Nestlé is considering whether to follow its gourmet brand Nespresso's pledge to source ethically-certified coffee
Nestlé Nespresso, the Swiss food giant’s premium coffee brand, is to boost purchases of sustainable coffee.
Nespresso has pledged to source 80% of beans from farms meeting strict social and environmental standards by 2013.
Farms will be certified by the Rainforest Alliance, an ethical certification scheme that Nespresso has been working with since 2003.
To meet the new target, the company will have to quadruple the number of certified farms in its supply chain from the current 25,000 to 100,000.
The sourcing deal is part of Nespresso’s new sustainability drive, called “Ecolaboration”, launched in Barcelona on June 22.
The $1.8bn brand, which has 157 outlets and also makes coffee machines, has promised to reduce the carbon footprint for every cup of its coffee by 20% over the next four years.
Richard Girardot, CEO of Nestlé Nespresso, told Ethical Corporation: “To deliver quality coffees you need a programme like Ecolaboration.”
“In the long term, if you don’t do this you will face difficulties,” he explains, referring to the public backlash brands could face if they are found to be lagging on sustainability.
Nespresso’s move is yet more evidence of the growth in sustainable coffee as brands respond to consumer demand for ethical products.
It marks another coup for the Rainforest Alliance in its battle with rival certification schemes, such as Fairtrade and Utz Certified, for big brands’ business.
The Kenco Coffee Company, owned by Kraft Foods, Costa Coffee and Lavazza are some of the leading brands already sourcing beans from Rainforest Alliance certified farms.
The rival Fairtrade label is particularly strong in the UK, where Starbucks has pledged to make all of its espresso Fairtrade by the end of 2009.
But Rainforest Alliance continues to grow worldwide. The certification now covers 32,240 farms and benefits 2.6 million farmers around the globe.
“It’s doubling every year”, says Tensie Whelan, Rainforest Alliance’s president.
She says that brands see a 5-10% average increase in sales in the months immediately after switching their coffee to the scheme.
McDonalds, which switched to Rainforest Alliance coffee in 2007, saw a 24% sales jump because of its marketing and serving of a better quality product, says Whelan.
For six years Nespresso has worked with Rainforest Alliance to develop a proprietary standard to assess social and environmental standards on coffee farms, the AAA Sustainable Quality Program.
With its latest announcement, Nespresso commits to bring this effort entirely in line with the Rainforest Alliance standard used by other brands. Whelan says: “The third-party standard was important to get to. It’s really the next step,” referring to the credibility that brands gain by using ethical certification schemes.
Nespresso’s own quality standard did not fully meet the requirements of the Rainforest Alliance scheme. The brand will now have to improve standards of water treatment and increase the amount of shade grown coffee on farms, to protect biodiversity, for example.
Whelan adds that it is encouraging to see a quality coffee brand buy into ethical products. “Most luxury, high-end brands see sustainability as a dirty word,” she observes.
Whelan hopes Nestlé will seek to emulate Nespresso’s success. “Time will tell where they will head on this. Nestlé is looking at Nespresso and how it’s performing. Their commitment is a good signal to Nestlé,” she says.
Nestlé is talking with the Rainforest Alliance about ethical sourcing, but neither party would reveal details of their discussions at this stage.
Nespresso’s Girardot is in constant contact with colleagues in Nestlé. Asked whether his experience will be transferred to other coffee brands in the group, he said: “Nespresso is totally different [to Nestlé]. We have 4,000 people. Two-thirds of those people are in daily contact with consumers.
“We made a different choice six years ago. It’s always a story about human beings and team spirit. We have built something very strong with the Rainforest Alliance.”
A spokesperson for Nestlé explained that the company does buy certified coffee for a handful of brands.
The company has two Fairtrade coffee brands: Partners’ Blend in the UK, whose launch in 2005 drew heavy criticism from activists, and Zoegas in Sweden.
Nestlé supplies some food service customers with certified roast and ground coffee. It supplies retailer Ikea with Utz Certified coffee, for example.
But Nestlé has yet to take this commitment to the mass consumer market like its rival Kraft, whose Kenco brand aims to source all its beans from Rainforest Alliance certified farms by 2010.
For now, it seems that Nestlé, as a group, prefers to experiment with certified coffee on the edges of its supply chain.
But it is conceivable that continued growth at Nespresso, and moves at coffee rivals, could soon persuade Nestlé to reconsider its sustainable sourcing strategy.