How one international beverage producer is taking «collective action» to transition to deforestation-free supply chains

5 octubre 2020

Interview series with Chief Sustainability and Procurement Officers working to develop innovative solutions for deforestation-free supply chains.

AJE is multinational company dedicated to the manufacture, distribution and sale of alcoholic and non-alcoholic beverages. This includes an assortment of juices, nectars, light beverages, bottled natural water, dairy and beer. Headquartered in Peru and Madrid, it employs approximately 10,000 people in 22 countries across five continents. Besides Peru and Mexico, it operates in Brazil, Costa Rica, Dominican Republic, Ecuador, El Salvador, Nigeria, Guatemala, Honduras, India, Indonesia, Thailand, Venezuela, Vietnam and Egypt. It is the 12th largest multinational company in Latin America, and is privately owned.

This private sector company is an active member of the newly launched Peru Coalition for Sustainable Production, and has recently committed to purchasing sustainably produced Amazonian fruit from indigenous communities within Peru’s Amazonian forest.

AJE Chief Sustainability Officer Jorge López-Dóriga offers more details on the company’s strategic approach to avoid deforestation from its supply chains.

Q: Why is sustainability important for AJE?

For Grupo AJE, it is important that human beings recognize the damage and devastating effects the industrial revolution has caused the planet and that we all have a change of consciousness. This is the precise moment that companies and people must be engaged in the natural revolution, revaluing what Mother Nature offers us and protecting the planet. As part of this, AJE has been working on actions that maintain and care for the forests, as well as empower native communities through the purchase of their Amazonian super fruits.

Q: What is your role as AJE’s Chief Sustainability Officer?

My job is to take our business model, which originated in the industrial revolution and which damaged natural resources, and to transition this and our operations towards a natural revolution. Although it is true that Peru was not part of the group of countries that participated in the industrial or technological revolution, now is the time to be the ones to lead the natural revolution, because the countries that have natural resources and biodiversity are those that are positioned to be the main actors on this new stage.

AJE seeks to create a “triangle” of sustainability with a product that is beneficial to the health of the consumer, thanks to its natural components; that helps to conserve Peruvian tropical forests, highlighting forest fruits; and that positively promotes the local communities involved. It is time to highlight the importance of green gold promoting bio-businesses, those that see the value in the green economy.

Q: Why did AJE make the decision to become part of the newly launched Peru Coalition for Sustainable Production?

At AJE we are aware that resources are finite, and that if we don’t take care of them we will run out of them. We are transitioning from the concept of ​​producing and consuming to the concept of ​​conservation and sustainability, we are committed to this and we consider it to be our competitive advantage.

Amazon deforestation is an economic and social problem. Local communities do not cause damage to the forests because they are bad or ignorant, they do so because they think they will have better economic resources if the forest is cut down, it is a short-term view. That is why AJE is developing sustainable and eco-friendly production chains in the Amazon, to be able to give value to forests and the standing palm tree. If we manage to convince the world that green gold is worth more than black or yellow gold, that is, showing the ecosystem value of the forest, than we see and are demonstrating that in the medium and long term, that a standing forest has more value than simply what lies in the earth beneath it, I’m sure nobody will think of destroying it.

Q: Why is a “collective action” approach, such as the Peru Sustainable Production Coalition, of which AJE is a member, an effective way to create change?

Through collective action, the competitiveness that was born in the industrial revolution is transformed into the natural revolution in collaboration with business groups and people with a commitment to the environment.

Grupo AJE is a Peruvian company whose founders were born in the countryside, in San Miguel in Ayacucho. They learned from Peruvian ancestral communities the value of collaborative effort. If we want to face the humanity’s great challenges we must collaborate, not compete. Additionally, to overcome the many challenges that create bottlenecks in the Amazon fruit value chains, collective multi-actor action is required.

Q: What role do you feel the private sector can play to create more sustainable supply chains?

The private sector and large companies have an important influence on people and the government. If the private sector is engaged in protecting the planet, a multiplier effect can occur that is very effective. The average person and Amazonian communities often feel powerless in not being able to achieve change, because they do not have this level of influence. Therefore, a private company can play an important role to facilitate this to occur.

For example, Peru has commitments in relation to the Paris Agreement on climate change. Therefore, by creating a sustainable supply chain of aguaje (Mauritia flexuosa) and camu camu (Myrciaria dubia) fruits, we are protecting Peru’s main carbon reserves from being released into the atmosphere, which would have catastrophic consequences for humanity. The flooded forests where the aguaje grows in Loreto retain 30 times more CO2 than was emitted by the fires in Australia last year.

Another of the milestones achieved and that fills us with great pride, is the Machu Picchu Project for a circular economy. We work together with the organization Inkaterra and the Municipality of Machu Picchu. Currently, we have already installed machines that allow the municipality to manage its solid waste. One of them is a compactor so that all the plastic that reaches Machu Picchu is compacted and sold, thus preventing it from ending up in a sanitary landfill in the Sacred Valley.

Q: What are some of AJE’s supply chain products that you have identified as having a relationship with tropical forests?

This includes the BIO drink AJE makes from Amazonian fruits including camu camu and aguaje. This experience has been challenging and very satisfactory because Peruvians already knew these fruits, yet we were unsure what their response to these beverage products would be.

Before launching the BIO beverage product, we conducted market research that showed 60% of consumers in Latin America want to buy products that protect the environment because they value it and care about it.

