Sustainable coffee initiatives
We take part in a number of sustainable coffee initiatives. These include:
- The Coffee Working Group of the Sustainable Agriculture Initiative of the Food Industry (SAI platform).
- The 4C Association, of which we are a founding member. We follow the 4C voluntary code of conduct to improve efficiency, profitability, transparency and sustainability in the production, processing and trading of coffee through training and verification.
- In 2010, together with local and international companies, we helped to form the Coffee Task Force in Vietnam. This is part of a major public-private partnership under the World Economic Forum, working on sustainable agricultural growth in Vietnam. Special attention is being given to improve productivity and quality, environmental sustainability and the expansion of opportunities within the communities of Vietnamese coffee farmers, the majority of which are smallholder farmers.
- We are engaging in the IDH Sustainable Coffee programme, a public-private partnership from The Netherlands. This programme aims to address global and national common issues in a pre-competitive manner enabling an increase in sustainable coffee production therefore making coffee farmers more resilient in an ever-changing market.
- We have an innovative partnership with Federación Nacional de Cafeteros in Colombia. The benefits generated by being 4C compliant directly flow through to the farmers, and help provide services such as a programme to rejuvenate farms through the provision of coffee plantlets. These types of initiatives are being replicated with trade partners in a wider range of areas that now include Papua New Guinea, Brazil, and Vietnam.
- In Brazil we offer training through SENAR, the National Service for Rural Apprenticeship, which covers areas such as pest management, pesticide use, water/waste treatment, farm management, supply of septic tanks, and leaf and soil analysis.
- In Papua New Guinea, we offer two university scholarships. This is generated by the added value received from 4C compliance and the supply of green coffee to Nestlé Australia.
- In Vietnam, we supplied personal protective equipment to 250 farmers involved in supplying 4C-compliant green coffee through one of our trade partners. This was financed from the money generated from 4C compliance.
- In Kenya we are focusing on maintaining and improving quality, improving yields, and developing tools to help with adjustment to changing climate conditions, soil and leaf analysis, waste water management, women and youth empowerment, improvements on traceability and preparation for 4C and SAN compliance.
- In Ethiopia, we are looking to address issues at the mill level, such as use of wastewater, more efficient management and training on good agricultural practices, and improving yield and quality. This is done thorough training programmes run by our implementing partner. We’re participating with other industry and trade associations through the IDH sustainable coffee programme to address the traceability of the coffee, as well as engaging with key national and local Government entities.
Nespresso AAA Sustainable Quality™ Program
The Nespresso AAA Sustainable Quality™ Program was launched in 2003, in collaboration with Rainforest Alliance. It is founded on the conviction that the best way to protect in the long-term the highest quality coffees that meet the specific Nespresso aroma profile required for its Grands Crus is to encourage sustainable farming practices and secure farmers’ livelihoods.
The AAA Program attracts major partners who recognise this approach as an innovative and effective way to create shared value for all stakeholders, and has resulted in high loyalty rates from producers.
Through the AAA Program, Nespresso has invested in specific initiatives that help:
- Process consistently high quality coffees
- Produce sustainable coffee, and
- Improve farmers’ livelihoods and optimising farm productivity.
Nespresso’s objective is to source 80% of its coffee from its AAA Program by the end of 2013. By the end of 2012, Nespresso was on track with 68% (2011: 60%) of its coffee coming from the AAA Program.
In 2012, Nespresso extended the reach of its AAA Sustainable Quality™ Program in the coffee countries of origin to support an increasing number of coffee growers in adopting sustainable quality farming practices and improving productivity and net income. The company invested more than USD 23 million during the year to finance field infrastructure, projects and technical assistance, as well as to provide incentive premiums for farmers to adopt the AAA Program sustainable practices.
Nespresso sourced more than two-thirds of its green coffee through the AAA Program, establishing long-term relationships with more than 52,000 farmers in eight countries of origin. A network of more than 200 dedicated agronomists worked closely with farmers on the ground. As a result, more than 240,000 hectares of farmland were part of an active sustainable management programme at the end of 2012.
Nespresso committed to driving sustainability and value creation through a contribution of USD 10 million per year over five years to further strengthen the AAA Program in Colombia, one of the most important coffee sourcing countries for Nespresso, complementing its investment in the AAA Program in other countries. This commitment will provide direct incentive premiums for farmers to adopt the AAA Program’s sustainable practices. It will also finance technical assistance and training to improve quality, sustainability and productivity.
