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The Arnott’s Group: A Leader in Developing a More Sustainable Food System

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According to the UN Intergovernmental Panel on Climate Change’s latest report 1, one-third of the world’s crop fields and livestock rangeland will be unsuitable for food production by 2050 if we do not significantly reduce climate-warming emissions.

This is one of the critical global challenges that we at KKR look to contribute to solving, including through the work of our portfolio companies. As such, we are proud to share that our investment behind The Arnott’s Group and the company’s important efforts on this topic were recently recognized by the Asian Venture Capital Journal (AVCJ) at its 2021 Private Equity & Venture Capital Awards with the “Responsible Investment Award”. Namely, AVCJ recognized The Arnott’s Group’s ambition to “introduce less resource-intensive manufacturing and create a path to net-zero emissions.”

The Arnott’s Group has had a long history of addressing sustainability challenges, including a focus on sustainable sourcing. KKR invested in the iconic Australian biscuit maker in 2019, and have since been working closely with management to support our combined vision for the business. In many ways, our collaboration highlights the type of partnerships KKR seeks with our portfolio companies to not only achieve greater financial success, but also incremental positive impact. We have proactively expanded the business’ sustainability and ESG programs to ensure we are holistically focused on people and planet, not just profit. Even as we continue on this journey, our publicly commitments today include:

  1. Achieving net-zero emissions in operations by 2040 and across the value chain by 2050: we switched to renewable electricity to reduce greenhouse gas emissions, and are actively looking for gas alternatives for our manufacturing facilities. We also have programs in place to recycle organic waste and reduce water usage.
  2. Reducing, reusing or repurposing ANZ plastic packaging by 10% by 2025 and meet Australia’s 2025 National Packaging targets: In 2021, we announced a new sustainable packaging strategy that will see over 98% of packaging and c. 75% of soft plastics used in our products recyclable.
  3. Sustainably growing and sourcing 100% of key ingredients by 2035: we currently sources ingredients (including flour, sugar, oils, dairy and cocoa products) and materials for our Australian manufacturing sites from about 140 direct suppliers and will aim to make these products 100% sustainable.
  4. Increasing choice, opportunity and well-being by supporting communities and providing diverse food options and guidance on nutrition: The Arnott’s Foundation works with local charity organizations on a range of issues, including providing healthy food to the less fortunate and access to healthcare and cancer treatments for children.

The Arnott’s Group recognizes that its mission goes well beyond making the biscuits that Australians have come to love. We are now stewards of one of Australia’s favourite brands, a responsibility we take as seriously as the need to help preserve our planet for future generations. We are very proud to work alongside a management team that is leading the charge on these important issues, and look forward to continued strong partnership and achievements in our sustainability journey.

1. UN Intergovernmental Panel Climate Change, Sixth Assessment Report, https://www.ipcc.ch/report/ar6/wg1/#SPM