Category: Corporate coffee Page 2 of 5

Nestlé: Saying no to coffee certifications

By

On February 1, 2013

In Certifications, Corporate coffee, Nestlé/Nespresso

Nestlé is the world’s largest food company, with 2011 sales of $94 billion. Some of the most popular of their many coffee brands are Nescafé , Nespresso, and Taster’s Choice. The company buys upwards of 850,000 tons of coffee annually, of which less than 1% is eco-certified.

Nestlé’s most recent corporate responsibility report, Creating Shared Value 2011 (PDF), makes some specific statements about what this big multinational company thinks about sustainability certification.

The company presents its overall position in a section titled Third-party certifications and Responsible Sourcing: “Certification is not an end point in itself, and only one of several ways of Creating Shared Value, promoting sustainable rural development and progressing other development goals in an effective and holistic way.”

In the section specifially devoted to coffee, there is a sub-section titled Marketing certified coffee to consumers. Here’s what it says:

Currently, there are no plans to market certified coffee to consumers (ie, coffee carrying a certification seal on the label). We believe that our own Responsible Sourcing Platform, which combines in-house codes and guidelines, capacity-building teams for key commodities and suppliers, NGO and industry partnerships and third-party certifications, offers a more targeted approach than certification alone.”

Unfortunately for consumers, Nestlé offers few details on their “Responsible Sourcing Platform” so that we can judge whether we think their coffee is really grown in a sustainable manner. They do mention that the “Nestlé Supplier Code is an integral part of any green coffee contract.” This document is publicly available (PDF). It’s easy reading. In fact, it’s only 6 pages, three of which are the covers and title page.  Here are the sections on Sustainability and Environment, in their entirety:

  • Sustainability Nestlé supports and encourages operating practices, farming practices and agricultural production systems that are sustainable. This is an integral part of Nestlé’s supply strategy and supplier development. Nestlé expects the Supplier to Nestlé to continuously strive towards improving the efficiency and sustainability of its operations, which will include water conservation programs.
  • Environment 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.

That’s it. Nothing specific, no standards, guidelines, or benchmarks. In contrast, the basic farm standard of Rainforest Alliance runs 49 pages. Starbucks CAFE Practices has 7 pages of criteria just devoted to environmental leadership for its coffee suppliers.

Nestlé states that “For coffee, biodiversity issues are managed primarily through the use of the 4C Coffee Code and the Nespresso Sustainable Quality AAA programme for coffee sourcing.” Please read this post to learn how 4C compliance merely indicates marginal standards of human and environmental decency. As for the AAA Sustainable Quality program, see this post for an overview of the environmental and social requirements for producers in the Nespresso AAA Sustainable Quality Program, with its low bar for inclusion.

Maybe there’s more to their sourcing guidelines, and they include fabulous safeguards for the environment. I assume if that were the case they’d be making sure we know every last detail, and their coffee would easily qualify for various certifications that consumers would recognize and understand. But Nestlé has made it clear they are not interested in these certifications, and that their way is better. Whatever that is; we’re supposed to take their word for it.

Massimo Zanetti coffees

By

On January 17, 2013

In Corporate coffee

Brands owned: Hills Brothers, MJB, Chock Full o’Nuts, and Chase and Sanborn

mz-usa-logo

No transparency, little in the way of eco-friendly coffees despite enormous market share.

Massimo Zanetti Beverage Group is an Italy-based privately-held company. Through its subsidiary Massimo Zanetti Beverage USA, it owns a number of familiar American brands (Hills Brothers, MJB, Chock full o’Nuts, and Chase and Sanborn) which it acquired in 2005 from Sara Lee Corp; as well as Segofredo Zanetti, Kaua’i Coffee in Hawaii, and private brands.

Massimo Zanetti is thought to be the world’s largest independent coffee company. They trade, process, roast, and distribute coffee, with 11 roasting plants and operations in more than 100 countries. They also grow their own coffee on what is said to be the largest coffee plantation in the world, Nossa Senhora da Guia in Pimenta, Minas Gerais, Brazil. I estimate its size at between 2500 and 3000 hectares of sun coffee monoculture. You can view it here on Google Maps. With their 2011 acquisition of Kaua’i Coffee, they now own the U.S.’s largest coffee plantation, 1250 hectares of sun coffee monoculture. In total, they handle around 150,000 tons of green coffee annually.

Two photos of Massimo Zanetti's Kaua'i Coffee farm.

Two photos of a portion of the Massimo Zanetti’s Kaua’i Coffee farm, taken as part of NASA’s UAV coffee project. MZ’s farm in Brazil looks similar, but is even bigger.

Certified coffees and ecological sustainability

As a privately owned company, Massimo Zanetti does little in the way of disclosure of its sourcing practices. In fact, the green/healthy/safe product rating site Good Guide gave Massimo Zanetti Beverage USA a zero score for transparency in both the Environmental and Social Performance categories. Similarly, Europe’s Rank A Brand gave the Segofredo Zanetti brand a zero score and said this: “This is our lowest possible sustainability score, and Segafredo has earned it by communicating nothing concrete about the policies for environment, carbon emissions or labor conditions in low-wages countries. For us as consumers, it is unclear whether Segafredo is committed to sustainability or not.”

