Together with other retailers, renowned partners and the standardisation organisation GS1 Germany, the company has developed a multi-industry solution which allows products to be traced all the way from their origins to the customer’s purchase. Approximately 700 fish products and 2,000 meat products can currently be traced in Germany with the PRO TRACE app.
To ensure maximum product safety, quality and the traceability of food items, METRO Cash & Carry and the company Star Farm, which is also owned by METRO GROUP, have initiated a special project in Pakistan. In January 2016, the two cooperative partners opened the first corporate traceable farm in More Khunda in Nankana Sahib District, about 75 kilometres west of Lahore. The farm is growing fruit and vegetables, initially exclusively for the METRO Cash & Carry wholesale stores in Pakistan. The products bear a 19-digit barcode and can be traced by the customers all along the supply chain, all the way back to the farm. This approach therefore not only helps to bolster the customers’ confidence in the quality of the products – it also helps METRO Cash & Carry Pakistan to recall goods which do not meet the company’s high standards.
Supplier survey on water use
Use of the resource water is another issue which has strategic significance for METRO Cash & Carry. To gain an overview of water use in the supply chain, the company surveyed a selection of strategic suppliers in 2016 on their risks and opportunities as well as management methods concerning water. METRO Cash & Carry generates approximately 16 per cent of its revenue with these suppliers. The survey was conducted via the supply chain programme of CDP (formerly the Carbon Disclosure Project). At 62 per cent, the response rate for this first-time survey was high.
Here is an overview of the key results of the survey:
- 80 per cent of the respondents identified risks associated with water
- 25 per cent see concrete risks relating to their business with METRO Cash & Carry
- 77 per cent of the respondents see not only risks in connection with water, but also opportunities for their business
- 84 per cent have integrated the issue of water into their business strategy
- 86 per cent have set water-related targets
The survey gives METRO Cash & Carry a solid basis for understanding where there are water-related risks in the supply chain and what those risks are. It also provides touchpoints for further discussion and potential partnerships with the suppliers.
Goals in the area of a responsible assortment
- With the revision of its purchasing policy for fish and seafood in 2016, METRO Cash & Carry has set itself a new goal: by 2020, 80 per cent of the twelve best-selling types of fish and seafood at METRO Cash & Carry are to have sustainability certification which is recognised by the company. As part of the Global Sustainable Seafood Initiative (GSSI), METRO Cash & Carry advocates the harmonisation of the certificates for sustainable fish available around the world.
- METRO Cash & Carry is committed to only using palm oil from sustainable sources for its own-brand products by 2020. In this respect, the company is guided by the criteria of the Roundtable on Sustainable Palm Oil (RSPO) (palm oil purchasing policy).
- By 2020, a full 100 per cent of the wood and paper used for own-brand products is to come from sustainable forestry (wood and paper purchasing policy).
- METRO Cash & Carry has also set itself the target of reducing the use of packaging material and its impact on the environment (packaging purchasing policy). To achieve this, the company wants to develop innovative solutions that can reduce the product weight, improve product arrangement on pallets and lower the costs for the customers.
- By 2018, METRO Cash & Carry aims to
- check the packaging of 10,000 own-brand products regarding their impact on the environment and – if possible – improve it,
- have METRO Cash & Carry beverage cartons certified by the sytem of the Forest Stewardship Council® (FSC®) and
- do away with packaging made of polyvinyl chloride (PVC) by 2018 and replace it with more sustainable alternatives.
Both the International Trading Offices and the local purchasing departments of the METRO Cash & Carry country organisations are working on implementing these goals.
