National Cooperative Grocers (NCG), of which Oryana is a member, is developing an Inclusive Trade Program designed to identify suppliers that meet the definition for “diverse suppliers” and ultimately increase the representation of these suppliers in purchasing programs and supply chain. To jumpstart these efforts, NCG has worked with UNFI’s (UNFI is our main distributor) supplier diversity team to apply its classification of diverse suppliers.
Background – As a purchasing cooperative NCG has been effective at aggregating demand to create benefits for co-ops, consumer-owners, and shoppers. By adding a focus on supplier diversity to purchasing program they can increase impact: use enterprise as a lever in anti-racist efforts, do more to ensure that they have greater representation within the supply chain, and provide consumers with more diverse options and better information about the people behind the products they purchase. With the influence co-ops have through NCG, they can take a unique leadership role in championing diversity in our industry; intentionally and actively contributing to the equity and justice of our supply chain.
NCG started integrating supplier diversity into its business plan last year. Shortly after initiating this work and following the murder of George Floyd, they saw a marked uptick in the level of interest expressed by co-ops in identifying BIPOC-owned brands (and Black-owned brands in particular). They were disappointed however that the major distributors were not able to assist at that time with reliably and comprehensively identifying diverse ownership among consumer brands.
On the basis of this challenge, they spent the next few months conducting research on supplier diversity initiatives in our industry, drew on that research to establish NCG’s working definition of “diverse supplier,” and started planning to build out a supplier diversity program to serve co-ops.
Supplier diversity at NCG
Supplier diversity is a proactive business strategy that drives inclusion of diverse owned businesses in the procurement of goods and services. Most supplier diversity programs encourage the use within the business of suppliers that are minority-owned*, women-owned, veteran-owned, LGBTQIA+-owned, or owned by persons with disabilities in keeping with the Small Business Administration (SBA) defined small business concerns.
Supplier diversity programs seek to upend the reality for historically under-utilized, diverse-owned suppliers by sourcing products and services from them. This process transforms a company’s supply chain to reflect the demographics of the community it serves and quantifyies the total value of the transactions with diverse suppliers. Most supplier diversity programs span all areas of “spend” for a business, including not just goods purchased for resale but also supplies, services, etc.
*Though the term “minority” is appropriately falling out of use, it is still commonly used among supplier diversity professionals. This is in large part due to the reality that businesses seeking formal recognition as a minority-owned enterprise pursue certification through the National Minority Supplier Development Council (NMSCDC). NCG uses this term only in this context.
While supplier diversity programs are not new and are common practice among large enterprise and in government contracting, research indicates that most companies in the natural products industry are at best in the formative stages of any supplier diversity work.
With no established, standardized, industry-wide definition of “diverse suppliers” or means of identifying which brands/companies have diverse ownership, NCG has adopted the following preliminary definition of supplier diversity:
“A diverse supplier is defined as a business that is at least 51% owned and operated by an individual or group that is part of a systemically underrepresented or underserved group; including businesses that are women-owned, BIPOC-owned, LGBTQIA+-owned, veteran/service-disabled veteran-owned, or owned by persons with disabilities. As with most supplier diversity programs NCG will request that suppliers self-identify as a diverse supplier.”
NCG is committed to Inclusive Trade and believes supply chains should include a seat at the table for systemically underrepresented suppliers. They believe that supplier diversity promotes greater innovation, a healthier competitive environment, and more equitably distributes benefits among all community members. They are committed to doing their part to create a more just society by cultivating partnerships with businesses owned by people who identify as women, Black, Indigenous, People of Color, LGBTQIA+, persons with disabilities, and veterans. They will share more updates with you as this important work progresses.