As for their U.S. brands, a search of each of the individual web sites found no organic or eco-certified varieties for Kaua’i Coffee, Hill’s Bros., Chase and Sanborn, Segafredo, or MJB.  I found one variety out of ten of Chock full o’Nuts that is certified organic. Hills Bros. at one time had an organic/Rainforest Alliance certified blend that is apparently not in current production, although I have seen it still available at some retailers. I widened my search to include any certified coffee, and the organic Chock full o’Nuts was the only one.  This represents only a tiny fraction of the 120,000 to 150,000 tons of coffee this company handles annually.

Since the company does not disclose any information, there are no further details on certified coffee purchases or ecological sustainability.

The Good Guide was also stymied in calculating ratings for Massimo Zanetti coffee brands. Each one scored <3.5 points out of ten, among the lowest scores (the lowest of any coffee brand is 3.2). The “environmental sustainability” scores were boosted by the 7 points earned in the packaging subcategory, since many of the brands are sold in recyclable steel cans. I’m not sure how they scored 3 points in the certifications category, which specified that the coffees carried no certifications.

In any event, Good Guide has these brands flagged as ones to avoid. I completely concur. None of these brands represents good ecological practices, protecting biodiversity and habitat, or environmental sustainability. Or if they do, nobody is telling.

Popular coffee brands: a compilation

By

On January 10, 2013

In Corporate coffee, Retail and specialty roasters

Over the years, I have examined the sustainability (eco-certifications, sourcing transparency, corporate social responsibility efforts, etc.) of many popular coffee brands. Here is a compilation of those posts.

First, who owns what brands?

Many coffee brands are owned by just a few large multinational companies. These companies buy most of the world’s coffee as a commodity, and strive for profit over sustainability. These companies have been the drivers of low coffee prices at the expense of habitat, biodiversity, and farmers. While there are some certified choices among these brands, they make up just a tiny fraction of the coffee purchased by these companies, and the companies themselves often have dismal overall corporate responsibility records. Here are the companies and brands that are best avoided (links are to related posts):

  • Nestlé (and here) — Nescafé, Nespresso, Taster’s Choice, Clasico.
  • Smuckers — Folgers, Millstone, Dunkin Donuts bagged coffee, Cafe Pilon, Cafe Bustelo, Java Coast.
  • Kraft Foods — Yuban, Maxwell House, General Foods International Coffee, Gevalia, Kenco, Maxim, Tassimo, Nabob, Sanka.
  • Massimo Zanetti — Chock Full o’Nuts, Chase and Sanborn, Hills Bros., MJB. A huge privately owned company which sources a lot of its coffee from it’s own massive full sun plantation in Brazil, said to be the largest in the world.

I regularly update a table on how much certified coffee is purchased by the large coffee companies; it includes other popular large buyers such as Starbucks and Green Mountain Coffee Roasters. If you’d like to know under what “standards” most commodity coffee is produced, see this post on the big industry code of conduct — it’s a real eye-opener.

Popular coffee brands, retailers, and fast food coffee

Conservation/partnership coffees

  • Songbird Coffee, partnership coffee with American Birding Association and Wild Birds Unlimited (Thanksgiving Coffee Company). A number of organic selections, all labelled as “shade grown” but none certified as Rainforest Alliance or Smithsonian Bird-Friendly (although they do sometimes buy from at least one Bird-Friendly certified producer, they do not use the Bird-Friendly seal). [Update: Songbird Coffee is now a partnership with the American Birding Association, and is Bird-Friendly certified]
  • Audubon Shade Grown Coffee (Rogers Family). Now all certified organic and Rainforest Alliance. Note that they are marketed as “certified shade grown,” even though RA certification does not guarantee the coffee was grown under shade. [Update: Audubon coffee is now roasted by Birds & Beans Canada, and is Bird-Friendly certified]
  • Birds and Beans (US). Exclusively Smithsonian Bird-Friendly (and hence, organic) certified coffees. Supports bird conservation organizations.

Two other conservation coffees we reviewed, National Geographic’s Terra Firma, and National Wildlife Federation Blend (Green Mountain Coffee Roasters) have apparently been discontinued since the reviews.

Researching these takes quite a bit of time, especially if the brand is owned by a large corporation (they tend to be secretive) or is privately-held (no annual reports or legal disclosures to dig through). But make your suggestions for future posts in the comments…maybe I’ll do a poll if there is enough interest. Just make sure your candidate has a broad geographic distribution.

Dunkin Donuts coffee: still not eco-friendly

By

On August 21, 2012

In Corporate coffee, Dunkin Donuts

[There is a 2021 update incorporated into this post]

In 2009, I refuted the false statement made by Dunkin Donuts on Twitter that their coffee was shade-grown, and provided background on their coffee purchases. Let’s see if anything has changed.