Fish from sustainable fishery
Fish is becoming ever more significant with regard to the safeguarding of food supplies. Already, billions of people are dependent on the seas as their primary food source. However, fish is not a resource that is available in infinite amounts. Nearly a third of the oceans’ stocks is overfished and about 85 per cent is deemed to be used to the maximum degree possible. Stocks are further decimated by illegal fishing and high by-catch rates. As one of Europe’s leading fish wholesalers, METRO Cash & Carry assumes a special responsibility and has taken action in various ways:
- The company offers fish caught using eco-friendly fishing practices which preserve stocks and fish from certified aquaculture. Customers recognise this by the labels of the Marine Stewardship Council (MSC) and the Aquaculture Stewardship Council (ASC). In financial year 2015/16, the sustainable fish selection in Germany comprised 42 MSC-certified own brands plus 459 MSC-certified and twelve ASC-certified brand-name products as well as 20 brand items certified as organic.
- 90 per cent of our aquaculture fish and seafood articles sourced in Asia via our International Trading Office are certified by GLOBALG.A.P., ASC and/or Best Aquaculture Practices (BAP).
- METRO Cash & Carry fosters direct contact with small-scale fishermen and supports them in applying sustainable fishing practices. For example, the company purchases fish caught in the Netherlands using the so-called fly-shooting method. This is a more gentle catching method which has no negative impact on the seabed. The nets also remain in the water for a shorter period, which prevents injuries to the fish.
- The demand for fish is particularly high in Japan. At the same time, pressure on the stocks is mounting. Aquaculture can offer an alternative when there is no danger of overfishing due to the catching of fry from the seas which are then raised in fish farms. To deal with this problem, METRO Cash & Carry Japan works with Kindai University on raising fish from fertilised fish eggs in aquaculture and making the entire process from rearing to selling traceable.
In April 2016, during the METRO-EXPO in Moscow, METRO Cash & Carry surveyed approximately 1,000 customers on the significance of sustainable fish and how to deal with the seas responsibly. An overview of the key results:
Sustainable product range
The product range of METRO Cash & Carry comprises a large number of organic and fair-trade items or other eco-friendly products, each with the appropriate certifications. Looking at METRO Cash & Carry’s 2020 commitment regarding sustainable palm oil, in financial year 2015/16, the company has made great progress thanks to our International Trading Offices: over 40,000 tonnes of French fries and other potato products have been sourced with sustainable palm oil (mass balance certification) and delivered to 24 METRO Cash & Carry countries. Another important signal from the METRO Cash & Carry organisation was the launch of internationally sourced own-brand fair-trade coffee beans. The launch of this product was celebrated at the headquarters on Sustainability Day, 6 June 2016, kicking off deliveries to 14 countries.
In financial year 2015/16, METRO Cash & Carry Germany’s sales of more sustainable products totalled almost €51 million.
MSC-/ASC-certified fish and organic fish
Organic products (without fish)
In everyday retail business, packaging is not only used for transporting, preserving and protecting goods. Product packaging also contains information and usage instructions for customers. In order to minimise the resources used for its production and disposal, METRO Cash & Carry aims to generate as little waste as possible, use resources optimally, recycle materials and operate in cycles.
This approach is exemplified by packaging introduced in 2015 by the International Trading Office of METRO Cash & Carry in Concarneau, which specialises in fresh fish. Contrary to the cartons previously used which were made of expanded polystyrene (EPS), the new polypropylene cartons for fresh fish are delivered flat, are lighter and save space. This helps to optimise palletising and transport to the wholesale stores. A life product cycle assessment showed that carbon emissions from transport and water consumption are reduced in particular.
The results of packaging optimisation in financial year 2015/16 are currently being consolidated for the METRO Cash & Carry countries and will be reported in the DJSI in 2017. They will also be incorporated into the Circular Economy Agreement of the Retailers’ Environmental Action Programme (REAP), which METRO Cash & Carry signed in May 2016.
When composing and putting together its product ranges, METRO Cash & Carry makes a point of including regional goods. By buying products such as fruit, vegetables and meat from local growers and producers, the company not only meets its customers’ growing demand for regional products. METRO Cash & Carry also assists and supports its suppliers, thus contributing to the economic growth of the regions together with its customers. With its local purchasing strategy, the wholesaler also makes an important contribution to sustainability: it improves the carbon footprint of the goods. Additionally, shorter transport routes reduce costs.
