Spicing up sustainability with Verstegen

Intro, Highlights & Lessons

We are speaking to Marianne van Keep, Director Sustainability and Purchasing at Verstegen Sauces & Spices. Verstegen is a true household name in the Netherlands with a 130-year legacy, and has won the Public’s award as most sustainable company in the Netherlands in 2019. Offering customers the broad portfolio of Verstegen’s spices and sauces, requires a complex process which involves a vast array of plants and people. Verstegen has taken the responsibility to not only focus on their own profit, but also take into consideration the impact of their numerous value chains on planet and people.

As a pioneer in CSR in the Netherlands (Dutch: ‘MVO’), Marianne is now responsible for both sustainability and purchasing at Verstegen – a logical, but uncommon combination. We speak to Marianne for this interview via video-conference due to the Covid-19 pandemic and resulting lockdown. These circumstances already point to how Verstegen’s focus on sustainability delivers a resilient organization and ecosystem (which shows in their long-term supplier relationships, but also in how they offer job opportunities to people from the hospitality industry who were out of work due to COVID19, to support Verstegen with their production facility when sick leave increased).

Beyond the ‘traditional’ CSR that tends to focus on minimizing negative impact and ‘doing good’ on the side, Verstegen is actively incorporating sustainability into its core business strategy. Why, how and what can we learn from Verstegen on sustainability? Here are three lessons that we found most inspiring. Please scroll down for the full interview;

  1. Create Focus. Because doing business sustainably is such a broad concept and everything is interconnected, it is easy to want to do too much. Over time Verstegen got better at focusing on the themes that link to their core business, are sufficiently tangible and where they can make the most impact. For Verstegen, these are:
  • Create a path towards becoming ‘climate-positive’
  • Incorporate agroforestry into the core business
  • Make sure to work with empowered, healthy and entrepreneurial farmers and partners with future-proof incomes.

2.      Propel yourself and various partners forward through transparency. Even if you are not yet where you want to be, it is a great way to start, show progress and build trust. And what is nice with transparency: even those that don’t seem to be fond (yet) of sustainability as such, are mostly still in favour of transparency. So everybody wins (except if you have something to hide, but that’s a different story).

3.      Make the entire value chain more sustainable, through close collaboration and local presence with partners. This works both ways: understanding local circumstances and ideas tends to enrich concepts (and are necessary to bring them to life), and sharing your own ambitions and ‘DNA’ is necessary to craft successful partnerships in the long run. The domain of agroforestry is a case in point; for Verstegen it is a way to combine their ambitions on planet (a.o. capturing CO2, biodiversity), people (farmers income and well-being) and long-term prosperity quite well. Yet the opportunities and crop combinations differ widely in different regions (see examples on Verstegen’s website).

Beyond these lessons, we found the drive and passion for doing business sustainably, that Marianne radiates, positively contagious.

Structure/ interview method

We use our Value Creation Loop and Sustainability Visor frameworks to structure the interview. It results in 7 questions which guide the interviews in this ‘Sustainability Pioneers & Frontrunners’ series. They are: 1) The What; 2) The Why; 3) The How; 4) Sustainability meaning & benefits; 5) With Whom; 6) Trade-offs between the 4 P’s; and 7) Next horizon.

1. WHAT – Which Value Creation elements are most crucial (source, create, sell & use, re-value and ‘move’) for operating sustainably?

For us, the way we source is key to our business success; and our business can only be successful in the long run if it is a sustainable business. I am still surprised that Verstegen seems to be the only (Dutch) trading company that combines the responsibility for purchasing and sustainability. Whereas for many companies a big part of the sustainability impact, positive and negative, can be made in the extended supply chain.

In our value chain, we choose to work with farmers/cooperatives rather than aiming to ‘own & operate’ the farmlands ourselves. This aligns well with the entrepreneurship that we ourselves value as a family-owned business; we prefer to appreciate and drive local entrepreneurship. Of course this is a trade-off because it means you can’t have everything exactly the way you would prefer.

To navigate this, we found it is vital to really be ‘on the ground’ with a local presence and co-develop with our value chain partners. Trying to make an impact in for instance Indonesia from behind a desk in Rotterdam, just won’t work.

On the market side, we listen carefully to our customers and test new avenues with them. That said, we are not afraid to be ahead of the curve here: we might still go ahead if initial customer testing is not fully successful, if we are convinced that it is important and the right thing to do.

2. WHY – Purpose-driven company, how did this come about and what is the impact?

From its origin, Verstegen has always focused on high-quality, reliable inputs. Developing long-term relationships and fostering transparency are great ways to do that. Add to that the family heritage with values such as entrepreneurship, sobriety and caring for others – and it is easy to see why sustainability aligns closely with our DNA. As a company from Rotterdam, we also prefer to act instead of talk about things like sustainability: just start and experiment and learn along the way!

It has developed over the years. Our previous CEO (Jan Driessen, active from 1979-2009, ed.) has emphasized good care for employees and pioneered our extensive use of ‘social workers’ in our production process. Our current CEO, Michel Driessen, used that as a stepping stone and has a deep intrinsic motivation to continuously do better on planet, people & participation aspects and thus build a thriving, resilient company.

