Corporate coffee

Corporate coffee / Nestlé/Nespresso

Greenwash alert: Nespresso and sustainability

Several months ago, Nespresso, a division of the giant Swiss multinational food corporation Nestlé, announced a major sustainability initiative they are calling Ecolaboration. Nespresso manufactures espresso machines that use proprietary single-use aluminum coffee capsules.

Ecolaboration has three main goals they aim to achieve by 2013:

  1. To reduce its carbon footprint by 20% per cup, primarily by developing “greener” espresso machines.
  2. To increase its capacity to recycle its aluminum capsules to 75% (this does not mean 75% will be recycled, see note 1 below and this post) and to “co-convene an industry roundtable on improving the sustainability performance of the aluminum.”
  3. Source 80% of its coffee from Rainforest Alliance (RA) certified farms (previously, RA was only helping assess farms in their compliance with Nespresso-specific standards, not certifying them; see note 2).

I’m only going to address the coffee sourcing aspect, as sustainably-grown coffee is the focus of this blog.

First, I read Nespresso’s fact sheet on “protecting coffee ecosystems.” A third of the document explains the importance of shade and biodiversity, while the rest neglects to specify any criteria or concrete measures proposed by the company protect the environment.

Thus, the Rainforest Alliance certification criteria will have to act as surrogate for Nespresso’s sustainability efforts. That’s fine, but exactly how much coffee does that “80% certified” represent? Specifically, and importantly, how much as a percent of coffee purchased by parent Nestlé, a company famous for its dismal corporate responsibility ratings [3]?

(Updated August 2010 to reflect actual published figures) In 2008, Nestlé purchased 780,000 tons of green coffee, similar to previous years and typical of their annual volume [4]. In 2010, Nespresso purchased 490,000 bags (60 kg each) or 29,400 tons under their “AAA Sustainable Quality Program” which includes, but is not exclusively, Rainforest Alliance certified farms [5]. This represents 60% of Nespresso’s purchases, but just under 3.8% of Nestlé’s total purchases. Their stated goal is now to source 80% of Nespresso coffee from the AAA program by 2013 (again, not exclusively Rainforest Alliance certified), which would be 5% of Nestlé’s total purchases.

The commitment to sustainably-grown, eco-friendly coffee by Nespresso is an extremely small percentage of Nestlé’s total purchases. This situation qualifies for what I consider to be the most offensive of the four greenwashing criteria set forth by Greenpeace: Dirty Business. This criteria states “Touting an environmental program or product, while the corporation’s product or core business is inherently polluting or unsustainable.”

I don’t even have to dig any farther into the elaborate hoopla on the Ecolaboration site (which frankly sounds like a rip-off of General Electric’s Ecomagination program). I cannot support such a meager effort, in particular from a company with such a long track record of disregard for labor and human rights, environmental protection, honesty in labeling and marketing, and other unethical business practices.

Notes:

[1] Nespresso offers recycling of the aluminum (home and office type only) capsules in several European countries. Even when Nespresso has expanded recycling efforts, it fails to create any meaningful increase in recycling rates. Due to technical constraints, the capsules themselves are not made from 100% recycled aluminum. This post explains that the whole pod recycling issue is greenwashing.

[2] Nespresso first partnered with Rainforest Alliance (RA) in 2003, and signed a five-year pact in 2006. In the first phase of this partnership (known as the Nespresso AAA Sustainable Quality Coffee Program), RA developed guidelines specifically for Nespresso to improve quality and sustainablity practices on farms supplying Nespresso. These farms were not being certified by RA under their usual criteria. RA appraised the farms to see if they were “implementing better methods and are decreasing their impact on the natural world.” Nespresso must have been happy with the partnership, as they routinely donate tens of thousands of dollars to RA (see annual reports). Under the Ecolaboration project, the goal is for 80% of the coffee to actually come from certified farms meeting RA’s standards. Update 2015: here is a post on the environmental and social requirements for producers in the AAA program. Note the low bar for entrance into the program.

[3] Corporate Watch lists numerous corporate crimes; another laundry list is at Global Investment Watch; Responsible Shopper outlines some boycotts and alerts; Source Watch lists more problems; and Ethical Corporation provides an article skeptical of Nestlé’s CSR report. Add it all up, and you get an award for least responsible company in 2005 (nomination here).

[4] Coffee Barometer 2009, linked to and summarized here; Ethical Sourcing – Creating Shared Value, 2008, Nestlé (PDF).

[5] Nestlé’s Nespresso Ecolaboration Progress Report, June 2011 (PDF).

