TEN YEARS OF THE NESCAFÉ PLAN - Nestlé

TEN YEARS OF THE NESCAFÉ PLAN

RTTEHASYO UABETRYASDTR WTI2

SINCE THE LAUNCH OFTHE NESCAFÉ PLAN iN 2010A lot of love went into the cup ofcoffee in your hands: nurturingthe soil, growing the tree, protectingit from climate change.A lot of energy was poured intothings you can’t taste: nurturing thecommunity, growing women’s roles,protecting children and workers.A lot of people did things youcan’t see: nurturing hope,growing incomes, protectingthe environment.A lot of voices discussed thingsyou haven’t heard yet.So, we asked them why they thinkyour day starts better with a cupof respect.And this is what they said 3

CONTENTS569121416FOREWORDMagdi Batato& David RennieTHE NESCAFÉ STORY:STIRRING SUCCESSTHE NESCAFÉ PLAN:A COMMITMENT TOSUSTAINABLE COFFEERESPECTA DECADEOF PROGRESSTEN YEARS OFTHE NESCAFÉ PLANAROUND THE WORLD213034414652IMPACTA CUP WITHAN EXPERT:Chris WilleTRUSTDISCOVERYSUPPORTA CUP WITHAN EXPERT:Carlos Brando556068747883THE BUSINESSOF FARMINGWOMENIN COFFEEFARMERSOF THE FUTURECOLLABORATIONTEN YEARSOF LEARNING:A PERSONALREFLECTIONMarcelo BurityLOOKING AHEADPhilipp Navratil4

FOREWORDA MILESTONE ON OURJOURNEYEvery year, Nescafé supports around 100,000 coffeefarmers and buys more than 800,000 metric tonsof green coffee – more than 13 million bags, frommore than 20 countries. Today, one out of sevencups of coffee drunk around the world is a Nescafé.A little over ten year ago we launched ourglobal sustainability initiative: the Nescafé Plan.That makes this is an ideal time to pause andreflect on the progress we’ve made, note thechallenges that remain and consider how bestto address them.MAGDI BATATO,Executive Vice President,Head of Operations, NestléDAVID RENNIE,Deputy Executive Vice President,Head of Nestlé Coffee BrandsNescafé had been engaged in sustainability ona local level for a long time. The Nescafé Planbrought these efforts under one umbrella.We sought to create more alignment and efficiencyand to work collectively towards some veryambitious targets. In this regard, we have madesignificant progress to date, including sourcing75% of our coffee responsibly. We have alsoreduced our operations’ carbon emissions by46% and water withdrawal by 53%.These achievements (and many others) would nothave been possible without our outstanding anddedicated teams – both past and present – whohave driven the Nescafé Plan at all levels of theorganization, along with our external partners.Collaboration and internal alignment are criticalto delivering our shared objectives and withoutthis energy, hard work and passion we would notbe where we are now. Together we have expandedour responsible sourcing and field programs withcoffee farmers to levels never seen before.We are proud of what we have achieved andhumbled at the same time by the scale andcomplexity of the issues that the coffee sector isfacing. While we have made a positive differenceto the lives of hundreds of thousands of farmers,their families, communities and landscapes, manymore challenges remain.We rightly celebrate the 10th anniversary ofthe Nescafé Plan with a renewed drive to applyall that we have learnt over the last decade toour activities going forward. It is our hope andintention to continue leading the sustainabilityagenda in coffee for the decade to comeand beyond.5

THE NESCAFÉ STORYSUCCImage courtesy of the Nestlé Historical Archives in Vevey.SSecin8319In 1929, Louis Dapples, the Nestlé Chairman, was presented with aninteresting task by his former employer, the Banque Française et Italiennepour l’Amérique du Sud. The bank owned warehouses full of Brazilian coffeebeans, which were sitting unsold. They wondered if Nestlé could turn thebeans into a “soluble coffee cube” to be sold directly to consumers.It seemed an impossible task at the time, especially in the shadow of the 1929Wall Street Crash and subsequent collapse in global coffee prices. But in1932, when a young food chemist working at Nestlé called Max Morgenthalerwas asked to find a way to create water-soluble coffee, he rose to thechallenge. In fact, when it seemed impossible to retainthe coffee aroma and the project was cancelled, Maxpersevered and continued to experiment on his own.His dedication paid off. In April of 1937, a stunned NestléExecutive Board was invited to a tasting. From the firstmouthful, their response was overwhelmingly positive.The scale-up began immediately and in 1938, Nescaféwas officially born. By 1940, only two years later,Nescafé was already available in 30 countries. These daysit is enjoyed by millions of people around the world.ESGST IINRRInstant History6

THE NESCAFÉ STORY19381953Nescafé became the firstcoffee brand to climb MountEverest as part of EdmundHillary’s expedition.A young food chemistworking at Nestlé called MaxMorgenthaler found a way tocreate water-soluble coffee.Apollo 11Nescafé was launched intospace along with astronautsNeil Armstrong, Buzz Aldrinand Michael Collins to helpkeep them sharp on their1969 moon landing.LaunchNescafé PlanMexico19381960Switzerland operationslaunched19861987FranceR&D CenteropenedAgricultural Services – see page 4819881991MexicoEcuadorThailandAgricultural Experimental AgriculturalServicesfarmServicesR&D Center – see page lturalServicesExperimental farms – see page 431996200520092010201120132014IndiaThailand Côte d’Ivoire Côte d’Ivoire Vietnam/ Côte d'Ivoire NicaraguaBrazilAgricultural Experimental R&D Center AgriculturalExperimental rvicesServicesImages courtesy of the Nestlé Historical Archives in Vevey.20182021GlobalSwitzerlandGrownFirst NescaféRespectfully Plan ReportConsumerCampaign7

