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Nespresso’s coffee sourcing makes up the first significant non-oil export from South Sudan, but a lack of transparency creates challenges
Luxury coffee brand Nespresso has big sustainability challenges, which no amount of smooth talking from George Clooney can charm away. Its single-use pods have come under fire from environmentalists, and were last year banned by the city of Hamburg. Although the pods use an energy-intensive and polluting resource, aluminium, they are not easily recycled, so much of the aluminium ends up in landfill.
Although the company runs its own take-back scheme in most of its markets to recycle pods, it refuses to reveal actual recycling rates, a lack of transparency that casts a shadow over its Positive Cup sustainability plan, a 38-point list of commitments to create value for its suppliers, consumers and society, as well as for its shareholders.
Nespresso’s most compelling sustainability story is in its coffee sourcing, an example of a luxury premium being used to deliver a better product to consumers and a better deal for farmers. This is particularly evident in war-torn Sudan, where Nespresso looked when it wanted to launch a new coffee. South Sudan only gained its independence from Sudan in 2011 and it has been locked in conflict ever since. “The country is reeling from civil war. There was no infrastructure, no logistics, no roads, no hotels, nothing,” says Alexis Rodriguez, green coffee manager at Nespresso.
Despite this, Nespresso saw some promise in working with local farmers in the Yei region of South Sudan to revive the coffee industry in the country, which, along with Ethiopia is one of the cradles of the coffee plant. In 2015, the company launched a limited edition Grand Cru coffee, Suluja ti South Sudan (which means “Beginning of South Sudan” in the local Kakwa language). The coffee, which is produced under the auspices of Nespresso’s AAA Sustainable Quality Programme, is now available in six countries – Switzerland, Netherlands, Germany, US, France and the UK – and is the first significant non-oil export from South Sudan. Oil currently makes up 99% of exports.
Since the country’s independence, the company has been working with Technoserve, an NGO that trains farmers how to produce coffee and helps them to build production infrastructure to enable them to get it to market. Helped by more than $3m in funding from the US Agency for International Development (USAID), they have worked with more than 700 farmers to establish the country’s first five coffee co-operatives and have set up six wet mills in the Yei region.
“Selling into the local market will not be profitable because no one has any money, so we have to help them get the coffee to Europe,” says Paul Stewart, global coffee director at Technoserve. “We get the farmers to organise themselves into co-operatives, train them how to process the coffee using modern technology and they sell the coffee to Nespresso at a 50% premium to the price they would earn in the local market.”
Coffee is a great crop from a development point of view, he explains, because it has a premium segment that has grown at an extraordinary rate in the last decade. “That creates a huge opportunity for smallholders all across East Africa, an opportunity that other sectors don’t have because they are commodity crops. And the exports are a unique opportunity for South Sudan,” he adds.
As in other parts of the world where Nespresso sources coffee, the money the farmers earn enables them to send their children to school, to start small businesses such as making bricks and to buy motorbikes that make it easier for them to deliver their coffee. Stewart says the programme has also brought more women into the farming process. “We really did a lot of work with the farming community to persuade them of the benefits of having both heads of the household learning about the tasks involved in quality coffee production. It makes it easier for them to plan for the future.”
However, the perils of working in the country have been starkly illustrated in recent months as the conflict spread to the formerly peaceful Yei region. Technoserve has had to suspend its workshops, although it continues to reach the farmers through weekly agronomy training broadcasts over the radio. “We’re hopeful that peace will return soon and the workshops can resume,” Stewart continues.
Nespresso CEO, Jean-Marc Duvoisin, adds: “We believe in the potential for coffee to create a positive impact for farmers in South Sudan and to diversify the economic base of the country. We remain strongly committed to helping coffee farmers revive their industry. Our aim is to create a lasting legacy that will contribute to peace and prosperity.”
This article is part of our luxury goods briefing. See also:coffee South Sudan supply chains Nespresso