3. HOW; Structuring the business, which element is most differentiating for sustainable impact? (Leadership, Strategy, Innovation, Organisation, Assets & Risk and Metrics)

Leadership does make the difference for Verstegen. “Michel (Driessen; CEO since 2009, ed.) has a strong intrinsic motivation to make Verstegen (more) sustainable. I’ve been active in CSR (Dutch: “MVO”) since the 1990s way before sustainability was even a label. Back in 2015 we increased the emphasis on Verstegen, and when I asked who would lead this – he said he only had one person in mind: me. So far we’ve been an effective tandem to champion the theme within Verstegen; and we’ve found that over the years we keep inspiring and motivating more and more people in (and outside) Verstegen with our intrinsic drive. Partly due to Verstegen’s Rotterdam heritage, our style is also one of learning by doing”.

Both ‘organization’ and ‘strategy’ also play a role. “On the one hand, we have always been a close-knit team at Verstegen, and we see that people in our organization are (even more) proud to work here through the sustainability focus and various initiatives. On the other hand, we see that sustainability is also imperative from a strategic point of view: if we don’t do this now, there will not be a Verstegen company in 30 years.” This combination of hopes & worries for the future is driving Verstegen to take up its responsibility collectively.

“We also see that creating focus is a crucial element: by choosing what to address first, it is easier to build traction and use that momentum to pick up the next thing. Because sustainability is so broad and everything is interconnected, it is easy to spread yourself thin”; thus risking making little progress on a long list of sustainability initiatives.

4. SUSTAINABILITY meaning and benefits for Verstegen? (ecological definition: “The properties and abilities of systems to remain diverse and productive indefinitely”)

“A huge intrinsic motivation to pursue sustainability for us is: how do we pass on a future-proof sauce & spice company in 25 to 30 years time? Operating sustainably is the only way; sustainability and passing on a viable company to the next generation go in hand in hand. That being said, many of us at Verstegen, including myself, feel a strong responsibility to do what is needed in today’s world”.

“Many themes have intricate relationships and it is not obvious to know where to start, for example: if we want to promote education and eradicate child labor, we’ve found that the best way we can do that is not by putting up schools or ‘policing’ on child labor. Rather, by ensuring good working conditions and a ‘living income’ for the workers, they are able to look after their families and are empowered to send their kids to school instead of to the plantation.”

When we talk sustainability and how to incorporate this into the core business, a massive theme for Verstegen is agroforestry. Why? “It ties our sustainability priorities together and offers a route towards a resilient, long-term business model for us, the farmers and our partners”. Combining different crops in different growth layers has various environmental (soil quality, water usage, capturing CO2) and it helps create a stable, resilient income for the farmers.

Apart from all the longer-term results of operating sustainably, Marianne also sees more immediate results: an important one is the recruitment of talent. “We need great people to turn our visions and ambitions into reality, and have found that our reputation has gotten even better through our emphasis on sustainability; we are proud to be an employer-of-choice”.

We work with many solid NGO partners to achieve our goals. It is promising to see that most NGOs have now ‘emancipated’ in a way and are thereby better able to truly partner with businesses. Not all of them are able to look beyond their own agenda and appreciate the wider system, though.

Have we encountered opposing forces in our ecosystems? Interestingly enough, we have not really come across those. What might help: we are sizeable but not a huge company, and somehow people tend to like us because we bring flavour and variety into their kitchen.

On the ‘Competitors & Cooperations’ level, we take an active role in forging local industry coalitions in the Netherlands and Indonesia. Sustainability aspects are prominently on the agenda in these forums, and not as a ‘nice-to-have’: most spice companies share our vision that the only way into the future is by participating and considering planet, people alongside prosperity or profit. The so-called ‘carrot’ therefore suffices with most producers. Some need a little more convincing, but the ‘stick’ of future regulations tend to work well. It is easier (and cheaper!) to create a sustainable path now, instead of reactively (re-)doing things when EU or national governments force companies to do so.

6. TRADE-OFFS – how are you balancing the 4-P’s: Planet; People; Profit; Participation?

Leading in sustainability comes with inherent trade-offs. An obvious one is: what ‘price tag’ do we put on sustainability? Investments in sustainable initiatives usually precede longer-term returns, and there is an abundance of additional projects that we’d also want to do.

Another trade-off happens on the market side of our business: are we fully open and realistic or optimistic and slightly selective on where in our journey we stand? There is some natural friction with the commercial teams; but in the end we all agree that full transparency is key, also for the consumer..

7. NEXT HORIZON – what are future sustainability ambitions and desired impact?

The answer to this question is clouded with some uncertainty due to covid-19 pandemic. That being said, we will continue to focus on our priorities of transparency for and with farmers; agroforestry and becoming climate-neutral. Another area that we are currently looking into, is how to further incorporate various sustainability criteria into our purchasing process and decision-making.

Several experiments are entering the next phase where we look at scalability and returns (across dimensions). This is exciting!

Note: pictures courtesy of Verstegen Spices & Sauces B.V. & Unsplash