According to their 2010 Corporate Social Responsibility Report, Dunkin Donuts purchased nearly 50,000 metric tons of green coffee in 2010. The report states that DD purchased 11,745 tons of Fair Trade certified coffee in 2010; it primarily (only?) goes into their line of espresso drinks. This amounts to about 23% of their purchases, but as we have learned, FT certification has little in the way of substantial, quantifiable environmental standards. They are so generic that I don’t include FT certified coffee in my assessment of eco-certified purchases.

On their website, DD mentions that a good percentage of Fair Trade coffee is certified organic, but never say that any portion of the Fair Trade coffee they buy is organic. I hate this kind of deceptive fact-dropping.

The report provides another example of resume-padding. It explains that back in 2008, DD provided a $70,000 grant to Rainforest Alliance, which helped three producer groups gain RA certification. There is no mention that DD purchases this coffee or that they intend to, only that they “are exploring additional opportunities to work with the Rainforest Alliance.” Let’s put the Fair Trade purchases and Rainforest Alliance grant in perspective. Dunkin Donuts boasts that as of the end of 2010, their FT purchases have returned just under $1.9 million to producers, impacting 30,000 people — cumulatively, since 2004.

2017 – 2021

Dunkin Brands, like many other coffee and restaurant companies, has undergone management reshuffling and changes in ownership over the past decade. The most recent sustainability report was dated 2017-2018, and is no longer available on their website, perhaps because as of the end of 2020, Dunkin was acquired by Inspire Brands.

This report noted:

  • A goal of sourcing 100% Rainforest Alliance certified coffee for their (one single variety) Dark Roast by the end of 2018. This variety was introduced by Dunkin in 2014 as 30% Rainforest Alliance certified, and the report indicates that it was still only 30% certified. Given that Rainforest Alliances’s allowance for only 30% certified beans was highly criticized and appears to now not be permitted under RA’s new use-of-seal (and in fact, the seal no longer even uses the word “certified”), one wonders if Dunkin will bother sourcing any Rainforest Alliance associated coffee for this variety if they can’t promote it as such.
  • They announced a new goal of mapping their global coffee supply chain by the end of 2020. It’s never a good sign if a company doesn’t really know where their coffee comes from.
  • They noted having donated over $400,000 to Rainforest Alliance since 2010 (e.g., an average of $50,000 a year), and that they were now donating a percentage of the sales of each pound of Original Blend to World Coffee Research, and expected to donate $2 million to them through 2022 (e.g., an average of $400,000 a year). The WCR donation is the only goal the company commits to in their Sustainable Coffee Challenge profile.

Let’s put their financial contributions in perspective: their 2020 proxy statement shows that the 2019 salary of their CEO was $900,000 and his total compensation package was nearly $5.5 million! Total compensation of the top 6 executives for the year 2019 was over $13.2 million.

Nothing has changed, little effort has been made by Dunkin Donuts to source, sell, or meaningfully support sustainably-grown coffee. Furthermore, Inspire Brands is owned by the private equity firm Roark Capital, and therefore it’s likely we will not see much in the way of transparent metrics if we even see any sustainability reports in the future.

America, run from Dunkin.

Smucker’s sustainability, take 3

By

On August 8, 2012

In Corporate coffee, Smucker's

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.

Let’s try this again

By

On March 15, 2012

In Corporate coffee, Smucker's

Shareholders will again propose that Smucker’s develop a coffee sustainability plan

JM Smucker Co., owner of coffee brands including Folgers, Millstone, Kava, and Café Bustelo, is the fourth largest buyer of coffee in the world. In 2010, they purchased over 250,000 tons of coffee, and only a fraction of a percent was certified in any way. A recent analysis by the Tropical Commodity Coalition notes that the company “does not provide verifiable procurement figures of certified coffees, has no specific goals for a more sustainable coffee sector, and its future commitment is extremely vague.”

Readers will recall that last year two major investors, Trillium Asset Management and Calvert Investments, put forth a shareholder proposal requesting that Smucker’s prepare a sustainability report.  The Smucker’s Board unanimously recommended that shareholders vote against this proposal. Nonetheless, at the August 2011 meeting,  roughly 20% of shareholders voted in favor of the proposal, with another 10% abstaining, for about a third not agreeing with the board*. (You can read the whole story with background here.)

This year, a similar shareholder proposal will be presented. The resolution, filed recently by Trillium Asset Management, requests that Smucker’s, within six months of the annual meeting, develops and publishes a coffee sustainability plan that goes beyond the insipid 2011 “plan.” This proposal will specifically ask that the plan include:

(1) quantitative goals for quantities of certified coffee purchases; (2) a method for evaluating the success of the plan in addressing the challenges of climate change to the Company and the farmers and ecosystems in its coffee supply chain.