Photo by svet under a Creative Commons license.

Corporate coffee / Dunkin Donuts

No proof of shade coffee at Dunkin Donuts

Recently, Dunkin Donuts Tweeted that the majority of their coffee is shade grown. I’ve been unable to verify this. Dunkin Donuts does not claim to serve or sell shade or sustainably-grown coffee anywhere on their web site. Nor is there any mention of organic coffee.

The only sort of ethical sourcing claimed by Dunkin Donuts is that all espresso-based drinks at Dunkin Donuts stores are made from Fair Trade certified beans. These beverages make up less than 10% (around 5% in 2006) of total global sales. While there is a notion that Fair Trade coffee is often also shade grown, Fair Trade standards have no shade criteria, and their environmental criteria are generic and unquantifiable (see my entire post on this topic). Although much of Fair Trade coffee is also certified organic, that which is purchased by Dunkin Donuts is not (when I searched for the word “organic” on the Dunkin Donuts web site, I got no results at all).

It’s not certified shade or eco-friendly
A spokesperson at the Smithsonian Migratory Bird Center, which certifies Bird-Friendly coffee, told me that Dunkin Donuts approached them a number of years ago but opted not to offer Bird-Friendly certified coffee. Smithsonian reiterated that Dunkin Donuts does not have a contract with them. Rainforest Alliance, excellent at promoting their corporate partners, has no mention of Dunkin Donuts on their web site. The Dunkin packaging does not display the Rainforest Alliance seal that would indicate it contains RA-certified coffee.

Because there is no legal definition of the term “shade grown” coffee, many importers, roasters, and retailers market uncertified coffee as shade-grown to appeal to the eco-conscious consumer, although the consumer has no way of knowing if the claim is true.

Who supplies/roasts Dunkin Donuts coffee?
Brewed coffee in stores and foodservice outlets: Sara Lee. Since 1975, Dunkin Donuts has worked with Sara Lee to supply their franchisees with coffee. According to Sara Lee’s 2005 annual report, they still roasted “much of” Dunkin Donuts coffee. In 2007, Sara Lee partnered with Dunkin Donuts, in a multi-year deal, to be the exclusive provider of Dunkin’ Donuts coffee to foodservice outlets across the country.

Retail coffee: Procter & Gamble/JM Smucker. In 2007, Dunkin Donuts entered into an agreement with Procter & Gamble to roast and distribute Dunkin Donuts coffee in retail outlets. The following year, P&G split off its coffee business, which was taken over by the JM Smucker Company. This included the Dunkin Donuts deal, as well as the Folgers and Millstone coffee brands. To the best of my knowledge, Smucker’s continues to use P&G’s supply chain.

In a comparison of the coffee industry’s largest companies, these roasters received failing grades from Responsible Shopper; you can view their corporate profiles for yourself (Sara Lee, P&G). In 2003, Oxfam America evaluated coffee’s “big four” regarding their efforts to assist struggling coffee farmers; Sara Lee “performed abysmally” while P&G scored 49 out of 100 points. Sara Lee also scored lowest among all food product companies, 13 out of 100, on ClimateCounts.org’s Climate Scorecard.

Where Dunkin Donuts coffee comes from
Dunkin Donuts does not publicly divulge where they source their coffee. The general consensus in the industry, plus information I’ve gleaned, is that their (non-espresso, at least) coffee is mainly sourced from Brazil, Guatemala, and probably Colombia.

Brazil is the world’s largest producers of low-grade arabica coffee, much destined for supermarket blends. Because of its climate, topography, and soil, most of Brazil’s coffee is grown in sun monocultures, mechanically harvested, with high inputs of chemicals, making it difficult to certify as organic or Bird-Friendly (there are no Bird-Friendly certified farms in the country). Although there is a movement towards some producers supplying specialty coffee, the main push in Brazil’s coffee agribusiness is towards increasing technification, due to the lack of land in which to expand to increase production [1].

[Update: Thanks to reader Lesa Gardner for pointing out a 2012 item on Dunkin’s own blog about an employee visit to a Brazilian coffee farm they source from: a vast, full sun plantation, with photo.]

In Colombia, technification of coffee was encouraged beginning in the 1970s by the national coffee growers federation. As of the mid-1990s, about 68% of Colombia’s coffee growing areas were technified (sun) coffee, representing 86% of total production.

