Pukka Herbs on Supporting local economies

Does your company have a policy to source goods and services from local suppliers?

Yes

Our sustainability policy includes a commitment to contributing to our community through local sourcing.

We consider the definition of local to include independently owned organisations (not plcs) with both a principal base and invoice address falling within the former county of Avon. This comprises Bristol, Bath & North East Somerset, North Somerset and South Gloucestershire which is the boundary used by our Local Economic partnership.  This geographical criteria is consistent with that used by Bristol Credit Union. This corresponds to organisations in our purchase ledger with a BS (Bristol) postcode only (excluding BS26, BS27 and BS28) and BA1, BA2, BA3 and GL9. This website http://local.direct.gov.uk/LDGRedirect/Start.do?mode=1provides confirmation of local authority by postcode. This is more practical (our computer system does not allow us to search by radius) than the definition used by the Sustainable Communities Act 2007 which considers a 30 mile radius as a definition of local.

Every new team member is given a sustainability introduction which explains the importance of local sourcing and our commitment to it. Our sustainability manager monitors activities and suggests alternatives to practices observed that do not support local businesses.

In 2014, we assessed the year-to-date turnover of all of our suppliers and determined that 6% of spend met our definition of local. This includes packaging, cleaning, repair and maintenance, marketing and logistics companies which could all be sourced from national or international companies if desired.

Other UK spend was 91%. Our waste carrier is nationally operated as we were unable to find a local supplier who can collect and recycle or recover all of our waste and provide us with weights for monitoring purposes. The remaining 3% of spend is with overseas suppliers who supply ingredients that cannot be sourced in the UK, overseas distributors for international sales, finance and charitable donations.

We excluded the following items from our percentage calculations on spend:

  • Team member expenses as these could be incurred with any organisation
  • Suppliers for which no alternatives are available (both local and national) e.g. taxes, certification fees, web domains
  • Suppliers where addresses are not known
  • Contra sales

We then reviewed all suppliers with over £20,000 spend. These include our artwork supplier, packers/packaging, transport companies and herb suppliers. It also included marketing and finance interim support, which has now been recruited in-house; our building, which we are seeking to change; and Royal Mail postage. All of our suppliers have been chosen based on price and service (which includes ethical considerations). For example, the freight of all of our ingredients is carried out by an SME located in Essex. This supplier commits to shifting from road to rail transport for full container loads which is deemed more desirable from a sustainability perspective than sourcing locally.

At Pukka, we are committed to maintaining long-term trusting relationships with our suppliers and many of them, including our artwork supplier, were initially chosen when we were at a micro-business level and had existing relationships with our founders. Once we have established a mutually beneficial relationship, we do not seek to change it even if this could potentially exclude a possible local supplier.

We have very specialised requirements for our packers, herb suppliers and testing laboratories due to our organic status, ethical and quality requirements. For example, our organic tea packer is located in Gloucestershire and is the closest supplier available for this service and our organic tea blenders are located in Somerset (whom we use to capacity and are the only UK supplier in the country that we know of who can provide this service) and Germany. This German supplier is a member of the Union for Ethical BioTrade and has committed to ensuring that their sourcing practices promote the conservation of biodiversity, respect traditional knowledge and assure the equitable sharing of benefits all along the supply chain.

We source herbs from vulnerable rural communities in Europe, the Americas, Asia and India and ensure these are ethically sourced through adherence to organic, Fairtrade and FairWild standards for applicable certified products.

We do however believe that we can source more locally and aim to increase the proportion of spend annually. This will be communicated in our annual sustainability report.

Answered at 02:47PM on 20 Sunday Sep 2015

Local sourcing means that a business procures local or regional goods and services, and possibly also processes and sells them in the local or regional market, and thereby creates a sustainable business that benefits both its local suppliers and the company itself. This is a business strategy available to international companies and national chains as well as to local entrepreneurs.

When money is spent on goods and services within a local community, most of it remains in circulation within that community, usually in the form of money spent on other local products, inputs, services and staff wages (this is called the local multiplier effect). Generally, money used on goods and services that are not produced locally or spent in businesses based elsewhere will immediately leave the locality or region. Some campaigners claim national chains, such as supermarkets, siphon as much as 95 per cent of their takings out of the locality in which they are received.

A diverse local economy, providing secure employment and supporting a range of goods and services is almost certain to be more resilient, self-reliant and sustainable. Local sourcing, therefore, can be particularly important in invigorating economically depressed or vulnerable areas such as inner city neighbourhoods or rural communities. Sourcing locally may also help promote social cohesion, improve the quality of life for local people, promote customer loyalty, reduce the cost and environmental impact of transportation, and strengthen a company's relationships within the community - which is likely to be home to the majority of its employees and may also be its primary consumer base.

However, when considering procurement and local sourcing, an evaluation of both benefits and drawbacks will inevitably show that certain things are not available locally, or the quality may be inadequate or the price prohibitive.

To add further complication, sometimes the local choice isn't the best environmental one. For example, the carbon footprint of a product or commodity may be lower when produced elsewhere. Tomatoes grown in the hot sun of southern Europe and air-freighted to market may have a lower carbon footprint than those grown in an artificially heated, poly-tunnel environment in northern Europe.

As such, when considering sourcing goods and services locally, the decision generally comes down to finding a balance between local sourcing and other considerations that are appropriate for the business. Answering this question provides a business the opportunity to explain if and how it has reached such a balance.

Local suppliers

'Local suppliers' are those with operations restricted to a particular geographic area in which the sourcing business also has operations. The definition may includes suppliers operating nationally or multi-nationally if they have practices and policies to source locally, as appropriate to their various locations.

Local

'Local' may be defined by a business. For example, businesses located in rural areas may need to use a wider radius to define 'local' than those based in an urban areas.

Answering YES

All Businesses MUST

Summarise the value chain of the business

Define 'local' relative to their operations, size, sector and value chain

Explain how their activities are focused locally, describing their approach or strategy, and providing examples

Explain any policies or practices which may have negative impacts on the economies local to their operations, and whether they have plans to scale down or mitigate any such activities

All Businesses MAY

State any philosophies or values which influence their approach to the economies local to their operations

Explain whether they have a written policy which describes their approach to the economies local to their operations, and whether it is publicly available

Describe the proportion of spend that is local or the percentage of company turnover that remains within the local community

Explain whether any of their operations are located in economically depressed or vulnerable communities

Describe if and how they influence others to support or strengthen the local economy

Provide any other relevant information

Answering NO

All Businesses MUST

Explain why they do not or cannot answer YES to this question and list the business reasons, any mitigating circumstances or any other reasons that apply

All Businesses MAY

List any practices that are relevant, but not sufficient to answer YES

Mention any future intentions regarding this issue

DON'T KNOW is not a permissible answer to this question

NOT APPLICABLE is not a permissible answer to this question

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