American consumers continue to reward Smucker’s. The U.S. retail coffee segment contributed 49% of the total profit for the company in the quarter ending in January 2012; this segment reported a profit margin of 21.7%.

From their nostalgic ads featuring a bygone era, to their honoring of centenarians via Willard Scott, to their antediluvian view of sustainability and transparency, Smucker’s is stuck in the past. Hopefully this proposal will meet with some success at the annual meeting this summer and move Smucker’s into the present day.

*Another interesting proposal has been filed by a different group, asking that Smucker’s follow the Security and Exchange Commissions standard for proxy vote counting. Currently, Smucker’s counts all abstaining votes as votes in favor of management. Abstentions, where shareholders want their vote noted but not counted, are not figured into the SEC  formula. Counting these as in favor of the management seems to clearly be against the wishes of the abstaining voters.

Final word on eco-purchases by big buyers

By

On February 14, 2012

In Corporate coffee, Starbucks

The final publication by the recently disbanded Tropical Commodity Coalition was the Coffee Barometer 2012. I have used TCC data to put together summaries (most recent here, just updated with the receipt of the latest report) on how much eco-certified or verified coffee is purchased by the world’s major coffee buyers.  While my summary table focuses on buyers of particular importance to U.S. markets, the Coffee Barometer includes all top ten buyers.

Here is what TCC had to say about them. You can refer to my post for information on NestlÁ©, Kraft, Sara Lee, Smucker, Starbucks, Green Mountain, and Caribou (the last two are U.S. companies I chose to include that are not in the TCC report).

  • Strauss — Strauss Coffee is part of the Israeli food company Strauss Group; its primary markets are in Eastern Europe, Israel, and Brazil. According to TCC, the coffee company has no clear commitments, no public sharing of figures or sustainability strategy, not known to invest significant resources to sustainability in their coffee business. 5th largest buyer, purchased 215,000 metric tons in 2010.
  • Tchibo — Germany company owned by a the wealthy Herz family. Working toward 100% of coffee being traceable to the farm level, may use various certifications or verifications, including those with weak or marginal eco-standards.  In 2010, five percent of their purchases were eco-certified (out of 173,000 metric tons, 6th largest buyer).
  • Lavazza — Based in Italy. No clear clear sustainability strategy or public figures available. 7th largest buyer, purchased 140,000 metric tons in 2010.
  • Aldi — Famously secretive German company operating discount grocery chains in many countries including the U.S. No clear commitments, no public sharing of figures or sustainability strategy, not known to invest significant resources to sustainability in their coffee business. Further: “Aldi, a reputed laggard, disinclined to share any information regarding its coffee business.”  9th largest buyer, purchased 120,000 metric tons in 2010.
  • Segafredo — a brand of the Massimo Zanetti Beverage Group. The company grows, roasts, and distributes its own coffee, and owns the largest coffee plantation in the world, located in Brazil (I assume it is the vast sun monoculture featured on this page of its web site). No clear clear sustainability strategy or public figures available. 10th largest buyer, purchased 70,000 metric tons in 2010.

So, of the top ten buyers, seven (NestlÁ©, Smucker, Sara Lee, Strauss, Lavazza, Aldi, and Segafredo) are essentially ignoring environmental sustainability in their coffee supply chains and buying little, if any, coffee that is produced under meaningful environmental standards. This represents over 1.9 million tons (24% of world production).

Two (Kraft and Tchibo) are making nominal efforts, with 7% and 5% of their coffee supply, respectively, being eco-certified. Their certified purchases combined are less than 60,000 tons (or less than 1% of world production).

Only one of the top 10 buyers, Starbucks, is sourcing a large portion of its coffee under worthwhile eco-standards. In 2010, this was 84% of the 122,000 tons it purchased, with a goal of 100% in the near future. Kudos to the Mermaid.

Sips: Big companies, small packages

By

On February 8, 2012

In Coffee news and miscellany, Corporate coffee

News from big roasters, about big plans, with some science and sustainability tossed in.

And finally thanks, Minnesota Zoo, for the shout-out to Coffee & Conservation in your “Do One Thing” campaign.

Corporate coffee: How much is eco-certified?

By

On January 16, 2012

In Certifications, Corporate coffee, Data summary tables

How much eco-certified coffee is purchased by the big coffee companies?

Not to be used without permission. Latest update March 2021.

The focus here is on the major world buyers and others with top U.S. market share.  These players change over time, and the table is updated to reflect this. The latest update reflects the past several years of major coffee mergers and acquisitions, primarily by JAB Holding and its subsidiaries. As this is a private company, much of the data that was once public is now unavailable.

Certified purchases include only those that include environmental standards. Organic is a primary consideration; since Smithsonian Bird-Friendly must be certified organic, it is included in the organic category. I’ve included Fair Trade if it is also designated as organic. Rainforest Allaince is included, although the new standards for certification have weakened their ecological criteria. Other certifications or considerations are included in the notes.