Sourcing from Guatemala is perhaps the “best” justification for claiming shade-grown status, as most of Guatemala’s coffee is shade grown. However, a 2001 news article indicated that Dunkin Donuts sourced from the El Pajal/Santa Rosa area. That’s in Alta Verapaz department and considered part of the CobÁ¡n region, which has the lowest altitude, highest rainfall, and highest humidity of any of Guatemala’s eight coffee areas. Coffee grown in wet, cloudy areas like this are rarely grown in the shade. Indeed, a number of biodiversity studies comparing sun coffee and shade coffee used this region because of the presence of large sun coffee plantations and heavily managed shade monocultures [2].

Dunkin Donuts environmental standards
The environment page of the corporate responsibility section of their web site is brief. It notes that in 2008 Dunkin Brands “began to assess the impact of our business on the environment.” They have created an energy efficiency pamphlet for franchisees. There are 8,800 Dunkin Donuts stores in the world; last year they opened one LEED-certified store. It serves coffee in paper cups, whereas most of the company’s 2.7 million cups of coffee served per day are made of polystyrene (“Styrofoam”), which sit in landfills for over 500 years. These cups represent 4% of the total number of polystyrene cups discarded in the U.S. each year.

I’ve tweeted Dunkin Donuts regarding that original statement on Twitter, and I’ve also directly e-mailed the company. So far, I’ve not received a reply. I’ll continue to try to clarify the claim that they use shade coffee. But all the evidence I’ve uncovered so far indicates that they do not use organic or shade-grown coffee, and that Dunkin Donuts has so far not been the kind of environmentally-friendly company I would ever choose to support.

When it comes to supporting the environment, Americans should run from Dunkin.

A final unsavory note: In 2006, Dunkin Donuts was purchased by a consortium of private equity companies: Bain Capital, The Carlyle Group (heavily politically connected and formerly all mixed up in the defense industry), and Thomas H. Lee Partners. Since that time, the company has been suing their franchisees at a brisk pace. An attorney who represents franchise owners said, ”Dunkin has decided that there’s a smarter, more efficient way to increase revenues and that is to find and target franchisees that are vulnerable.” A big chunk of the debt used to finance the purchase of Dunkin Donuts comes due in 2011, and the company is thought to be behind on financial targets needed to extend the debt repayment. If they are feeling a pinch, paying more for sustainably-grown or certified coffee is probably not on their agenda.

[1] Brazilian Agricultural Research Corp. (EMBRAPA) report, 2006 (PDF); Manoel Correa do Lago, Brazilian exporter and economist, pers. comm.

[2] Greenberg, R. and J. Salgado-Ortiz. 1994. Interspecific aggression by Yellow Warblers in a sun coffee plantation. Condor 98:640-642 and Greenberg, R., P. Bichier, A. Cruz-Angon, and R. Reitsma. 1996. Bird populations in shade and sun coffee plantations in central Guatemala. Conservation Biology 11: 448-459.

Dunkin cup photo by the Consumerist, under a Creative Commons License.

Corporate coffee / McDonald's

McDonald’s coffee in the U.S.

Background
When McDonald’s introduced its Premium Roast coffee in 2006, it was selling 500 million cups of coffee a day in the U.S. alone, or one out of every ten cups sold outside the home. On the heels of that success and that of the growing high-end coffee market, McDonald’s in May 2009 launched its McCafe line of espresso drinks nationwide. These drinks are based on beans from Latin America and Indonesia, and are currently available in over 11,000 U.S. locations.*

Across products, the company has a diverse and complicated supply chain, as you might imagine. They favor multiple suppliers which often vary geographically. This is true with their coffee: McDonald’s does not roast its own coffee, so it obtains its beans from other roasters.

Fast food coffee: how does McDonald’s coffee compare?
Personally, I rarely drink coffee outside my home. Quality and taste issues aside, if I don’t know where it comes from, I don’t want to drink it. But when I think about other ubiquitous fast food outlets and their brewed coffee, I think about Folger’s being served at Wendy’s, about Dunkin Donuts being owned by three creepy private equity firms (providing little or no information on where their coffee comes from), and another of the “big four” corporate roasters, Sara Lee‘s Douwe Egberts division, supplying Burger King’s coffee. These are horrible choices, driven by profit. Quality and environmental sustainability not top priorities. Or if they are, none of those companies are making any effort to disclose to the public where they source their green beans and what environmental protection (or producer compensation) measures they undertake.

McDonald’s coffee suppliers
In comparison, the identity of McDonald’s major coffee suppliers are known, albeit with a little digging. Information on the the sourcing policies of those suppliers varies (discussed below). I’m most impressed with Green Mountain and Distant Lands. Those of S&D and Gaviña are more opaque.

