JulieCraves

Corporate coffee / Smucker's

Smucker’s sustainability, take 3

JM Smucker’s, owner of Folgers and other grocery and convenience coffee brands, is one of the world’s largest coffee buyers. Yet only a fraction of a percent of that coffee is certified in any way, and the company has a lousy sustainability record.

Since 2010, two large investors have been trying to get Smucker’s to work on substantive and meaningful annual sustainability reporting and address risks associated with climate change, with marginal success. The investors planned on trying again with a shareholder proposal for the 2012 annual meeting. They have withdrawn the proposal based on some positive signs in Smucker’s 2012 corporate responsibility report.

The Smucker’s 2012 CSR report (PDF) does have more meat than the previous effort (PDF).  Among the coffee-related highlights, some of which led to the withdrawal of the proposal, are:

  • A goal for certified coffee purchases to reach 10% of its total retail purchases by 2016. Not surprisingly, they are focusing on UTZ Certified coffees, which don’t have strong ecological criteria; this is the most popular certification for the big commodity coffee buyers. It will greatly improve transparency, however, and UTZ standards have been evolving over time to include more and better-defined environmental criteria. Not sure what specifying “retail” purchases means. Does it not include coffee going toward the wholesale or food service segments?
  • Various partnerships with organizations that offer smallholder support.
    • First, there is their existing relationship with TechnoServe. As I’ve pointed out before, this particular “partnership” is a continuation of a donor/sponsorship started by Folgers’ previous owner, P&G. Both companies offered support at $150,000 (tax-deductible, I assume) annually — less than 0.03% of Smucker’s profit from their U.S. Retail Coffee segment alone. Presumably, their commitment is at or near the same level.
    • A partnership with the Hanns R. Neumann Stiftung Foundation to focus on agronomy training, organizational development, and climate change adaptation strategies in order to improve the farming conditions, yields, and incomes of small-scale coffee farming families. The language in the CSR report (“our work with…”) indicates that this may be a more substantive relationship, but I can’t find any details on the Neumann website.
    • Similar wording introduces their new partnership with World Coffee Research which will focus on developing hybrid varieties using classic breeding techniques. But then the report says Smucker’s is a “platinum sponsor” and I see that they are listed as donor members and not listed as partners on the WCR site.

However, there is this item in a featured box, which I consider a deceptive bit of greenwashing:

“Folgers was the first buyer of coffee from the Rainforest Allaince Certified Fazenda Modena farm in 2011, the inagural year of its certification. This Robusta coffee farm in Espirito Santo, Brazil, designates more than 30 percent of the farm as protected forest and borders a large natural lake.”

Fazenda Modena is the first robusta farm in Brazil to be Rainforest Alliance certified. But the entire production of this farm is 600 metric tons (or 0.24% of Smuckers annual coffee purchases). Further, Brazilian law requires preservation of a minimum of 20% of forested land by rural landowners. The 2012 revision of this law allows landowners to use non-native species — including coffee — to meet their legal requirement. Ergo, trumpeting this move doesn’t impress me.

I don’t have major objections to companies working on sustainability efforts by supporting worthwhile outside organizations, at least to begin with. But really, if you are going to throw money at something, make it an amount that will have impact that matches the magnitude of impact you have from your lack of sustainability efforts, and commensurate with your huge profits.

Smucker’s noises about producing their original sustainability report also resulted in a similar proposal by Trillium and Calvert in 2010 to be withdrawn, but the resulting report was short on substance. We’ll have to see how serious the company is about making real progress.

Coffee news and miscellany / Coffee regions

Sips: Vietnam edition

Some news out of Vietnam.

  • Nearly all the coffee Vietnam grows is robusta. They are planning to expand arabica production to 40,000 ha by 2020.  The country is already expanding robusta production, which covers more than a half million hectares.
  • It seems inevitable this may lead to loss of more forests. Which will exacerbate adaptations to climate change — and Vietnam is on a list vulnerable countries. While the composition of compilations like this vary depending on the criteria, what struck me about this list was that at least half are coffee-producing nations, with three (India, Vietnam, Philippines) being major robusta growers. The latter two are big suppliers to companies like Nestle. Wonder how that will go.
  • Speaking of problems with adaptation, several of Vietnam’s major coffee exporters are heavily in debt due to a lack of adaptation to market conditions.
  • But there is a Vietnamese coffee mogul that is doing well.

