Why Kraft Heinzâs Suppliers Hold the Key to Net Zero
The challenge of transforming a major food and beverage producer into a sustainable operation lies predominantly within its supply chain.
For Kraft Heinz, the path to net zero by 2050 could depend less on what happens inside its factories and more on what occurs across thousands of supplier relationships worldwide.
The US$27bn (ÂŁ21bn) conglomerate faces a sustainability puzzle that mirrors the predicament confronting many consumer goods manufacturers. Around 80% of its carbon footprint originates from suppliers, with agriculture and ingredients comprising the bulk of that figure. This reality means the company's environmental credentials could hinge on its ability to transform farming practices across its entire procurement network.
Kraft Heinz has committed to reaching net zero across all three emissions scopes by 2050, with an interim target of 50% reduction by 2030.
Carlos Abrams-Rivera, the conglomerate's CEO, says: "To be the leader in elevating and creating food that makes you feel good."
Yet, translating that ambition into measurable progress could demand coordinated action throughout a complex supply chain.
Transforming agricultural procurement networks
The company's position as the world's largest corporate tomato buyer presents both a challenge and an opportunity for supply chain transformation. This concentration on one crop creates a focused point for implementing sustainable sourcing practices across its agricultural network.
The firm has set a goal to source 100% of Heinz ketchup tomatoes sustainably by the end of 2025, measured against its Sustainable Agriculture Practices Manual.
According to the company's 2024 ESG report, it is on track to make good on that pledge. Kraft Heinz's sustainable agriculture framework sets out detailed requirements across seven areas, including soil health, water management and integrated pest management.
Carlos describes his company's philosophy on this front as "equally focused on productivity, environmental stewardship and prosperity".
The approach reflects founder Henry John Heinz's century-old ethos: "In order to improve the product on the shelf you must first improve the produce in the ground."
Manufacturing and operations efficiency
Across its 75 manufacturing facilities, Kraft Heinz has managed to reduce its Scope 1 and 2 emissions substantially through investments in decarbonisation projects and renewable electricity procurement.
According to its 2024 ESG report, the firm sources 22.3% of its electricity from renewable sources, up from 7% in 2021, supported by virtual power purchase agreements including a 158 MW wind farm in Texas.
Two of Kraft Heinz's Indonesian factories have achieved emissions reductions of more than 95% compared to 2021 by replacing coal with sustainable biomass, installing solar systems and securing renewable electricity contracts. The conglomerate's water use in high-risk watershed areas fell 19.5% against the 2019 baseline, nearly achieving the 20% reduction target through recycling programmes and efficiency measures.
However, Kraft Heinz's progress on other manufacturing goals has proven more difficult, particularly regarding packaging materials sourced through its supply chain.
Supply chain complexity
In 2023, Kraft Heinz announced a commitment to reduce virgin plastic use by 20% by 2030 from a 2021 baseline. By 2023, 87% of its packaging was recyclable, reusable or compostable.
The company became a founding member of the Circular Action Alliance, a not-for-profit organisation that promotes producer responsibility laws in California and Colorado. The firm has made inroads with green packaging, including recyclable lids for its Heinz ketchup bottles in the UK.
It has also incorporated 100% recycled content into its Kraft mayonnaise bottles in the US. These initiatives demonstrate the company's commitment to addressing packaging sustainability across multiple markets.
As is the case with most companies, Scope 3 emissions make up the lion's share of Kraft Heinz's carbon footprint, measuring 24.3 million tonnes COâe in its most recent accounts. This figure highlights the critical importance of supplier collaboration in achieving decarbonisation targets.
In an effort to disseminate a culture of sustainability throughout its supply chain, the American company held its first supplier sustainability webinar in 2023, where its team shared net zero ambitions and sent its partners a starter kit for decarbonisation efforts.
Kraft Heinz also keeps a focus on upholding human rights across its network, with the likes of EcoVadis and Sedex helping it to complete due diligence regularly. Of course, Kraft Heinz acknowledges substantial work remains ahead – but good supply chain progress is always a cause for celebration.
