Responsible Sourcing at Bacardi Limited

Bacardi’s commitment to being corporately responsible extends into every aspect of our business.

Responsible Sourcing

Aligned with the Bacardi Good Spirited initiative, our Responsible Sourcing vision is for all raw materials and packaging to come from sustainably sourced, renewable or recycled materials – reducing environmental and social impacts, while maintaining or enhancing the economic status of growers and suppliers.

The quality of our materials is a priority for Bacardi and we aim to use only the finest ingredients in making our premium spirits. We recognize the challenges faced within the supply chain, including ethical sourcing, compliance, advancing human rights and reducing environmental impacts. Bacardi believes in building strong, cooperative relationships with our suppliers and we work together to ensure suppliers meet our global sourcing and supplier standards.

Our Approach

Bacardi’s Responsible Sourcing Standards apply to all suppliers providing goods and/or services to Bacardi. The standards encompass what we expect from our suppliers in terms of labor standards, human rights, health and safety, environmental protection and business integrity. These standards, along with our Vendor Qualification Process (VQP), represent the minimum requirements for our supplier partners.

Our VQP covers important topics with potential vendors, including:

  • Commercial Questionnaire
  • Global Quality Risk Questionnaire
  • Responsible Sourcing Questionnaire
  • Factory Information Questionnaire

In order to trade with Bacardi, vendors must comply with the standards set out in these documents and ensure their suppliers and subcontractors do likewise. We require the agreement to and return of a satisfactorily completed and executed copy of these documents, for each manufacturing plant used, including principal subcontractors (i.e. where main manufacturing is outsourced). Bacardi is committed to only selecting suppliers (vendors, agents, and manufacturers) that strive to conduct business in a professional and ethical manner.

Sustainability is one of the six main value drivers that we have included in our Supplier Integration Program, which is aimed at defining a common vision and action plan across the value chain. Through this program we work with suppliers on the benefits of local sourcing, reviewing our specifications to reduce our footprint and other ways to reduce our environmental impact.

Our Responsible Sourcing program prioritizes engagement and assessment efforts with Global Direct and Global Point of Sale suppliers where we have the best opportunity to work with them and influence their standards. Bacardi Global Direct suppliers include raw materials and packaging producers. Our Point of Sale suppliers include branded bar-related materials, promotional giveaways and glass drinkware. We ask our suppliers to join Sedex to share information with us, and any other customers, on their relevant standard; and to take a similar approach with their suppliers, as we recognize there are risks further along our supply chain.

We have developed additional category specific approaches for some significant supplies. For example, sugarcane-derived products are our most significant agricultural supply and we are working with our suppliers and industry groups to ensure all suppliers achieve certification to the Bonsucro standard by 2022. This is still our highest priority and we are on schedule to meet this goal by the end of 2017. Further, we are developing Responsible Sourcing strategies for our other key agricultural ingredients.

Supplier Engagement Approach

In FY14 we implemented a third-party Responsible Sourcing audit schedule. We do this in partnership with Sedex, a nonprofit organization dedicated to improving ethical business practices in global supply chains. Using the Sedex Audit Management Service we engage our suppliers in our Responsible Sourcing program, ensuring they develop a self-improvement action plan with our Category Managers. As of the end of FY16 we have 84 audited suppliers for raw materials and 51 for packaging. In FY16 we reached a 79% rate of spending with Sedex linked Direct suppliers; for our Global Point of Sale suppliers it was 96%.

Sedex Audit Management Service Process

Moving Forward

Responsible Sourcing continues to rank high among our stakeholders as a priority matter and it will remain a focus of our CR program. However, due to an internal realignment of our Operations and Procurement functions in FY16, some of our initiatives were delayed. With new leadership in place long-term strategies are now underway to deliver our Responsible Sourcing vision. In FY16 we undertook training with all our Global Operations team to inform them of progress across our Good Spirited program including Responsible Sourcing. This training will be shared with all strategic suppliers over the next few years.