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Grupo Bimbo embracing regenerative agriculture

2023.02.28

MEXICO CITY — From wind farms and electric vehicles to waste reduction programs, Grupo Bimbo SAB de CV for longer than a decade has invested aggressively in sustainability initiatives. Even against this backdrop of achievement, recently unveiled regenerative agriculture (RA) pilot programs represent a major new front in the company’s efforts, said David Hernandez, a global vice president and chief procurement officer of Grupo Bimbo.

 

In an interview with Milling & Baking News conducted in Mexico City, Mr. Hernandez put into perspective the importance of RA as Bimbo endeavors to progress against a pledge that by 2050, all of Bimbo’s key ingredients will be sourced from land farmed using RA practices. More broadly, the company has pledged to reduce net emissions to zero by 2050.

 

Bimbo has taken several steps to reduce Scope 1 emissions, including solar panels that have been installed or contracts with third parties and the purchase and deployment of electric vehicles. More than 10 years ago the company invested in the Piedra Larga Wind Farm in Mexico as well as the Santa Rita East wind farm in Texas to address Scope 2 emissions.

 

“We have a commitment that by 2025, 100% of our energy is going to come from renewable sources,” Mr. Hernandez said. “Also, we have these zero-carbon mobility goals, so we are converting our fleet to electric vehicles. We have already 1,300 units in Latin America — it’s 7% of our fleet, already is zero carbon emissions.”

 

Still, to achieve net zero, Scope 3 emissions (from suppliers) must be tackled.

 

“It’s a very ambitious goal,” Mr. Hernandez said of the emissions pledge. “Most of Bimbo’s carbon emissions, more than 60%, comes from our supply chain, so we have to partner with our suppliers to reduce the emissions everywhere. That’s the key part of the work that we need to do. Most of the supply chain emissions are coming from agriculture, and that’s why we are launching our programs specifically to work with the producer community.”

 

Also participating in the Mexico City interview was Hayden Wands, vice president of global procurement for Grupo Bimbo. While proud of the rapidly growing acreage already devoted to the company’s RA efforts, Mr. Wands cautioned that the program remains in a very early stage and is still taking shape.

 

“We’re just a few steps into a long journey,” he said. “We’re defining the KPIs (key performance indicators), determining what mechanism we need to measure and verify cultivation practices. Through this whole process we will need a keen partnership with our suppliers because in most cases, 99% of the time really, we don’t buy the grain directly from the producer.”

 

Mr. Wands noted that up to 32 different cultivation practices fall under the RA umbrella. Grupo Bimbo is still exploring which combinations of these practices will qualify for the company’s program.

 

Mr. Hernandez said Bimbo is accelerating the RA effort. A pilot was launched in Mexico in 2018, in the United States in 2022 and one is planned for Canada either for 2023 or 2024.

 

The RA project in 2022 encompassed 195,000 acres, including 54,000 acres in Mexico (wheat and corn) and 141,000 acres in the United States (wheat alone).

 

To develop its RA program in Mexico, Bimbo has partnered since 2018 with the International Wheat and Maize Improvement Center (CIMMYT), headquartered near Mexico City.

 

“They are the experts in field practices, everything that has to do with raising wheat and corn crops,” Mr. Hernandez said. “They were the right partner in Mexico.”

 

CIMMYT was established in 1943 by famed agronomist Norman Borlaug, who was awarded the Nobel Peace Prize in 1970 for his work to increase the global food supply. CIMMYT describes itself as a non-profit focused on agricultural research and training, dedicated to feeding the world amidst a climate crisis.

 

Mr. Hernandez said Bimbo’s objectives for regenerative agriculture revolve around three objectives — increasing biodiversity, improving soil health and enhancing the producer community.

 

“We need to make our guidelines specific, and we are working on defining the right KPIs to make sure that we are improving those three things,” Mr. Hernandez said. “As Hayden said, we are defining and measuring KPIs, and based on those we will develop the guidelines for our program.”

 

The RA program is further advanced in Mexico, though with less land enrolled. In both Mexico and the United States, participating growers are obligated to fill out surveys that describe their land cultivation practices, including chemical applications and whether they employ RA practices such as no-till or cover crops.

 

In addition to reducing emissions, the RA program is intended to improve soil health and the quality of wheat produced while enhancing the farming community. In Mexico, Bimbo is hoping that by partnering with growers, an increased proportion of Mexican wheat will be suitable for bread and other baked foods (currently, much of the wheat grown in Mexico is used for the production of wheat tortillas, cookies, crackers and other sweet goods but not for commercial pan bread).

