Regenerating coffee: Nestlé spearheads billion dollar agriculture project for Nescafé supply chain

04 Oct 2022 --- With regenerative agriculture gaining speed across the food sector, Nescafé, Nestlé’s largest coffee brand, is ramping up efforts to support farmers along its supply chain transition to this practice. As part of its Nescafé Plan 2030, the FMCG giant is extending training, technical assistance and high-yielding coffee plantlets to farmers. 

The brand is investing over one billion Swiss francs (US$1.01 billion) by 2030 in the Nescafé Plan 2030, which also comprises moves to mitigate greenhouse gas emissions.

“Climate change is putting coffee-growing areas under pressure,” says David Rennie, head of Nestlé Coffee Brands.

“Building on ten years’ experience of the Nescafé Plan, we’re accelerating our work to help tackle climate change and address social and economic challenges in the Nescafé value chains.”

Rising temperatures will reduce the area suitable for growing coffee by up to 50% by 2050, flags Nestlé.

Nescafé will be working with coffee farmers to test, learn and assess the effectiveness of its multiple regenerative agriculture practices. This will be done with a focus on seven key origins, from where the brand sources 90% of its coffee: Brazil, Vietnam, Mexico, Colombia, Côte d’Ivoire, Indonesia and Honduras.

Coffee in crisis
The coffee sector is in crisis mode as inventories in South America have been declining so badly that reserves are forecast to be dangerously low. Global coffee prices are increasing and will continue to do so amid market uncertainty driven by supply shortages in Brazil.

With a warning that timely action is critical, Nestlé flags that rising temperatures will reduce the area suitable for growing coffee by up to 50% by 2050. At the same time, around 125 million people depend on coffee for their livelihoods and an estimated 80% of coffee-farming families live at or below the poverty line.

Regenerative agriculture is an approach to farming that aims to improve soil health and fertility – as well as protect water resources and biodiversity. Healthier soils are more resilient to the impacts of climate change and can increase yields, helping improve farmers’ livelihoods.

“Climate change is putting coffee-growing areas under pressure,” says David Rennie, head of Nestlé Coffee Brands. “Building on ten years’ experience of the Nescafé Plan, we’re accelerating our work to help tackle climate change and address social and economic challenges in the Nescafé value chains.”

Transitioning to regenerative
Some examples of Nestlé’s regenerative agriculture practices include planting cover crops to help protect the soil. This also helps add biomass to the soil, which can increase soil organic matter and thus soil carbon sequestration.

The brand is investing over one billion Swiss francs (US$1.01 billion) by 2030 in the Nescafé Plan 2030.Backed by agroforestry and intercropping systems, the project also incorporates organic fertilizers to help boost soil fertility, which is essential for good soil health.

Another practice is pruning existing coffee trees or replacing them with disease- and climate change- resistant varieties, which will help rejuvenate coffee plots and increase yields for farmers.

Nescafé broader targets include achieving 100% responsibly sourced coffee by 2025 and 20% of coffee sourced from regenerative agricultural methods by 2025 and 50% by 2030.

Financial support for farmers
In Mexico, Côte d’Ivoire and Indonesia, Nescafé will pilot a financial support scheme to help farmers accelerate the transition to regenerative agriculture. Through this scheme, Nescafé, together with coffee farmers, will test and learn the best approach in each country.

These could include measures such as conditional cash incentives for adopting regenerative agriculture practices, income protection using weather insurance and greater access to credit lines for farmers.

Nescafé will be tracking the progress and assessing the results of its field programs with coffee farmers through its Monitoring and Evaluation partnership with the Rainforest Alliance. Its efforts will be complemented by new partnerships, such as the one with Sustainable Food Lab for topics related to coffee farmers’ income assessment, strategy and progress tracking.

Greening up the supply chain
Since 2010, Nescafé reports traction on its Nescafé Plan, highlighting that 82% of its coffee was responsibly sourced in 2021.

It highlights that 250 million new coffee plantlets have been distributed to farmers since 2010, while ramping up its monitoring impact assessment in partnership with the Rainforest Alliance across 14 countries.

Among other developments, the company has hit a 46% reduction in greenhouse gas emissions in its soluble coffee factories (2020 vs. 2010, per metric ton of product). It also reports 53% less water withdrawal in its soluble coffee factories (2020 vs 2010, per metric ton of product).

Stepping up action on the environment is timely for Nestlé, as the company was recently among nine significant food giants on notice for failing to produce “Duty of Vigilance” plans for managing the impact of plastic waste caused by their products. 

By Benjamin Ferrer