Data sources will be linked or included in the footnotes. I’ve converted all volumes to metric tons for comparison; some volumes and percentages are calculated or extrapolated from closely related figures. As a point of reference, world coffee production in 2020 was about 10.5 million metric tons.

Company
Purchases
Certified
purchases
Nestlé
Purchases about 9.1% of world volume. Relatively small U.S. market share (<9%)1,2
2008: 780,000
2010: 870,0001 (49,020 tons was Nespresso3,6)
2013: 860,0003
2014: 842,0003
2015: 849,0003
2017: 870,000
2018: 845,4907
2019: 907,0001		2010: 2000 Fair Trade, Utz, Rainforest Alliance, and/or organic1 (0.2%), see note.
2013: 2000 Fair Trade/organic1 (0.2%).
2017: All certifications combined, including Fair Trade, approx. 81,000 (9%)
2018: Over 56% of their purchases were "sustainable" coffee, but that includes mostly 4C and their proprietary Nespresso AAA purchases, which don't count here as eco-certified.7
2019: 606,000 tons (66.8%) was "sustainable" including 115,000 tons under their own Nespresso AAA plan (see below).1 Not broken down by other certifications or sustainability schemes.
Nestlé has stated, "There are no plans to market certified coffee to consumers... We believe that our own Responsible Sourcing platform...offers a more targeted approach than certification alone." (2011 "Creating Shared Value" report3.)

In their 2015 Creating Shared Value report3, Nestlé reports that 56% of their coffee is traceable back to the farm or plantation, and is therefore "responsibly sourced." They define responsibly sourced green coffee as verified against the 4C Code of Conduct (read about these very marginal standards here) or equivalent or more demanding standards, private or public. In their 2019 Creating Shared Value Report, the company merely states that their 2020 goals of 70% of Nescafe coffee being "responsibly sourced" and 100% of Nespresso coffee being sourced under their AAA program are "in progress" with few metrics provided. Their "no deforesation" commitment and progress does not include coffee.

Their private standard is the Nespresso AAA Sustainable Quality program, based on Rainforest Alliance principals (not certification). Their goal is to source 100% of their Nespresso coffee under these standards by 2020. In 2017, approximately 77000 metric tons of coffee was sourced under the AAA program. See this post for details. In 2019, a total of 115,000 metric tons were produced under the AAA program (12.7% of Nestlé's total purchases), but only 87,000 tons were sold as such.1
JAB Holding Co.
I have tried to combine some companies and brands owned by JAB Holding or in which JAB Holding is a majority shareholder, whether under this name or one of its subsidiaries (including Acorn Holdings, Pret Panera, JDE Peet's, Keurig Dr. Pepper, etc.).

Purchases at least 7-8% of world volume (this figure is the JDE-Peet's holdings alone). Relatively small U.S. market share (<4%).1,2,8		2008: 740,000
2010: 700,0001
2013: 500,0001
2016: 728,000 for JDE alone based on 8% of world production
2017: 710,000 for JDE alone.
2019: 730,000 for JDE Peet's alone1

2008-2013 figures are historical and reflect purchases of some acquisitions.		2008: 29,500 Rainforest Alliance (4%)
2010: 50,000 Rainforest Alliance (7%)
2012: 52,000 Rainforest Alliance
2013: 55,000 Rainforest Alliance (11%)1
2017: All certifications combined, including Fair Trade, approx. 142,000 (20%)
2019: For JDE Peet's, 153,000 tons (20.9%) were under some sort of "sustainabilty" scheme. This includes 4C, Fairtrade, UTZ, Rainforest Alliance, and other verifications.1,8

2008-2013 figures are historical and reflect purchases of some acquisitions.
JAB is privately held, and thus data on purchases and certifications is generally not publically available. Some brands are continuing their own sourcing.

The CSR report of their JDE division (prior to the merger creating JDE Peet's) in 2019 stated a goal of working towards 100% "responsibly sourced" coffee by 2025 (accompanied by a nice photo of sun coffee.) Rainforest Alliance aids them in their "Common Grounds" responsible sourcing efforts. 8

Prior to their purchase by JAB, Caribou Coffee was the first major coffee shop to source 100% Rainforest Alliance certified coffee. For a time, they continued their own sourcing of certified coffee, but now many coffees on their site do not bear the seal of Rainforest Alliance or any other indication of certification, nor do they publish an annual report of their own.
JM Smucker