The roasters below supply beans to the McDonald’s McCafe drink line. The first two also did/do supply beans for drip coffee. That is generally done on a regional basis, so I presume that the espresso line is supplied regionally as well.

S&D Coffee
This Concord, NC-based company is one of the leading roasters to the food service industry, supplying tens of thousands of commercial customers with coffee and allied products. S&D has supplied McDonald’s with coffee for over 30 years, and in 2008 was named McDonald’s supplier of the year. It was founded in 1927 and is still privately held by the Davis family. It is much more difficult to find out how privately-held companies source their coffees. A look at their line up reveals that they have several dozen wholesale coffee selections, including a few that are certified by Rainforest Alliance (at the 30% level. e.g., the products contain only 30% certified beans). While some coffees are single origin, little to no detail is provided, at least on the web site.

Gaviña Gourmet Coffee
Gaviña is based in southern California. Founded in 1967 by Cuban immigrants, it is still privately held by the Gaviña family, and currently roasts 32 million pounds of coffee annually. Gaviña has supplied McDonald’s since 1983, first with drip coffee and now with beans used in the espresso-based drinks. McDonald’s represents 15% of Gaviña’s sales. Other big commercial customers include 7-Eleven and CostCo. Gaviña sources coffee from about 40 different countries. Gaviña doesn’t divulge the three or four Latin American nations used in McDonald’s McCafe drinks; they say that’s proprietary information (but see below). Guess that means we can’t narrow it down to the cooperative or farm level! Gaviña’s web site indicates they have a limited selection of organic coffees, and a search for other certified coffees comes up blank.

Distant Lands Coffee
Distant Lands Coffee is one of the newer McDonald’s suppliers. The original roasting plant is in Texas, and recently they added another near Seattle. Among other places, Distant Lands supplies coffee to Safeway supermarkets and Panera Bread. In my post about Panera’s coffee, I went into some detail about Distant Lands and had good things to say about their commitment to quality and sustainability, which you can read about there. The fact that Distant Lands also owns or manages the farms they source from (such as chairman Bill McAlpin’s well-known La Minita in Costa Rica) was appealing to McDonald’s.

According to a Chicago Tribune article, at least one McDonald’s rep traveled to Distant Lands’ managed farms in Costa Rica, Brazil and Guatemala (as well as Indonesia), thus revealing the origins of at least three of the Latin American countries McCafe drink beans come from.

One other McDonald’s coffee supplier is worth noting. Vermont’s Green Mountain Coffee Roaster has been supplying Newman’s Own organic and Fair Trade certified coffee to around 650 locations in New England since 2005. Unlike the other suppliers, GMCR is publicly-traded. They have a great corporate responsibility record, source a lot of sustainably-grown coffee , and have many initiatives in coffee-growing communities. GMCR only supplies coffee to McDonald’s for drip, but it’s probably one of the most responsibly-sourced cups you’ll get at any fast food establishment, if you are fortunate enough to live in the region supplied by GMCR.

McDonald’s and Rainforest Alliance outside the U.S.
In smaller (and some would say more eco-conscious) markets, McDonald’s has gone a step further. All McDonald’s coffee in Australia is Rainforest Alliance certified. The web site specifically says, “Every bean we grind at McDonald’s Australia is made using 100% Arabica coffee beans sourced only from Rainforest Alliance Certified farms in Brazil, Colombia and Costa Rica that meet strict environment and social standards.”

In the UK, where as of early 2007 McDonald’s was selling 143,000 cups of coffee daily, the company also uses Rainforest Alliance certified coffee exclusively. There, they source through Kraft under their Kenco brand. According to McDonald’s, they are expanding certified coffees throughout Europe, where all their coffee will either be Rainforest Alliance or Utz-certified.

As a reminder, neither of these certifications is specifically geared towards shade or biodiversity. More on Rainforest Alliance shade standards here and Utz environmental standards here.

Where does this leave us?
Getting coffee at a fast food chain is not the usual or best path to uplifting farmers, preserving the environment, or even appreciating great coffee. That being said, if I had to do it, my conclusion is that I’d feel least guilty getting a cup of coffee at McDonald’s than at other big fast food chains.

Perhaps, we can make it better. One thing on the McDonald’s corporate responsibility web page caught my eye:

“Other McDonald’s markets such as McDonald’s USA are working with suppliers to learn more about sustainable sourcing options for coffee. They will continue to monitor customer preferences and develop their coffee sourcing accordingly.”

