Optimising infrastructure to support a 24/7 portfolio
Optimising and developing our infrastructure also supports our expanding 24/7 portfolio. By centralising our production planning system for the whole Group, with each plant serving regional needs, we have been able to meet market demand with speed and agility. This is supported by expanding production capacity in targeted markets, including Nigeria and Russia, where we anticipate strong future growth.
We have also upgraded production lines to support product innovation. For example, we invested in a new premium glass packaging line for FUZETEA in the Czech Republic and Romania and for Coca-Cola Energy in Hungary, as well as investments to support the production of Cappy Lemonade and Coca-Cola signature mixers in Romania.
In Italy we recently invested in new production capabilities for different package sizes, a new aseptic PET line at our Nogara plant to accommodate Adez in our expanded 24/7 portfolio and new TriBlock technology in a PET line in our Marcianise plant. TriBlock technology helps us use production space more efficiently and reduce water and energy consumption.
To manage the increased output from our mega plants and the complexity of our expanded 24/7 portfolio, we continued investing in automation for our high-capacity warehouses. Automated warehouses, and automatic guided vehicles, improve both efficiency and service quality.
Sustainable sourcing
The sourcing of our raw materials accounts for a large portion of our economic, operational and environmental footprint, and the behaviour of our suppliers directly impacts our sustainability performance. We therefore consider our suppliers as critical partners, as well as contributors to the ongoing and sustainable success of our business.
Ingredients are sourced under a common approach across the Coca-Cola System and governed by The Coca-Cola Principles for Sustainable Agriculture .
The PSA and the System is covering a large scope of ingredients, including but not limited to, sugar, HFCS, different types of juices, cereals, dairy etc. As the majority of the key ingredients are purchased together with The Coca-Cola Company (TCCC), as a result, we address many of the issues that we face in our supply chain as a joint Coca-Cola system.
Each bottler has a different mix of agricultural ingredients in scope, always relevant to their market and product mix. Of all PSA categories, the ones that are relevant to Sweeteners (Sugar & HFCS) and Juices (Fruit crops).
CCHBC we also operate as Distributors for a number of products that we treat as Finished Goods Distribution business. We purchase the requirement of coffee, tea and plant-based drinks (Soya, Almond, Coconut, Oat & Nuts) for Coca-Cola trademark beverages from TCCC. All coffee, tea and plant-based drinks suppliers of TCCC must demonstrate compliance with the PSA by using global sustainable agriculture standards and assurance schemes, including Rainforest Alliance and Fairtrade.
As part of the Coca-Cola System and one of the biggest bottlers participating, our principles are routed in protecting the environment, upholding human and workplace rights, securing biodiversity and helping to build more sustainable communities. These principles are showcased in the Principles for Sustainable Agriculture (PSA), which provide guidance to our suppliers of agricultural ingredients. The PSA is covering a large scope of ingredients, including but not limited to, sugar, HFCS, different types of juices etc. Each bottler has a different mix of agricultural ingredients in scope, always relevant to their market and product mix. Of all PSA categories, the ones that are directly sourced by CCH are only Sugar, HFCS and Juices (Fruit crops). The scale and uniform approach of the Coca-Cola System helps us source our raw materials sustainably, while mitigating business risks. This helps us balance the costs of sustainability by leveraging relationships and initiating new opportunities, ensuring that our agricultural suppliers and their suppliers have a sustainable business. All suppliers are required to meet our Supplier Guiding Principles. These principles communicate our values and expectations of compliance with all applicable laws and emphasise the importance of responsible workplace practices that respect human rights.
Bonsucro is the Coca-Cola System most preferred sustainable sugar standard. TCCC, on behalf of the System, worked with Bonsucro members to create the first global metric standard for sustainable sugar cane production, and was the first to purchase Bonsucro certified sugar in 2011. TCCC also achieved Bonsucro Chain of Custody Standard certification, which enables the tracking of claims on the sustainable production of Bonsucro sugar cane and all sugar cane-derived products along the entire supply chain.
Through our active recruitment of our sugar suppliers and continuous support of the Bonsucro Certification, we leverage Bonsucro specialists to work with businesses of all kinds across the sugarcane sector to improve their social, environmental and commercial performance, bringing together a thriving international community that is creating a sustainable modern industry.
Bonsucro use their expertise to deliver training, develop resources and run impact projects and help our critical T1 and T2 supply base make the changes needed to achieve sustainability and gain independent certifications when they successfully do so.
Responsible production and resilient supply chains create lasting value. Businesses, communities, and the environment all benefit from high standards. Certified Bonsucro members perform better than the average on key metrics (source: Bonsucro):
- Certified mills produced 4.9 million tons of sugar using 2.2 million m3 less water compared to 2017
- Bonsucro-certified operations globally exceed their target yields by an average of 8.65 additional tonnes of sugarcane per hectare
- On average wages are 20% above national minimum wage on Bonsucro-Certified farms
- Certified mills reduced their CO2 emissions by 5.5% after just one year
This framework for sustainable sourcing is integrated into internal governance and procurement processes. Our 2025 target for ingredient sourcing is to achieve 100% certification of our key agricultural ingredients against the Sustainable Agriculture Guiding Principles. In 2021, 80% of the key commodities we purchased for use as ingredients were certified, down from 82.4% in 2020. Specifically, we achieved 75% in Sugar & 100% in HFCS (79.3% in Sugar & HFCS together) and 96% for Juices (Fruit crops). The small drop is attributed primarily to our healthy growth rate in sales for non-European markets where we are still working towards the certification of our local suppliers. Our work to certify our key agricultural ingredients will continue to expand in 2022, with close cooperation with suppliers and the Coca-Cola System.