Purchases about 3.6% of world volume. Largest U.S. market share (nearly 20%), nearly all of which is one brand: Folgers.1,2		2008: 280,000
2010: 250,0001
2013: 300,0001
2017: 350,0001
2019: 360,0001		2008: 1,500 (0.5%) was certified either Rainforest Alliance, Fair Trade, and/or organic.
2010: Data not disclosed. See note.
2013: Apparently, none.1
2015: 10% of some unknown amount from all sources (UTZ, Rainforest Alliance, and Fair Trade.4
2017: Approx. 35,000 UTZ and Rainforest Alliance (10%).
2019: 36,000 tons (10%) were Rainforest Alliance or Utz certified.1
Smuckers' purchases of various coffee brands now make up the largest portion of the company's product sales. In response to heavy shareholder pressure and criticism -- at the time the Tropical Commondity Coalition1 noted, "[Smucker's] seems to lack a clear and concise CSR stategy, ... does not provide verifiable procurement figures of certified coffees, has no specific goals for a more sustainable coffee sector, and its future commitment is extremely vague"-- the company set a goal to buy 10% of total retail coffee from certified sources. Upon reaching this goal in 2015, they only committed to maintaining, not improving, this level 4. This was reiterated in their 2020 report.
Starbucks
Purchases about 3.1% of world volume. U.S. market share data of about 9% includes retail sales which are distributed in North America by Nestlé. I believe Starbucks still sources much of this coffee, but how much is unclear at this time.1,2,5
2007: 160,000
2008: 175,000
2009: 166,000
2010: 122,000
2011: 193,776
2012: 247,208
2013: 179,623
2014: 209,106
2015: 251,744
2019: 310,0001		2007: 103,000 CAFE Practices (64%)
2008: 134,000 CAFE Practices (77%) + 4536 organic
2009: 136,000 CAFE Practices (82%) + 6350 organic
2010: 103,000 CAFE Practices (84%) + 4400 organic
2011: 167,000 CAFE Practices (86%) + 4354 organic
2012: 230,878 (90%) CAFE Practices + 3946
organic
2013: 171,004 CAFE Practices (94%) + 1996 organic
2014: 199,696 CAFE Practices (95%) + 2091 organic
2015: 249,929 CAFE Practices + other certifications
2019: 310,000 CAFE Practices produced (99%, although another 140,00 metric tons were produced under CAFE Practices but apparently sold to other buyers).1
All data comes from Starbucks annual reports unless otherwise noted. Organic totals are provided, but some may be included in CAFE Practices purchases due to multiple certifications, so I've only given percentages for amounts noted in reports as CAFE Practices. Fair Trade purchases are not included in the figures above.

The environmental standards of Starbucks CAFE Practices preferred buyer program are more detailed and stronger than many third-party certifications, including Fair Trade and UTZ Certified. See also my post on recent CAFE Practices assessment reports. The Tropical Commondity Coalition1 noted, "Starbucks appears to be far and away the best in terms of sustainable coffee procurement [of the top ten buyers]..."
Kraft Heinz

Large U.S. market share of nearly 10% dominated by one brand: Maxwell House.2		Amount of coffee purchased by Kraft Heinz is unknown.None of the Maxwell House branded coffee is flagged as certified on packaging, and no information on certified purchases is provided. They did not respond to the 2020 Coffee Barometer survey.1
For many years, and as it was going through mergers and acquistions, Kraft did not publish a corporate responsibility report, or make mention of coffee on their website. Coffee is still not mentioned on their Environmental Social Governance Strategy & Goals page, or specifically regarding responsible sourcing.

In the 2020 Kraft Heinz Environmental Social Governance Report they only highlight their Ethical Bean acquisition, which sources only organic and Fairtrade certified beans. The volume is unknown, but undoubtedly a small enough portion of their total purchases to qualify as greenwash tokenism.

References:

1 The Coffee Barometer Reports supply data approximately every other year. First published by the Tropical Commodity Coalition, they have had several different authors/publishers. Past years are found here: The Coffee Barometer 2009 (PDF).  Coffee Barometer 2012, Coffee Barometer 2014 (PDF); 2018 and 2020 (and hopefully future issues) are now available on this page. Much of their data comes now from companies responding to a survey. Their purchase data is used to calculate percentages of world volume, as provided by the International Coffee Organization statistics. However, these figures should be considered approximate due to company self-reporting, and some changes in definitions of volumes and market shares. Nonetheless, they likely accurately reflect ranking and relative proportions and provide adequate context.
2 Much market share data derives from statistics updated via Euromonitor International, the global market research company.
3 All of NestlÁ©’s Creating Shared Value Reports as well as other press releases and documents are available on this page.
4 JM Smucker Corporate Responsibility / Environmental, Social, and Governance Disclosure reports are available on this page.
5 Starbucks Global Responsibility / Social Responsibility Reports are available on this page.
6 Accelerating progress on the Nespresso AAA Sustainable Quality Program in Central America. March 2011.
7 Global Coffee Platform, Sustainable Coffee Purchases, Snapshot 2018.
8 JDE Jacobs Douwe Egberts 2019 Corporate Responsibility Report.

