All You Need to Know About Supply Chains
There are multiple ways to source certified ingredients for consumer products. In this post, we cover all you need to know about supply chains.
1. Mass Balance
Mass balance (MB) is a sourcing method that allows for certified and non–certified raw materials to become mixed during the shipping–to–manufacturing process of the consumer product. The mass balance system is a way to ensure that a certain amount of Certified Sustainable (CS) raw materials are being used in the market. The mass balance supply chain (MBSC) model is by far the most used model, due to its efficiency.
Because mass balance is an administrative system, the conventional product and the product covered by a mass balance certification are identical and the product specification for the “two” products will contain exactly the same information. The documentation for in–going and outgoing products in a CS company must demonstrate that the purchase of raw materials and the sales of consumer products are constantly balancing. The Supply Chain Certification System (SCCS) does not mention any requirements on mass balance marking on the product specification nor on the label.
The mass balance model allows each participant within the supply chain to demonstrate their commitment to sustainable production, show voluntary support of biodiversity, and to actively promote the trading of CS products. Mass balance is a good way to scale up sustainability, since it is more affordable for companies than setting up a completely segregated supply chain.
2. Segregated
When companies keep the ingredients purchased from a certified farm physically separated from non–certified ingredients throughout the whole supply chain, it is called a “segregated model” (SG) of sourcing.
3. Identity–Preserved
In some cases, the segregated model makes it possible to trace the certified ingredient inside the finished product back to the farm(s) where it was grown. This is called “identity–preserved” (IP). In other cases, ingredients from different certified farms may be mixed somewhere in the process. A segregated sourcing model is commonly used for certified products such as coffee and tea.
4. GreenPalm Credits or “Book & Claim”
The supply chain is not monitored for the presence of sustainable raw materials. Manufacturers and retailers can buy “credits” from CS–certified growers, crushers and independent smallholders.
Origin Matching Mass Balance
Additionally, a more recent program in the cocoa industry, Origin Matching Mass Balance (OMMB), will better support farmers in the countries that sell cocoa for products that carry a certified seal. Origin mass balance means that, even if certified cocoa mixes with non–certified cocoa during the sourcing process, the country of origin remains the same.
So, if a chocolate bar of a certain brand claims to have cocoa from Papua New Guinea, the brand must purchase the volume needed for that product from certified cocoa farms in Papua New Guinea. The aim of origin matching is to support farmers in the region of production.
Starting in July 2021, the Rainforest Alliance will transition to a mass balance system with full origin matching, with the launch of their new Sustainable Agriculture Standard.
How Mass Balance Works
Companies working with the Rainforest Alliance can use mass balance sourcing for cocoa, orange juice, palm oil, and coconut oil. All major international sustainability initiatives use mass balance in one form or another.
Using the Certified Sustainable Seal
In this system, a product—say a chocolate bar, for example—can carry the Rainforest Alliance Certified (or UTZ) seal only if the total quantity of cocoa purchased from Rainforest Alliance Certified (or UTZ certified) farms is equivalent to the total amount used in manufacturing the product.
Put simply, every gram of cocoa in that chocolate bar, is a gram of cocoa that has been purchased from a certified farm.
This Video Explains the Concept of Mass Balance
The Benefits of Adopting a Mass Balance Supply Chain
1. Encourages More Companies to Buy Certified
Mass balance sourcing is a good alternative when a segregated model is not feasible, because certain supply chains are complex. In the cocoa industry, for example, cocoa beans are generally supplied in bulk and mixed during shipping and manufacturing, which makes it impossible to keep certified cocoa separate from non–certified cocoa.
For some products—like cocoa, orange juice, palm oil, and coconut oil—the higher cost of a segregated model, such as separate tanks and silos, would divert funds away from where they matter most: investing in more sustainable farming practices that protect nature and improve the lives of farmers and their families.
2. Benefits More Farmers
As mass balance sourcing makes it more affordable for companies to source certified crops, this, in turn, increases the demand. This means that more farmers can benefit from the social and economic advantages, including higher incomes and better working conditions, associated with certification programs.
While both segregated and mass balance models have their pros and cons, it is important to note that their impact is the same for the growers (farmers). Both methods require companies to purchase the amount of ingredients that are needed for their consumer product from a certified farm.
3. Ensures Authenticity of Certification
Mass balance sourcing is pretty transparent because it includes documentation and traceability systems to ensure that the volumes of certified ingredients bought for products that carry a certified seal were actually grown on certified farms.
Mass Balance Certification
If a company wants to purchase mass balance certified raw materials to use in a product and finally sell the product with a mass balance claim, it must have supply chain system certification. The certification requires an implemented and approved system for administration of the mass balance purchase and sales, which need to be validated by an independent third party. For manufacturers with more than one production site, each individual site will need to be SCCS mass balance certified and audited. Further reading on supply chain certifications in our post, What You Need to Know About Sustainable Palm Oil.
In order to obtain the mass balance certificate, manufacturers must handle relevant documents from their supplier to prove the mass balance purchase. A mass balance supplier will need to show relevant documents, such as: order confirmations, invoices, delivery notes, etc. These documents should include the product’s name, a statement that the product is mass balance, and the CS certification number.
Sources:
What does RSPO Mass Balance mean? – Palsgaard
https://www.palsgaard.com/en/responsibility/responsible-products/rspo-sg-certified-emulsifiers/what-is-the-rspo/what-does-rspo-mass-balance-mean
What is Mass Balance Sourcing? | Rainforest Alliance
https://www.rainforest-alliance.org/business/certification/what-is-mass-balance-sourcing/
MOI Foods – Mass Balanced Sustainability
http://www.moifoods.com/index.php/sustainability/mass-balanced-sustainability
MOI International – Mass Balanced Sustainability
https://www.moiaust.com/index.php/sustainability/mass-balanced-sustainability
What is sustainable palm oil? – BBC News
https://www.bbc.com/news/science-environment-49553703
RSPO Supply Chains | RSPO – Roundtable on Sustainable Palm Oil
https://www.rspo.org/certification/supply-chains
Is Sustainable Palm Oil Really Sustainable?
https://www.sustainablejungle.com/sustainable-living/sustainable-palm-oil-solution/
PALM OIL SUPPLY CHAINS – PALM OIL INVESTIGATIONS
https://www.palmoilinvestigations.org/palm-oil-supply-chains.html