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Paulo Saath, global head of leaf operations at JTI, describes the current challenges facing the tobacco supply chain, and how the industry is evolving in its relations with farmers.
The relationship between tobacco manufacturers and farmers has evolved over the years, Saath says. The goal now is to better support growers so that they can increase yields and product quality. In addition, the topic of sustainability has come to the fore. “We’re very cognizant of the importance of the farmer, not only in a business-to-business sense but also human-to-human,” Saath says. “It’s important to keep driving the business, [while] making sure that ESG [environmental, social and governance] is also being driven forward.”
Assistance to farmers involves constant communication and training, including at least six visits per grower per crop cycle. And the effort starts even earlier on the research and development end, with JTI maintaining research centers in South America, Africa and Japan.
JTI’s supply chain is complex, sourcing from up to 40 countries as part of a risk-mitigation strategy. The big challenge to that network continues to be “how we keep the focus to deliver what the consumer wants,” Saath says. At the same time, concerns over climate change and sustainability are driving the company to minimize the environmental impact of its operations.
Technology is playing a major role in achieving those objectives, especially artificial intelligence, machine learning and the ongoing effort to digitize key processes. Data is generated by up to 20 different systems, with the information flowing into a “data lake” that enables JTI to connect all aspects of its business. AI is also aiding in helping farmers to increase crop output, Saath says.
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