In the specific case of Peruvians, they are interested in products that take care of their health and improve their immune system. These fruits are super foods and have 50 times more vitamin C than an orange. For this reason, we believe that this great acceptance is due to the fact that they are 100% natural products, without added sugar and made from wild fruits.

Photo (left to right): Alfredo Neyra, chief of Pacaya Samiria Protected Area; Jorge Lopez Dóriga, director of communication and sustainability, Aje Group; Golbert Murrieta Huayta, Member of 20 de Enero Native Community; Arvildo Uraco, lead of management committee, Pacaya Samiria Protected Area; Alejandro Barrios, biobusiness lead, Naturaleza y Cultura Internacional.

Q: How is AJE working with Peru’s Amazonian forest indigenous communities to reduce deforestation from its supply chains?

For AJE, working with communities is fundamental. In collaboration with them we help them to create cooperatives with local value – both to launch and successfully implement them. This enables us to develop efficient distribution chains that have “caring for the environment” as one of the key values.

At AJE we have a policy to empower communities so that they themselves can protect their habitat. Intriguingly, the use of camu camu and aguaje tropical forest fruit in the production of our BIO drink — and the commercialization of these fruits — can prevent deforestation of the Amazon. When a community has income and resources, they protect that area. For this reason, we are reinforcing the strategy to bet on these tropical forest fruits.

The Amazonian communities are not farmers but rather foresters. They live from the forest, and their interest is to protect and care for it. They have done so for thousands of years. The concept is to empower them to have the resources to do what they have always done, which is protect the Amazon forests. What have you found to be some of the specific challenges for a company such as AJE to advance its commitments to reduce deforestation from its supply chains?

Q: What steps does AJE take ensure environment and social standards are met when working together with indigenous communities?

We ensure this through the strong alliances that we have forged through our sustainability work. As leaders of the natural revolution, we have constant coordination with the Ministry of the Environment in Peru (MINAM), which facilitates the implementation of our management plans in the communities.

We also have other alliances, such as that with the Natural Service of Protected Natural Areas (SERNANP) to promote the value of these areas and to support their guardians; and alliances with regional governments and non-governmental organizations that are also part of the actions we take to achieve our objective of protecting the Amazon. This includes the non-governmental organization Nature and Culture International (NCI), which trains communities in the sustainable harvesting and management of the Amazonian fruits, as well as advising them on the commercial and financial side.

These alliances, in addition to working together with the communities, ensures that the production and commercialization of our products meet the social and environmental standards of indigenous communities.

Q: What have you found to be some of the specific challenges for a company such as AJE to advance its commitments to reduce deforestation from its supply chains?

The great challenge has been to create a supply chain from scratch for the Amazonian fruit, as this did not exist, and was made more difficult due to the remote location in the Peruvian Amazon.

Another challenge was to initiate a direct relationship with the Amazonian communities, something new to Peruvian companies. We had to consider that these communities were not familiar with a market economy. We forged a direct business relationship with the community members, and this has been recognized by the communities.

Q: How have you managed to overcome some these challenges?

To overcome these challenges, we had to work hand in hand with many public organizations and communities, it was a joint effort, with Minam, Sernanp, Regional Governments, non-governmental organizations and the Amazonian communities.

We signed an agreement with the Minam, we signed an agreement with the Regional Government of Loreto to promote aguaje fruit and in Pucallpa to promote Camu Camu fruit. In addition, we are part of the Coalition for Sustainable Production in Peru (supported by the Tropical Forest Alliance), which has included Amazonian tropical fruit chains as one of its prioritized areas of work.

Q: What challenges have been too difficult to overcome, and why?

One of the great challenges has been to create the enabling conditions necessary to carry out the project. This was achieved – through collective action – working hand in hand with the public and private sectors, NGOs and communities. The community management plans required high costs and long terms, which was another great challenge. These were adjusted, thanks to the efforts of the Ministry of the Environment and other organizations. Through this collective effort, these plans were finally adapted to the capacities of the communities.

Finally, another great challenge was to create and organize a “cold chain” so that these Amazonian super fruits could reach the pulper to be frozen and then be transported to the capital.

Q: What opportunities or benefits have emerged through this process that AJE may not have predicted at the onset?

The openness of the communities to work together with a private company was a welcome surprise. For years, the relationship between local communities and the private sector had been in conflict, as industry has damaged many forests in the Amazon. However, with this AJE initiative, this joint work has been successful because both the local community and the private sector have the same objective: to take care of the environment.

Another big surprise has been the positive response of Peruvian consumers to these Amazonian fruit drinks and to this movement. Sales have tripled since the product launch less than a year ago, showing that there are conscious consumers willing to take care of their health and that of the planet.

Q: What are your future plans for AJE to work collectively with others to continue to reduce deforestation from its supply chains.

Our goal is to expand our Amazonian fruit collection and management area to more communities and more forest areas at risk. The more beverages are sold, the need to acquire the fruit will be greater and likewise more communities will be included in the project. In this way the sustainable production of these fruit trees will be extended to more hectares of forest. We now plan to expand the sale of these beverage products in other countries.

Q: Any other thoughts or experiences that you would like to share?

To reaffirm our commitment, we are also implementing other important national development projects in Peru. This includes the installation of water wells in the Pacaya Samiria National Reserve, with the intention that these will benefit the surrounding local communities. It will provide the resources needed by them for both their own daily consumption as well as for agricultural activities to expand production of the Amazonian fruit trees.  

We are also installing solar panels in the 20 communities located in this protected natural area, which will power the water wells and also bring Internet connectivity to the communities – enhancing the work processes and as well as the education of children in the communities.


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