McDonald’s makes substantial commitment to coffee sustainability
McDonald’s Corp. recently announced that their North American operations is investing $6.5 million over 4.5 years to provide technical assistance to Guatemalan coffee farmers to increase their capacity for sustainable coffee production. McDonald’s is partnering with the non-profit TechnoServe (which coordinates many coffee-related projects) and SCAN (Sustainable Commodity Assistance Network), a global consortium of 20 organizations that provide an array of support for sustainable agriculture practices. This is another component in the sustainability efforts of the Golden Arches, a number of which are directly related to coffee. These include:
- All coffee in the U.K. is from Rainforest Alliance-certified farms (since 2007).
- All coffee in the rest of their 39 European markets is from Rainforest Alliance-certified or UTZ Certified farms (since 2007).
- All coffee in Australia and New Zealand is from Rainforest Alliance-certified farms (since 2008-2009).
- All coffee for espresso-based drinks in the U.S. is sourced from Rainforest Alliance-certified farms (as of March 2013).
- All coffee for espresso-based drinks in Canada must be certified by a third party, and is currently 100% Rainforest Alliance.
To get an idea of why I find this so significant, we need put all of this in perspective by comparing it to the largest coffee buyer in the U.S., J.M. Smucker Company.
McDonald’s is a fast food restaurant. They do not directly source or roast coffee (it comes through suppliers). Coffee is not their core business, but makes up just 6% of U.S. sales for the company1. Smucker’s is a food manufacturer that owns the coffee brands Folgers, Millstone, Dunkin Donuts bagged coffee, Café Pilon, and Café Bustelo. Coffee makes up 44% of their U.S. sales.
McDonald’s certified coffee purchases in 2011 — Rainforest Alliance, UTZ, and Fair Trade — were about 10,400 metric tons, with three-quarters of it being Rainforest Alliance-certified. Although the McDonald’s restaurants in the U.S. lag behind European markets in offering certified coffee, the company expects to buy around 3800 tons for the domestic market. Not a lot, but more than Smuckers (1500 tons) and Nestlé (2000 tons) total certified global purchases combined!
The most recent McDonald’s pledge amounts to $1.4 million a year to provide sustainability support to coffee farmers. That’s 0.06% of its annual coffee sales of about $2.1 billion on U.S. systemwide sales of just over $35 billion. That doesn’t sound like much until you realize that Smucker has opted to support TechnoServe at $150,000 annually2, or 0.006% of its annual U.S. retail coffee sales of $2.3 billion. And, as I like to remind everyone, JM Smucker has a dismal environmental sustainability record, and less than 0.5% of the coffee it buys each year carries any type of certification whatsoever.
You can let McDonald’s know (on Facebook, for example) that you appreciate their efforts and would like to see more eco-certified coffee in the U.S.
1Figures provided to me by McDonald’s and are the most recent available; total global coffee purchase information not available at this time. The Nestle and Smucker figures are based on the most recently available data — both of those companies are very guarded about releasing any information to the public. In contrast, McDonald’s was helpful and forthcoming about giving me this data, and also has extensive information at their web site.
2This figure is based on statements made by Smucker’s regarding a continuation of support provided to TechnoServe by Proctor & Gamble, which sold its coffee brands to Smucker. The last time donors were listed in TechnoServe’s annual reports was 2009, and Smucker was listed as a donor in the $100,000 to $499,999 level. I wrote to TechnoServe to verify the amount of support they received from Smucker, but did not receive a reply. I’m sure if Smucker had upped the ante, they’d brag about it, because their 2013 Corporate Responsibility Report touted this relationship…by highlighting the work TechnoServe had done with 170,000 coffee farmers, making it sound as if Smucker should receive lots of credit. TechnoServe receives $3.1 million in corporate and foundation support alone.
The Rainforest Alliance Cupping for Quality award is designed to recognize exceptional coffees carrying the Rainforest Alliance seal and to highlight the linkage between sustainable farm management practices and cup quality. Two annual cuppings and awards are divided by geography. In December, coffees from the southern hemisphere — including Brazil, Peru, Kenya, Tanzania and Indonesia — compete.
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.