What’s wrong with cheap coffee, in a nutshell

By

On December 3, 2011

In Corporate coffee, Fair and Direct Trade

The Fair Trade USA/FLO break-up and its ramifications is seeping into the mainstream media. Recently, for example, the New York Times published an article on the debate on the future of fair trade, and NPR carried a radio segment. A piece in Mother Jones magazine by Tom Philpott summed up the kerfluffle nicely, but what really resonated with me in that article was the paragraph on what sparked the genesis of the fair trade movement. It neatly summarizes (much of) exactly what is wrong with big, cheap, corporate coffee:

Huge, rich-world companies like NestlÁ© and Folger’s (now owned by JM Smucker) dominate trade and drive prices down, reaping windfalls. Production consolidates onto huge plantations that employ workers (often, children) at poverty wages; small producers get squeezed out. And as these high-production plantations expand their monocrops to meet global demand, they gobble up high-quality farmlands that might otherwise be supporting smallholders who grow food staples for domestic consumption along with foreign-exchange-earning crops like coffee.

…and destroy biodiversity in the process, I might add.  Read more about the practices and impacts of corporate coffee here.

Greenwash alert: Nespresso capsule recycling

By

On September 12, 2011

In Corporate coffee, Nestlé/Nespresso

(Revised and updated throughout as of January 2022)

Nespresso, the single-serve espresso machine/pod division of giant conglomerate Nestlé, has received accolades for its “Ecolaboration” sustainability project. Nespresso accounts for only 5% of Nestlé’s sales, but Ecolaboration provides the majority of the company’s public green image. I’ve written about the coffee sourcing aspect of this project in the past, revealing what a tiny fraction of Nestlé’s coffee is to be sourced sustainably under this initiative. Here, we’ll take a look at Nespresso’s coffee capsule/pod recycling efforts, which are frequently misrepresented in the media — unfortunately, in Nespresso’s favor.

Nespresso will put in place the capacity to recycle 75% of its capsules. They never claim this many will be recycled, and don’t reveal how many have been recycled in the past. Nespresso’s proprietary coffee capsules, used in their single-serve espresso machines, are made of aluminum, a metal that is entirely recyclable. But just because the capsules are made of a recyclable material doesn’t mean they are being recycled.

What Nespresso is actually doing – increasing capacity

Nespresso encourages recycling by establishing “collection points” (big bins) for the capsules in their boutiques and local communities; in a few areas Nespresso Club customers can return them via courier when new capsules are delivered. Nespresso has never set actual recycling goals, they have only claimed they would increase capacity to recycle the capsules. The current goal is 75% by 2013, up from the current 60%. This means establishing enough collection systems to collect 75% of the capsules — it says absolutely nothing about how many capsules are actually recycled.

What Nespresso is not doing – revealing recycling rates

In their June 2011 progress report, Nespresso repeats their capacity goals, and despite listing all kinds of metrics, never once mentions the true recycling rate for the capsules, only the number of collection points in various countries.

I don’t care if Nespresso’s capacity is 200% of the capsules sold. It means nothing unless the capacity is being used. Nespresso states that 12,300 capsules are used PER MINUTE. That’s 6.4 billion a year*. Even if half are being recycled that means over 3200 metric tons of aluminum is being sent to landfills annually. This is just another example of convenience and profit (the coffee works out to $60/pound, generating an estimated 30% profit margin) trumping environmental responsibility.

As of 2020, it was estimated that *14 billion capsules are sold per year, but as the linked article notes, as the criticism of the company’s environmental impact has increased, the less they’ve reported regarding sales and recycling rates. Experts have said the rate is as low as 5%, with Nespresso claiming about 30%. Even at 30%, the remaining capsules represent 12,600 tons of aluminum being landfilled annually (enough to create 60 Statues of Liberty, according to the article in the Guardian).

What the media is doing – ignoring the above

What is really discouraging is that the media frequently overlooks that Nespresso is talking about capacity and not actual recycling rates. Examples of articles that mistakenly say Nespresso will be recycling 75% of its capsules are here, here, and here, just to show a few. Careless media outlets either miss the distinction, or are unmotivated or don’t care to question the effectiveness and results. As a result is that consumers are left thinking Nespresso is recycling large numbers of capsules instead of distributing tons of waste.

Barriers to recycling Nespresso capsules

I’m not sure if people who already find preparing a cup of coffee from whole beans too much effort are the best candidates to recycle the capsules.  For the most part, they’ll have to collect the capsules at home and schlep them into a Nespresso retail outlet. In the U.S., as I noted in my post about Keurig’s K-Cup recovery program, American consumers don’t always recycle even when it’s easy for them; voluntary residential curbside recycling without incentives in the U.S. averages around 68%.

And why can’t Nespresso capsules just be tossed in recycling bin, like other aluminum? As with K-Cups, the coffee grounds have to be separated from the capsules by the consumer. This leads to the second problem: many recycling programs cannot process items as small as the Nespresso capsule because they fall through the holes used for weeding out debris, or jam the sorting machines. Therefore, well-meaning consumers may very well just be sending them to someone else to toss in the garbage.

An update in 2019, verifes that 1) most recycling systems cannot handle these little pods and 2) only 33% of U.S. Nespresso customers send back their pods to the company, even though it’s free. Yes, the company has spent some money in New York City so that the pods (as well as similar metal items) can be recycled at their facilities. But that’s one city in the entire country. Piffle.

