Innovative standard devised by Det Norske Veritas assigns critical roles to quality and value creation for stakeholders along an entire supply chain

SAO PAOLO--(BUSINESS WIRE)--illycaffè on Friday became the world's first company to receive a Det Norske Veritas (DNV) Responsible Supply Chain Process certification, attesting to the company's long-running sustainable approach to production and its relations with stakeholders throughout the production chain, particularly with green coffee suppliers. The illycaffè model is innovative in assigning critical roles to quality and value creation. The certification was officially conferred at illycaffè's twentieth annual meeting in Brazil, recognizing suppliers for coffee production meeting the company's industry-leading quality standards.

DNV, an international, independent leader in product and process certification, in part modeled its new certification standard on the illycaffè supply chain model, buttressing it with current and emerging stringent guidelines for sustainability and corporate responsibility, and with standards of reference for certification and accreditation activities. The certification incorporates both pan-industry standards and industry specific standards. Officially, illycaffè received the DNV Green Coffee Responsible Supply Chain Process certification.

The standard developed by DNV is innovative because it marks the passage from the certification of an organization's supply chain to the certification of an organization's ability to create value that benefits everyone involved.

"We are proud to have obtained this certification, which recognizes and validates how we have operated over the past 20 years, through protocols and procedures that guarantee the excellence of our final product," said Andrea Illy, President and Managing Director of illycaffè. "illycaffè has always been a stakeholder company, based on ethics and with the objective of improving quality of life. Quality is a key concept in our company philosophy. Our continuous search for quality creates a virtuous cycle that creates value for everyone involved, from coffee growers to coffee drinkers, in growing magnitude over time."

Quality and sustainability are for illycaffè inseparable: a truly excellent product cannot be anything but sustainable in three critical aspects: economic, social and environmental. Economic sustainability is achieved through the creation of value for all those involved, from the grower to the final consumer. Social sustainability rests on the concepts of individual growth and self-realization. Environmental sustainability means respect for the ecosystem, through, for example, the use of recyclable shipping and packaging materials and the application of non-polluting practices.

"This supply chain certification standard is particularly innovative in demonstrating a company's ability to create value over the long term," said Thomas Vogth-Eriksen, Chief Executive Officer DNV Business Assurance. "The schema focuses on the building of shared value in a context where social development stimulates economic development, recognizing that a business grows in large part through its ability to help its partners and suppliers grow."

Over the past two decades illycaffè has perfected a system of direct relationships with its suppliers, based on three main pillars: selecting the best growers in coffee producing countries; transferring to these growers, through the company's Università del Caffè and the daily field work of specialized agronomists, comprehensive knowledge accumulated over 80 years of practical experience and research to produce coffee meeting illy's high quality standards; and purchasing the best production directly from growers, paying them a premium over the going market price to reward quality achieved, and incentivize ongoing improvement.

The DNV Responsible Supply Chain Process standard

The DNV Responsible Supply Chain Process standard certifies a responsible supply process. The model, designed for application to any kind of supply of raw materials, was initially applied to the green coffee supply chain.

The holistic model devised by DNV calls for the analysis of company processes and strategies, and of its relations with stakeholders, to verify the congruence of the organization's stated goals with its strategic decisions and core processes (governance, personnel management, marketing, research and development, production, etc.), as well as the specific management of supply processes along the entire chain. It also verifies a company's commitment to sustainability, evaluating strategies, roles and responsibilities, behavior, involvement of partners and communication of corporate responsibility. Applicant companies must demonstrate awareness and management of all the risks related to its activities, including environmental factors, quality, product health risks and risks to human resources and human rights.

Key factors underpinning the green coffee model include:

• Definition of Key Performance Indicators (KPI), which refer to risks and environmental impact deriving from the production of green coffee. The KPI vary depending on locally and nationally derived factors and guarantee concretely effective interventions.
• Definition of concrete and diffuse interventions with specific objectives. These consist of activities aimed at disseminating best practices among growers and managing risks linked to coffee production (economic, social and environmental).
• Field inspections
• Specifically designed rewards

Using the KPI approach, a company is able to monitor, within a context of continual improvement, its performance with respect to sustainability. The standard also provides a reference for the systematic evaluation of differences among various national contexts related to the supply chain, supporting strategic planning and the definition of intervention priorities as a function of the concrete needs of local stakeholders.

The certification process for illycaffè lasted one year, during which DNV performed its audits and the company made efforts to perfect its internal processes in order to meet the requisites. All of illycaffè's functions were involved in the inspections and the definition of the actions to be taken, from the board of directors to management and operational personnel.

Based in Trieste, Italy, illycaffé produces and markets a unique blend of espresso coffee under a single brand leader in quality. Over 6 million cups of illy espresso coffee are enjoyed every day. illy is sold in over 140 countries around the world and is available in more than 50,000 of the best restaurants and coffee bars. espressamente illy, the chain of franchised Italian-style coffee bars is now present in 30 countries and comprises more than 230 outlets. With the aim of spreading the coffee culture, illy has founded the Università del caffè, the centre of excellence offering theoretical and practical training on every aspect of coffee for coffee growers, coffee shops staff and enthusiasts. On a global level illycaffè employs over 796 people and has a consolidated turnover of €283,4 million. (2009 results).

illy buys green coffee directly from the growers of the highest quality Arabica through partnerships based on the mutual creation of value. The Trieste-based company fosters long-term collaborations with the world's best coffee growers - in Brazil, Central America, India and Africa - providing know-how and technology and offering above-market prices.

DNV Business Assurance Group AS is a world leading certification body. We work with our customers to assure the performance of their products, processes and organisations through certification, assessment and training services. Our services help customers build stakeholder trust and create a platform for sustainable business performance.

We provide a global footprint with 1600 employees working to ensure our customers' continued success locally and in an ever-changing global environment. As part of DNV, an independent foundation established in 1864, we belong to a network of 8600 employees working from 300 offices around the world.

For further information: www.illy.com

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Contacts

North America:
illycaffè North America
Laura Bachrach, 914-253-4439
laura.bachrach@illy.com
Outside North America:
illycaffè Trieste
Anna Adriani/Christine Pascolo
+39 040 3890111
or
Cohn & Wolfe Milano
Alessandra Bettelli/Alberto Bottalico,
+39 02 20239.374/366
alessandra.bettelli@cohnwolfe.com; alberto.bottalico@cohnwolfe.com