McDonald’s has responded to consumer pressure in the past (albeit prolonged and crushing). Let them know that you want to see all of their U.S. coffee come from sustainable sources. Here’s how you can contact them:

Phone: 1-800-244-6227
Snail mail: McDonald’s Corporation, 2111 McDonald’s Dr., Oak Brook, IL 60523.

—–

*About half of McDonald’s 30,000+ locations are located outside of the U.S., and while I’ll discuss their sustainability efforts in other parts of the world — notably the U.K. and Australia — this post focuses on the coffee in their U.S. stores.

First two coffee cup photos by Majiscup, last by Avlxyz under Creative Commons License.

Background information / Corporate coffee

When birders drink Folgers, part 2

(Part 1 here)

Last Saturday was International Migratory Bird Day. This annual event coincides with the peak of spring migration and is intended to increase awareness of birds and their conservation throughout the Western Hemisphere. Lots of organizations, parks, and refuges have birding events. I was reading about one of these celebrations (I later heard 15,000 people showed up) and the author made this comment on a picture of a throng of birders lined up on the trail: “There is tens of thousands of dollars of camera hardware in this photo, and the total value of optics and camera equipment on the trail would be utterly staggering if it could be tallied.”

I immediately wondered how many of these affluent people spent a few extra bucks to make sure that the coffee they drank supported the birds they were photographing, watching, and enjoying so much.

Probably not that many; I’ve written before about how resistant birders can be to changing their coffee-buying habits. The top reasons I’ve heard over and over are that shade-grown/sustainably-grown coffee is too expensive, or too inconvenient (certified shade coffee, in large part due to lack of demand, can be hard to find). The latter is really related to the former. I can’t imagine anything more easy than ordering coffee online to be delivered to my door, and there is plenty of sustainable coffee available this way. But this adds shipping to the cost, so it again comes down to price.

For the most part, this is a flimsy excuse coming from most active birders. Here are some facts:

  • A 1991 profile [1] of American Birding Association members showed that 46% of members responding to the survey had incomes over $50,000.
  • The same study showed that ABA members spent $3,374 annually on birding, with 74% of that total going toward travel to see birds, and 17% on equipment.
  • Around the same time, a survey of active birders [2] in the general public showed 16% had incomes greater than $50,000 (at a time when the average U.S. income was $20,000).
  • That study provided an annual expenditure per birder of $1,852, of which 71% was travel related.
  • A more recent survey by the U.S. Fish and Wildlife Service [3] found that 27% of people who lived in households earning greater than $75,000 identified themselves as bird watchers.

I’ve already pointed out that great, sustainably-grown coffee doesn’t actually cost that much on a per cup basis. How about on an annual basis, to put the expense in line with the figures above?

While your mileage may vary, a pound of coffee generally yields about 40 to 45 eight-ounce cups of coffee. If you drink two cups a day, you go through 18 to 20 pounds of coffee a year. If you buy cheap, unsustainable supermarket coffee you probably pay between $5 and $7 a pound. I’m asking you to buy tasty, sustainably-grown coffee from a smaller specialty roaster, at around $10 to $13 a pound, or somewhere around $100 to $150 more a year.

Another report [4] described birders as “… the major, perhaps only, user-group of neotropical migratory birds.” Many of the active birders I know wouldn’t blink an eye at gassing up the car and taking off to see a rare bird hundreds of miles away, and many I know do this several times a year. But they are unwilling to spend the money to make sure those birds are around in years to come. Maybe the goal is to make all birds rare. If so, by drinking cheap coffee, they are doing a good job.

[1] Wauer, R. 1991. Profile of an ABA birder. Birding 23:146-154.

[2] Wiedner, D. S. and P. Kerlinger. 1990. Economics of birding: a national survey of active birders. American Birds 44:209-213.

[3] Birding in the United States: A Demographic and Economic Analysis. Addendum to the 2001 National Survey of Fishing, Hunting, and Wildlife-Associated Recreation (Report 2001-1). 2003. 24 p. (PDF)

[4] Kerlinger, Paul  1993.  Birding economics and birder demographics studies as conservation tools.   In: Finch, Deborah M.; Stangel, Peter W. (eds.). Status and management of neotropical migratory birds: September 21-25, 1992, Estes Park, Colorado. Gen. Tech. Rep. RM-229. Fort Collins, Colo.: Rocky Mountain Forest and Range Experiment Station, U.S. Dept. of Agriculture, Forest Service: 32-38.(PDF)