HelloFresh is the leading supplier of fresh food meal kits to consumers in developed markets around the world. The meal kits use fresh ingredients in pre-measured quantities allowing for calorie control with the intention of supporting healthy eating. Customers are provided with a flexible and convenient route to eating more healthily that also offers up to one third less food waste than more traditional food supply models.
Engagement issue
Animal labour in the supply chain
Engagement objective
Understand the extent to which animal labour is used in the supply chain, and specifically monkeys for the harvesting of coconuts.
Scope and process
We were first alerted to a potential issue with HelloFresh using animal labour in their supply chain by a PETA report into the use of monkey labour for the harvesting of coconuts in Thailand1. Our policy in such instances is to initiate a conversation with the company to clarify the company’s response and assess the extent to which accusations have been verified. We therefore prepared a range of questions, organised into four categories, and sent these over to the Investor Relations team ahead of a call as outlined below.
Outcome
Ongoing. We had a productive call with IR based around these four lines of questioning, as outlined below.
- The scale of the issue: Coconut milk comprises a very small proportion of HelloFresh’s ingredients (< 5% of meals sold in the last 12mths). While HelloFresh had been sourcing from Suree, one of the wholesalers named in the PETA report, their analysis has not yet found any evidence of monkey labour at farms supplying Suree. We are in the process of contacting PETA to further discuss their evidence.
- Timeline and sourcing: The company had already begun shifting their procurement away from Thailand before it was targeted by PETA as it had seen the NGO’s initial campaign targeting US supermarkets. Instead, it began sourcing from Sri Lanka based on initial research suggesting that the use of dwarf palm trees there enables an easier coconut harvest. Sourcing from Thailand had stopped altogether by the start of 2023 and the company’s focus is now on building robust supply chains to source from Sri Lanka entirely.
- Auditing: HelloFresh requires that suppliers meet Global G.A.P or GFSI certification. Audits are conducted by its Food Safety and Quality Assurance (FSQA) team, including unannounced site visits for items deemed as high risk. Following the PETA report, the company contacted Suree to secure affidavits confirming monkey labour was not used and audits were regularly conducted. We expressed our concerns about the effectiveness of these measures, which the company ultimately agreed with and stated it was unlikely to resume sourcing from Thailand. It also said it is enhancing its Ethical Trading Policy to cover animal welfare issues more explicitly, and we have requested a copy of this policy as soon as it is available. HelloFresh is also exploring whether to establish an NGO working group, the purpose of which would be to help identify controversial issues earlier on.
- Next Steps: We aim to follow up in Q1 2023 to monitor progress made and as we hope to better understand how audit checks are completed. Independently of this, we also aim to discuss evidence with PETA and research claims that the use of monkeys for coconut harvesting is a traditional/historic practice.
We believe that HelloFresh was establishing proportional measures to prepare for the risk as soon as it became aware of it. We will continue to monitor the company’s progress and hope to gain a still more rounded picture of the situation in the coming months.