Is Nutella made with nuts picked by children?

Is Nutella made with nuts picked by children? (BBC)

• About three quarters of the world’s supply of hazelnuts comes from Turkey, with Italian manufacturer Ferrero (who own the Nutella brand) being the largest buyer.

• The article explores a number of issues within the Turkish hazelnut industry, focusing predominantly on child labour.

• Ferrero has set itself the goal of making its hazelnuts 100% traceable by 2020, and the author claims that “according to its latest report, to be published shortly, it has achieved only 39% traceability.”

Analysis and Comments

• This does illustrate for us two key points around practical ESG.

• The first is that, even when a company is looking to improve its ESG exposure (in this case supply chain verification), and has detailed plans and processes in place, press coverage of the issues can generate negative publicity. Detail of Ferrero’s latest CSR policies & plans can be found here. The BBC story was very recent and so at this stage it is not clear what damage, if any, this might do to the Nutella & Ferrero brand equity.

• The second is the challenges faced in trying to establish supply chain certainty. The nature of the hazelnut market is that the product goes through various third parties as it goes from farmers to the end product manufacturer. In this situation, where product from various farms is combined, being sure about providence is very difficult. It is around this aspect that technology can be a large part of the solution