Nestlé’s “no more deforestation” claim

In response to a Greenpeace campaign, mega-giant food conglomerate Nestlé has reportedly pledged to rid its products of deforestation. A closer read of Nestlé’s own press releases reveals apparently narrower goals, and there is no mention of eliminating deforestation in its coffee supply chain. In fact, other recent Nestlé coffee initiatives point to increased deforestation.

Nestlé responds to public pressure

Originally, the Greenpeace campaign demanded Nestlé quit sourcing palm oil for its products from companies that engaged in (sometimes illegal) deforestation in Indonesia. Public pressure was so intense that Nestlé not only suspended purchasing palm oil from a supplier with a particularly egregious record, the chairman called for a moratorium on deforestation, a few months later announced a partnership with the non-profit The Forest Trust (TFT), and “committed to ensuring that its products do not have a deforestation footprint.”

Reports of corporate responsibility may be premature

That sounds great, but don’t expect substantive action anytime soon. Nestlé is initially only working toward identifying bad players in its palm oil supply chain. Their goal is to source all their palm oil from “sustainable” sources by 2015. Unhappily, palm oil certification schemes have been marred by fraud allegations; the criteria, even if followed, contain loopholes; and some organizations contend that palm oil monocultures are simply inherently unsustainable.

Nestlé talks a lot about adherence to their Supplier Code. This lightweight document contains a single paragraph on sustainability (“supporting” and “encouraging”, but not requiring, sustainable practices) and one paragraph on the environment (in its entirety: “The Supplier must operate with care for the environment and ensure compliance with all applicable laws and regulations in the country where products or services are manufactured or delivered.”).

By the way, Nestlé declared that the biofuel industry is really responsible for forest destruction. This is a favorite tactic of misbehavers: pointing out that there are worse offenders, as if we must focus attention on causative agents only in rank order. Liver cancer causes fewer deaths than lung cancer, but we look for cures for both simultaneously.

Nestlé’s coffee plans: 220 million trees

Coffee has not been mentioned in any of these discussions. Nestlé buys upwards of 907,000 tons of green coffee annually, fuelling the largest market share of packaged coffee in the world. In August (after all the anti-deforestation hoopla), Nestlé announced it was investing US$487 million in its global coffee supply chain. This follows their big robusta expansion push in Mexico that I wrote about in May.

A centerpiece of the current plan is the global distribution of 220 million high-yield coffee plants over the next 10 years. The plants will be free, and the farmers will not be obligated to sell to Nestlé. In other words, the farmers are taking on all the risk of increasing their commitment to coffee, without any guarantees it will be purchased.

Where and how will all this coffee be grown? High-yield coffee varieties are invariably planted in full sun. The push by multinational corporations for farmers to replace their shade coffee systems with higher-yielding, chemical-dependent hybrids was how this whole sun versus shade coffee dilemma was born! Much of the Nestlé coffee will be robusta, used in instant coffee such as the company’s Nescafé brand. Robusta coffee is also grown in the sun. I don’t see how this will not contribute to deforestation.

Another part of the plan includes increasing the amount of coffee purchased directly from farmers to 180,000 tons over the next five years. Direct buying, rather than purchasing from middlemen, should, theoretically, cut down on instances of the company buying coffee from habitat-destroying and illegal sources. In early 2007, the World Wildlife Fund revealed that Nestlé was among the buyers of robusta coffee illegally grown in a Sumatran national park. Their excuse was that they had no way of knowing where their coffee came from when it went through several buyers.

Nestlé’s direct buying goal, if met, will only cover about 23% of its total purchases. In their publication “Faces of Coffee” (pdf), when their direct purchases were at 14%, Nestlé noted,

“…it is unrealistic to believe that [direct buying] could be applied to a significantly larger portion of a roaster’s purchases…”

Let’s conclude, then, that the majority of Nestlé’s coffee purchases will continue to come from possibly-dubious or at least difficult-to-trace sources.

A small portion of suppliers to meet very minimal standards

Nestlé also aims to bring all of the farms that directly supply the Nescafé factories (not all of their direct-sourced coffee) up to the 4C Association sustainability baseline code by 2015.

This is not a certification; the 4C Code of Conduct outlines baseline requirements for coffee production. Only the most atrocious practices (such as bonded and forced labor) are considered unacceptable. The Code itself is made up of 28 principals, each having three statements categorized like traffic lights (red, yellow, and green) indicating “desired performance.”

The 4C system is considered inclusive.  Thus, coffee may be marketed as 4C compliant even if there are “red” practices (“must be discontinued”) so long as there is an equal number of “green” (“desirable”) practices in the same category (equaling a “yellow” average), at least for some unspecified period of time. So, for instance, a producer can kill endangered species and use the “most hazardous” pesticides so long as soil and water conservation plans are in place.

The 4C code is the lowest rung of the ladder for coffee production. I know we all have to start somewhere, but frankly, I am appalled that any of Nestlé’s coffee suppliers don’t meet these most basic standards of human and environmental decency.

A final aspect of Nestlé’s coffee initiative is to purchase 90,000 tons of Nescafé coffee sourced according to the “Rainforest Alliance and Sustainable Agriculture Network (SAN) principles” by 2020. Remember the math that 90,000 tons of all of their coffee would be about 11% of total purchases. Since this goal only applies to beans for Nescafé, it is an even smaller percentage of the company’s total purchases.

Also, note that this coffee will not be Rainforest Alliance certified, it will only conform to SAN principles. These ten principals simply form the basic framework of the certification criteria. So, for example, the Ecosystem Conservation principal states “Farmers should promote ecosystem conservation and recovery.” Without specific standards and criteria, evaluation of compliance with this or any principal is wide open for interpretation, and therefore lacks real meaning for consumers.

Keep Pushing

Considering the evidence, lauding Nestlé’s conversion to genuinely sustainable practices looks premature.

Certainly, it is a positive move that Nestlé is working with The Forest Trust (TFT), which focuses on products and their responsible supply chains. But it’s not a certification. According to this interview, TFT performs gap analyses on supply chains, identifies where they do not meet sourcing guidelines, and helps create action plans. This sounds like a potentially drawn-out process that allows Nestlé to kick true sustainability down the road.

As for coffee, TFT does not have experience or expertise working with coffee supply chains. Therefore, it’s important that Nestlé is working with Rainforest Alliance. RA’s own press release reiterates that Nescafé will not be using the Rainforest Alliance seal. I think RA is being overly optimistic in saying that this initiative will result in Nestlé “increas[ing] its supply of coffee beans without clearing rainforest.”

That sentence does, however, speak to the true goal: increasing supply. Robusta prices hit amazing highs in 2008 (probably when this plan was hatched) and prices are again climbing. Arabica futures are now at a 13-year high.  Any time coffee prices are high, coffee farmers tend to plant more coffee. In 3 to 5 years when the plants begin to produce, the glut of coffee causes prices to plummet. Nestlé is only adding to this problem by handing out tens of thousands of high-yield coffee plants. Nestlé is looking not for a sustainable coffee supply, but a sustained coffee supply.

The public must keep up the pressure on Nestlé and other similar companies to make meaningful, verifiable, prompt changes in their coffee supply chain to ensure authentic ecological and economic sustainability for all players. Until then, we shouldn’t be drinking a single one of the 4600 cups of Nescafé that the company claims are consumed every second worldwide. I’ve just learned this is International Nestlé-Free Week, so it’s a good time to start.

Posted in Corporate coffee,Nestlé/Nespresso