THE NESCAFÉ STORY#1Nescafé is the world’spreferred coffee brand180Countries distributeand sell Nescafé1in7Cups of coffee consumedaround the world is Nescafé8

A COMMITMENT TOS U S TA I NABLECOFFEE“You can go back in time, 10-20 years, and therewere two key questions that people asked: wheredoes my coffee come from? And how is it grown?Those are still relevant today.”Orlando Garcia, Latin America Nescafé Plan RegionalManager & founding Nescafé Plan team member9

THE NESCAFÉ PLANBeing the world’s leading coffee brand brings withit a huge responsibility, which Nescafé has alwaysembraced. As early as 1960, we began helpingfarmers to adopt best practices with the creationof our first coffee Agricultural Services team inthe Philippines. This was the humble beginningof our work to improve farmer livelihoods throughimproved farm productivity and efficiency.In 1986, we started pioneering coffee Research &Development work in Tours, France, which focusedon Plant Science to improve the resilience ofcoffee trees. Two years later, we launchedArabica and Robusta breeding programs to createnew and improved varieties on experimentalfarms. Since the beginning, we have workedcollaboratively with other institutions seekingto improve coffee farming.Then, as now, growing consumer demand meantthat more coffee – quality coffee – would beneeded to guarantee future supply. In the early2000s, total global production was in the rangeof 128 million bags. Yet with coffee consumptiongrowing at around 2% a year, the sector wouldneed to produce 155 million bags by 2020 toensure everyone could still enjoy their daily cupof coffee. And this had to be achieved on thesame area of agricultural land and by using moresustainable practices.THE LAUNCH OF THENESCAFÉ PLAN MARKEDTHE BEGINNING OFA STRONGER SUSTAINABILITYSTRATEGY AND SETTHE gROUNDWORK FORGREATER PARTNERSHIPSAND ACCOUNTABILITY.10

THE NESCAFÉ PLANBy 2010, the expansion of our Agricultural Servicesto four other countries had allowed us to impactaround 10,000 coffee growers per year. Prior to 2010we had cumulatively distributed over 16 millioncoffee plantlets to rejuvenate farms, helpinggrowers to increase their yields and revenues.A total of four experimental farms had beenestablished to actively support our plant breedingprograms and research.The Nescafé Plan, in other words, was manydecades in the making. Our formal launch,which took place in Mexico City in 2010, broughtall our commitments on coffee farming, productionand consumption under one umbrella – markingthe beginning of a stronger sustainabilitystrategy and setting the groundwork for strongerpartnerships and greater accountability. We madeseveral commitments, including to significantlyincrease our purchase of responsibly sourcedcoffee, and we implemented activities to enableand achieve those goals.In the ten years since, we have strived tocontinually improve the Nescafé Plan. Apart fromgenerating significant demand for responsiblysourced coffee, our main goals have always beentraining farmers, helping with the renovation ofcoffee farms by distributing plantlets of improvedcoffee varieties, bolstering farmer incomes,promoting water conservation, preventingdeforestation and supporting biodiversity inand around coffee fields. By helping farmers toincrease yield and implement sustainable farmingpractices, we have also helped ensure thatconsumers can still enjoy great quality coffee.Today the scale and reach of our activities,our volume of responsibly sourced coffee andthe number of newly developed coffee varietieshave made the Nescafé Plan one of the largestand most comprehensive coffee sustainabilityprograms in the world. While we have come a longway, we know the work is far from over. But byassessing and adjusting our programs for greaterimpact and by working closely with our partners,we hope to support sector transformation andsustain positive change for decades to come.CHALLENGES OF THE DECADEMajor coffee events and challenges have underlined the importance of sustainable farmingand farmer resilience.2010 – 20122013 – 20142014 – 20152018 – 2020Coffee leaf rust diseaseoutbreak in Colombia(-30% production)Coffee leaf rust diseaseoutbreak in Central America(-16% production anda further 10% in 2014)Brazilian drought(-50% production in worst-hitareas of Espirito Santo)Historically low Arabicacoffee prices due to recordharvests in Brazil and otherproducing countries11

THE NESCAFÉ PLANThe smell of coffee is what many people wake up to inthe morning. It’s the drink that is savored, shared andsipped during special parts of the day by millions of people.R E SP EC TWe have spent more than 80 years striving to make surethat our consumer's cup of coffee is filled with respect.Respect for farmers, by helping them lead prosperous liveswith decent incomes. This means healthier and more diseaseresistant coffee trees, good agricultural practices in the field,better business planning and diversified streams of revenue.Respect for communities, which need to thrive in order forfarms to flourish. We account for all the people behind coffeecherry picking, their families and the towns and villages wherecoffee is pride and heritage. They all benefit from increasedmonitoring of safety and labor practices and from programsthat better equip young people to take over coffee farms.Respect for the environment, which nourishes us every day.The natural resources of trees, water and air are foundationsof life and must be conserved. Better agricultural techniquesand reducing water usage and emissions all lead to ahealthier planet.Respect for our consumers, who deserve to know wheretheir coffee is from and that responsible practices arefollowed all along its production.SUSTAINABiLITY POURS RESPECT FORPEOPLE AND THE PLANET INTO YOURCUP. THAT’S THE QUALITY COFFEETHAT COMES FROM THE NESCAFÉ PLAN.12