 

The farming practices introduced by CIMMYT have helped Mexican producers enrolled in the program increase their crop yield, Mr. Wands said. As a result, the opportunity to improve the livelihoods of growers in Mexico is considerable.

 

“These practices that were introduced are really helping,” he said. “We say we want to enhance the producer community. That’s what we’re doing here in Mexico with this program because it is really aiding in their production capabilities and production output. It has raised yields.”

 

For Bimbo, a key to the effort in Mexico has been the introduction with CIMMYT’s help of a wheat variety called Borlaug 100. Adapted for local growing conditions, Mr. Wands said the variety has the milling and baking characteristics of hard red winter wheat. Bimbo’s principal partner in Mexico for recruiting RA growers is Grupo Trimex, Mexico’s largest flour milling company.

 

In the case of corn grown using RA in Mexico, Bimbo is using the corn meal exclusively for one brand — Sanissimo, a premium cracker brand.

 

While much larger in terms of area covered, Bimbo’s RA program in the United States is at a far more preliminary stage than the pilot in Mexico. Growers sign up for Bimbo’s program through a flour miller, principally Ardent Mills LLC, ADM Milling & Baking Solutions or Grain Craft with more expansion through additional milling partners planned for 2023.

 

Mr. Wands also added, “As part of our RA global commitment, we are going to expand our RA project in 2023 to South America, mainly focused in Brazil and Argentina where we use that wheat production in our operations.”

 

Helping Bimbo rapidly roll out its US pilots, the company is piggybacking on its extant Preferred Variety Identity Preserved (PVIP) program it has been running with milling partners for several years. A significant subset of the land enrolled in the RA program already is enrolled in the PVIP program. Not all the land is necessarily following RA practices.

 

The programs differ from milling company to milling company, but in each case growers commit to participating exclusively with the Bimbo RA program and will be compensated for completing the in-depth survey about cultivation practices. The survey creates a baseline for progress toward adoption of RA practices and will help inform Bimbo and the milling companies as they develop standards for RA farming growers will need to follow to participate in coming years.

 

Mr. Wands is hopeful the survey will show that, for many growers, the transition to RA will not require significant further changes.

 

“I think what we’re going to find out in the US is that some of the producers are already using RA practices,” he said. “We haven’t asked them. I think that is because the US producer is extremely successful, and they’re already employing a lot of these practices that we’re asking about.”

 

Other growers will need to make changes to continue participating in the program, he said.

 

“Some of those who are enrolled in the program, we will need to move them along the RA spectrum because some of the acres in the program aren’t going to be qualified for RA acres,” he said.

 

Mr. Hernandez said Bimbo believes RA agricultural practices will become the market standard over time and will not require a premium indefinitely.

 

“But we need to invest in the beginning,” he said. “We need to put money behind the effort. We feel strongly this is the right direction to go in, and we’re in this for the long run.”

 

Bimbo has committed to an eight-figure investment in the RA program over the next few years. The large majority of these resources will be directed to growers, to encourage their participation, but the company also is helping its milling partners recoup the cost of executing the plans and also has engaged implementation consultants.

 

“Our goal is to pass as much of that back to the producer community as possible to enhance the producer community — one of our sustainability pillars or goals,” Mr. Wands said.

 

Mr. Wands, whose career has included positions at grain as well as milling companies, has been reaching out to the grower community in recent years to find a way to communicate to growers the importance of wheat quality, not just wheat yields and low prices, to bakers and other end users.

 

“Part of this program is for us to get closer to the producer community,” he said. “In the past, they didn’t know where their wheat was going, and it was going to a mill. They didn’t know who the mill’s customer was. So we need to get closer to the producer community.”

 

While Bimbo in the United States has partnered in its RA initiative only with a few of the largest US flour milling companies, that will change over time, Mr. Wands said.

 

“Look, before we got involved with them, RA wasn’t on the radar of some of our milling partners,” he said. “We’ve pulled them along, and that’s what we will do with smaller suppliers as well.”

 

Mr. Hernandez added, “If we want to be where we want to be, to meet our goals and objectives, nobody can be left behind. No matter the size of supplier.”

 

Over time, Bimbo’s annual evaluations of suppliers will consider the supplier’s commitment to sustainability together with other factors such as quality, price, transparency, service and innovation, Mr. Hernandez said.

 

“It’s also how you treat your people, how you treat your communities, how good you are in providing nutrition, better products,” he said. “So it is an extended definition of sustainability that encompasses the planet, with the people and with the environment.”

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