Nespresso currently works with approximately 44 000 AAA coffee farmers in Colombia, representing 80% of all farmers taking part in the AAA Program worldwide. In six years, Nespresso has tripled the amount of coffee sourced through the AAA Program in this country.
The two main priorities of the AAA Program in Colombia are to combine the efforts of the government and local partners to regain the decline in productivity of recent years and to address residual water management, one of the main issues of the coffee industry in the region.
Nespresso has been working closely with the Federación Nacional de Cafeteros de Colombia (Colombian Coffee Federation) and other partners to create innovative and efficient solutions to address water conservation issues. The first of these has led to the installation of around 12 000 water treatment units (since 2008). The second initiative has been the co-financing and implementation of a central mill in Jardín Antioquia. The centralization of coffee and residual water processing in this new mill has enabled to reduce water consumption by 63% and treat 100% of the waste water.
This centralized infrastructure has also enabled farmers to double the volume of coffee matching the Nespresso quality and sustainable criteria, helping them secure higher prices and increase their net income by 17%. The central mill has also had positive social impact: farmers now save approximately four hours or more per day during the harvest and avoid labour-intensive tasks. This extra time is being used to either make improvements within their farms or to spend time with their families.
The central mill was inaugurated in 2010. In 2012, it was expanded to triple its processing capacity of parchment coffee per year and accommodate more than 200 beneficiaries.
Nespresso has also been closely working with local partners to address the productivity challenge. The company started an integrated crop management pilot to increase the productivity levels of the farms taking part in its AAA Sustainable Quality™ Program in the Caldas region in 2010. Over a two-year period, the AAA farmers have increased their productivity between 6% and 30% compared to previous years, thus also increasing their income.
Partnering with supplier Expocafe and the Colombian Coffee Federation, Nespresso drove the “Arbol de Vida” project to support farmers taking part in the Nespresso AAA Sustainable Quality™ Program in growing 200 hectares of additional coffee trees on non-used farm land in the Caldas and Antioquia regions in Colombia. The aim was to increase the productivity of farms and farmers’ net income. Farmers received support from Nespresso and its partners to ensure the project’s success. The project, which started in 2011, resulted in the plantation of more than one million trees, and is ongoing.
In 2012, the Huehuetenango cluster completed the third year of a partnership with Root Capital to provide financial and business literacy training to farmers' associations in Guatemala. More than 500 farmers received support, advice and training to improve the management of their finances. Root Capital is a non-profit social investment fund that is pioneering finance for grass-roots businesses in rural areas of developing countries. There is evidence that this approach is also leading to stronger relations with the producers. Additionally, since 2011, the Fraijanes cluster (composed of five cooperatives and around 200 farmers) has been fully compliant with Rainforest Alliance standards.
Monitoring progress of the Nespresso AAA Sustainable Quality™ Program through a Sustainability Index
Nespresso works with the independent monitoring organisation CRECE, the non-profit organisation Technoserve, INCAE Business School, the Colombian Coffee Federation and its own AAA Program database to measure and track the shared value creation of its AAA Program. CRECE conducted a survey among more than 1,000 AAA farmers to measure the impacts of the Nespresso AAA Sustainable Quality™ Program. Principal Component Analysis was used to build indexes for social, environmental and economic performance.
The social index includes indicators that reflect good working practices, quality of life and occupational safety and health. The environmental index includes good agricultural practices, soil and water conservation measures and adequate agrochemical handling. The economic index includes variables that are associated with market knowledge, land productivity, production costs and income and coffee farmer's economic perceptions.
In Colombia, CRECE applied its sustainability index monitoring to measure the performance of farms participating in the AAA Program versus a control sample of non-AAA farms. The study demonstrated that the AAA farms (including those that are already Rainforest Alliance certified) had 22.6% better social conditions, 52% better environmental conditions and 41% better economic conditions than non-AAA farms. It also revealed that AAA farmers had high levels of loyalty to Nespresso and considered the AAA Program as highly beneficial for them and the region. Additionally, thanks to the AAA Program’s sustainable practices implemented on their farms, participating farmers reported an increased volume of coffee sold to Nespresso since they joined the program.