Increase product quality and price premiums
As a globally successful brand and reference for high-quality premium coffee, Nespresso, a globally managed business of Nestlé, needs a guaranteed and continued supply of high-quality coffee beans. Nestlé identified a number of growing trends that reduce the attractiveness of coffee farming among farmers and threaten the potential supply of coffee to the company. These trends included low crop productivity, price volatility, lack of insurance and provisions for retirements, and younger generations moving away to other careers.
In 2003, Nespresso responded by creating a unique supply chain model – the Nespresso AAA Sustainable Quality™ Program – that combines the company’s coffee expertise and strict quality criteria and processes with the non-governmental organization (NGO) Rainforest Alliance’s know-how in sustainable farming practices. Nespresso created the AAA Program to ensure its continued supply of high-quality coffee, while preserving the environment and enhancing farmer welfare. The programme builds long-term, direct relationships with farmers and invests in their capacity to continuously improve on the “triple As” – quality, sustainability and productivity.
Farmers are offered training, financing and technical assistance through a network of over 300 dedicated agronomists. Price premiums, which are 30-40% above coffee market price and 10-15% above market price for similar quality coffees, are also paid. Investments are made in post-harvesting infrastructures. By December 2014, the programme was serving over 63,000 farmers in 11 countries, covering 280,000 hectares of coffee farms.
In addition to increasing the quality of coffee, the programme increases farmers’ incomes, yields and sustainability. Between 2009 and 2011, a survey of Colombian farms demonstrated 22.6% better social conditions, 41% better economic conditions and 52% better environmental conditions than non-AAA farms.
Home page image: REUTERS/Denis Balibouse