Certifications / Rainforest Alliance

Rainforest Alliance now requires scaling up

Over a year ago, I wrote about an upcoming change to the rules for use of the Rainforest Alliance certified seal. Under the previous (2007) Use of Seal Guidelines, any single-ingredient product, such as coffee, could carry the RA seal so long as it contained at least 30% certified content. The percentage had to be indicated adjacent to the seal.

RA encouraged companies to increase the percentage of certified content over time, even going so far as saying that companies had to agree to these increases. However, there was no specific mandate or requirement in the Guidelines. Thus, we had Yuban Coffee, made by Kraft, that has contained 30% certified beans (and 70% mystery-sourced beans) since 2006.

The good news is that in their new Use of Seal Guidelines, there is explicit language regarding “scaling up” of amounts of certified ingredients. Companies using the RA certified seal on single-ingredient products that have less than 90% certified content must agree to increase the percentage a specific amount over a specific time period. There are two options for doing so. In the first, the amount is increased by 15% of total volume a year. So coffee that starts out at 30% certified goes to 45%, 60%, 75%, and 90% over four years. Terrific!

The “bad” news is that the other option is for companies to sign a “SmartSource” scale-up plan that “allows more flexibility … to work within the realities of sourcing.”  The sample plan provided shows scaling up over six years where some years there is no increase, and other years variable amounts.

The lack of a time limit on the SmartSource plan seems like the weak spot in this option. Why not tell companies they can scale up by less than 15% a year some years, but that they have to get to >90% in no more than 6 or 7 years, for instance.

I understand “the realities of sourcing” and also RA’s rationale for working with these large companies. To rehash: a very large roaster sourcing 30% of many tons of coffee has an arguably larger impact than a small company sourcing 100% of two tons, and allowing less-than-total content gets big corporations to the table. Yet many consumers, roasters, and coffee professionals I’ve talked to think that the ”30% rule” (as well as the “10% slippage” issue) tarnishes a great certification, or confuses or misleads consumers. Allowing it in the first place,  and providing wiggle room in the scaling up process could be (is) perceived as too much concession to corporate interests.

I’m willing to bet Kraft is using the SmartSource plan, given the volume they purchase and their long-standing 30% plateau. It will be interesting to see how they progress, although we will have to wait years to see the end result. I wonder what will happen to companies that do not scale up on schedule. I presume those companies that fail under option 1 will merely be put on a SmartSource plan. I can’t imagine RA terminating a relationship or yanking a seal as long as there is an open-ended option in place.

So while I’m not discounting this clear step forward with the 30% rule, I’m not sure it “solves” the go-easy-on-big-coffee perception problem. In any event, Rainforest Alliance deserves a lot of credit for the great progress they’ve made bringing certified coffee (and many other products) into the mainstream, and their successful efforts at educating the public about coffee sustainability.

Retail and specialty roasters

Nicaragua El Jaguar: Allegro’s Special Reserve

I’m so pleased and excited that Allegro Coffee’s latest Special Reserve selection is Nicaragua El Jaguar. This coffee is from the Jinotega farm of my friends Georges, Lili, and Jean-Yves Duriaux. This farm preserves a beautiful high-elevation cloud forest, grows coffee in over a dozen plots interspersed with managed forest, and is Rainforest Alliance certified. El Jaguar is has been designated as an Important Bird Area by BirdLife International, and Georges and Lili conduct active bird research on the property.

My husband and I visited Finca El Jaguar last year, and wrote about the farm, coffee, and conservation efforts here at Coffee & Conservation. I also wrote about our visit, focusing more on the birds and habitat, at my other site Net Results, and about a dragonfly survey we did there on Urban Dragon Hunters. Since we visited, the bird list has grown to 291 species, including many North American breeding migrants.

Each quarter, Allegro Coffee (the wholly-owned coffee subsidiary of Whole Foods Markets) highlights an exceptional, limited-release coffee through their Special Reserve Program, and awards the producer $10,000. Nobody could be more deserving than Georges, Lili, and Jean-Yves. They will use their award to help purchase a new wet mill which will process coffee much more efficiently — a current day’s production in two hours — using less water.  This faster processing also improves coffee quality.

Allegro Coffee is the exclusive buyer of El Jaguar coffee. It’s available at your local Whole Foods Market. Please try this Nicaragua El Jaguar Special Reserve. You’ll be supporting coffee producers who are genuine bird conservationists that truly care about growing coffee in harmony with birds and wildlife, as well a roaster who also strives for sustainability and responsibility in their supply chain and business model.