Examples from the various METRO Cash & Carry countries
At the wholesale store in Berlin-Friedrichshain, Germany, METRO Cash & Carry grows its own herbs and vegetables. The plants grow on a thin, nutrient-rich layer of water in a space-saving, vertical unit – without the use of pesticides. Another unit was installed at the wholesale store in Antwerp, Belgium, in 2016. Read more about FoodTech.
Since January 2016, the northern German METRO Cash & Carry wholesale stores have been offering their customers local pork from the regions of Schleswig-Holstein, Lower Saxony, Hamburg, Bremen, Mecklenburg-Western Pomerania and Brandenburg under the trademarks “Bestes vom Schwein aus dem Nordosten” and “Bestes vom Schwein aus dem Norden” (the best pork from the north-east and the north respectively). The PRO TRACE app allows customers to trace products and obtain details concerning the origin of the pork in a specific batch and the way it was processed. In the medium term, this concept is to be implemented in other regions in central and southern Germany too.
METRO Cash & Carry Hungary offers around 90 regional and traditional sausage and meat products under the own-brand name Corvinus. They are of particularly good quality. Some of them are produced on the basis of traditional recipes and original production methods, and bear a label indicating their region of origin.
Since February 2015, MAKRO Cash & Carry Spain has been supporting growers and producers in the immediate vicinity of the wholesale store who produce agricultural products in a traditional way with the Alma Makro initiative. The objective is to strengthen the local economy and preserve special regional products and their unique flavour.
In Italy, the Filiere brand signifies sustainably produced goods such as meat and fish as well as fruit and vegetables. The product range already comprises 496 different items.
To support local agricultural growers and producers in Ukraine, METRO Cash & Carry initiated the Fermove project in May 2016 in collaboration with the agricultural company Syngenta. The aim is to improve the local supply structures and establish a platform for fruit and vegetable growing in Ukraine. Thirty agricultural enterprises are already participating in the project.
Since 2015, METRO Cash & Carry Turkey has been supporting a project of the Turkish Ministry of Food, Agriculture and Livestock at the University of Istanbul which focuses on the protection of a specific breed of sheep. This breed is native to Thrace, a region on the eastern side of the Balkan peninsula which is now part of Bulgaria, Greece and Turkey. The meat of the animals is distinguished by its excellent quality and a special flavour, and is therefore in great demand. The purpose of the cooperative partners’ joint project is to generate incentives for sheep farmers and meat producers to maintain the animals’ purity of breeding and increase their numbers.
With the Local Seed project, METRO Cash & Carry Turkey also advocates the protection of natural and original seeds. In this effort, the company works closely with local growers and producers from Anatolia and guarantees that it will purchase the complete harvest of agricultural products which are characteristic of the region and are grown using local seeds. About 25 products from the region which are marked with a special logo are already exclusively available at the Turkish wholesale stores.
Promoting a healthy diet and sustainable consumption
METRO Cash & Carry aims to enable traders and their customers to eat a healthy diet and, in so doing, to promote sustainable lifestyles. The company therefore not only carries a comprehensive range of fruit, vegetables and fresh products, but is also expanding its selection with the addition of vegan and special products such as lactose- and gluten-free items for consumers with food intolerances. For example, since early 2015, customers in the German METRO Cash & Carry wholesale stores have been offered a wide array of goods without animal ingredients. In 2016, the portfolio was expanded by 37 items to a total of 177 vegan products, including numerous types of cheese and meat alternatives.
In China, METRO Cash & Carry put up special campaign stands in certain wholesale stores in Shanghai, Beijing and Guangzhou during the METRO Sustainability Week 2016 in order to inform customers specifically about the company’s sustainable product range. At the stands, store employees presented a wide selection of sustainable items – from organic vegetables and grain products to traceable vegetables, FSC®-certified paper products and MSC-certified fish products.