Greenyard Fresh is a global market leader in fresh fruit and vegetables that connects growers and Europe’s leading retailers.
They show that workers can choose the best solution
Recently, one of Greenyard’s buyers from Germany sought to achieve future living wage expectations thus resulting in Greenyard’s pilot of the living wage project in a small, remote banana farm in Ecuador. To facilitate the project, Greenyard used the IDH Salary Matrix to help calculate living wage gaps.
Finding the Right Farm to Pilot
The success of the living wage pilot depended on working with a trusted producer farm and one whose owner was committed to the project. Taking into consideration the limited time-frame of the project and limited capacities for small-scale growers, Greenyard found the ideal farm to begin their pilot project.
Practical Implementation of the Salary Matrix
To start the project in 2021, Greenyard measured the living wage gaps using the Salary Matrix. Significant wage gaps were identified: 28 of 52 workers were found to be earning below the Living Wage with an average gap of 34% (156 USD). Further training from IDH found several other issues at hand. It was discovered that the producer’s knowledge of the tool was limited and that training could improve data accuracy. Additional training improved the understanding of the tool, and by the end of the pilot, the Salary Matrix indicated that no workers were earning below the living wage threshold.
Impact on Salary Structure: Producer’s Choice
After measuring the living wage gaps using the Salary Matrix, Greenyard entered the data into the GIZ costing tool to identify a potential new salary structure to pilot and calculate the related costs. Together with the producer, Greenyard reviewed the different scenarios and agreed to to pay all workers an equal bonus, including those earning above living wages. This strategy was chosen, in part because many workers have salaries right below or right above the living wage. By only increasing wages for the ones below, it would distort the existing wage structure. By giving all workers an equivalent bonus, this helps to ensure all employees are supportive of the initiative towards living wage.
Sharing the Burden
After using the Salary Matrix and the GIZ costing tool to determine the cost of the living wage gap to be .74 USD per box of bananas, the value was communicated to European buyers. The reliable calculations enabled buyers to contribute to the amount needed to close the living wage gap, with an understanding of the implications of extra payments. This, in addition to the in-kind support of managing the project by the producer enabled this significant value to reach the production side of the supply chain.
Gift Cards–Going the Extra Mile
Greenyard engaged the local working committee to ensure the additional value reached the workers. How exactly the capital would be distributed was up to the employees who collectively decided to make the ‘gift cards available’ to all workers, regardless of seniority. Open discussions narrowed the options down to either receiving cash or gift cards to a large grocery store in the local area which provides typical goods such as food, diapers and other household needs. Although workers and management agreed that gift cards are a short-term solution, and benefits largely remain with the local supermarket chain, this proved to be the most practical option.
The Future of Living Wages at Greenyard
Workers always recognized that the gift cards helped them meet their essential needs, and they found the program to be truly valuable. However, Greenyard faces an important challenge in handling the administrative work of gift cards and making sure that workers receive their rightful benefits, which might discourage other companies from adopting a similar initiative. Despite these obstacles, Greenyard is unwavering in its commitment to the concept of a Living Wage, which remains a crucial component of its sustainability agenda. However, achieving meaningful improvement in this area necessitates a collaborative commitment from the retail sector to share the responsibility and contribute towards bridging the wage gap. The effort by Greenyard not only alleviated the immediate challenges faced by workers but also laid the foundation for a more equitable and promising future for all the dedicated individuals who contributed to its operations.
Living Wage Action Guide
To explore how you can take action with your supply chain partners to close living wage gaps, please check the Living Wage Action Guide. In this free, online resource you can find more case studies, inspiring examples and practical tips.