A final insult

For years, Nespresso produced many billions of capsules made entirely of new aluminum. This even though they repeatedly touted the recyclability of aluminum on their websites and promotional materials, as if they utilized it themselves. It wasn’t until 2021 that Nespresso introduced (some) recycled aluminum content in (some) of their capsules. The company’s use of new aluminum contributes to the environmental hazards of mining the raw products and producing aluminum. And for the icing on the cake, Nespresso states that their aluminum supplier is the mining giant Rio Tinto, a company with an incredibly long list of environmental degradation, cultural desecration, human and labor rights abuses, and corporate corruption, the linked examples just to name a few!

Greenwash

Strictly speaking, greenwashing is the use of marketing to imply that a company’s products are environmentally friendly. Nestlé’s  statements are clear in what they are (and are not) doing when it comes to their Nespresso capsule recycling, and even their green coffee sourcing. They can’t be entirely blamed for the lack of critical examination of their efforts. However, Nespresso’s very heavily promoted Ecolaboration campaign says nothing about the sustainability of the rest of Nestlé’s coffee division — the other 94% of the coffee they buy.  Or about the lack of genuine corporate citizenship by the entire company itself. I think it’s fair to categorize Nespresso’s capsule recycling initiative, and Ecolaboration itself, as a greenwashing tool for Nestlé, don’t you?

P.S. As they have with Keurig K-Cups, enterprising people have come up with refillable replacement pods for some Nespresso machines. As of 2021, several have gone out of business. The three most popular still available are Sealpod, Capmesso, and RECAPS.

Nespresso capsule photos by Sarah Deforche and Jean-Yves Romanetti.

Folgers owner: not waking up to sustainability

By

On August 18, 2011

In Corporate coffee, Smucker's

Since acquiring Folgers from Procter and Gamble in 2008, Smucker’s has balked at providing meaningful sustainability reporting. Pressure from corporate investors prompted a first-ever corporate sustainability report. The single page on coffee was disconcertingly deficient in details. The Smucker’s opposed a second shareholder proposal to produce a sustainability report specific to coffee.

Only a tiny fraction — half a percent — of the coffee purchased by Smucker’s is certified Fair Trade or organic.

Background

J. M. Smucker’s, the jam and jelly folks, now owns some of the best-known coffee brands in the world. In 2008, Smucker’s took over Proctor & Gamble’s (P&G) coffee division — Folgers and Millstone coffee brands and Dunkin Donuts retail distribution. When it took over P&G’s coffees (in a cleverly constructed piece of corporate tax avoidance) Smucker’s became one of the corporate Big Four coffee companies. Even prior to their recent acquisition of Café Bustelo, Café Pilon, and other brands from Rowland Coffee Roasters, coffee made up 44% of Smucker’s product sales.

P&G did not score high grades in corporate responsibility among its peers. So I have been waiting to find out if Smucker’s would be more transparent about coffee sourcing than P&G, and do more to promote sustainability in their coffee supply chain. Looks like I’ll have to keep waiting.

First CSR report – vague and lacking details

In 2010, large investors Trillium Asset Management and Calvert Investments put forth a shareholder proposal requesting that Smucker’s prepare a sustainability report. The previous year, Smucker’s sustainability reporting efforts amounted to a single page in their annual report, described later by Trillium and Calvert as “grossly inadequate.”

When Smucker’s pledged to begin substantive and meaningful annual sustainability reporting, the proposal was withdrawn. In the ensuing months, Trillium and Calvert met several times with Smucker’s. The company provided no details on what would be included in the promised first report, which was released in late July, and the company denied Trillium and Calvert’s request to review it prior to publication. When it was released, the CSR had only one page is devoted to green coffee sustainability. It says very little. Smucker’s describes their two areas of focus:

1. “We have set goals to substantially increase the purchase of certified green coffee over the next five years.”

They provide no specific goals, no timeline, no roadmap or strategy. The other members of the Big Four at least provide actual numbers, however modest they may be (see my posts on the latest from Kraft, Sara Lee, and Nestlé). Smucker’s coffees span nearly 75 varieties and flavors. A mere four are Fair Trade certified, with three (formerly five) of those also certified organic. In 2007, one was Rainforest Alliance certified, but that was discontinued. As of 2009, Smucker’s purchased the smallest amount of certified coffee — 0.05% of their 280,000 metric tons — of any of the major coffee companies.

2. “Our plan’s second area of focus supports Technoserve…” Smucker’s commits to five more years of support.

Most of the rest of the page describes the work Technoserve performs relating to coffee. These are not specific partnerships with Smucker’s, which is one of many donors to the organization. While technically true, it is misleading for them to say “Our coffee brands’ commitment to Technoserve began nearly 10 years ago.”  P&G was a donor, pledging $150,000 a year for ten years starting in 2002. Smucker’s has only donated the last two years, since they became owner of the P&G coffee brands, honoring P&G’s previous commitment.

For some perspective, their $150,000 (tax-deductible, I assume) annual donation is less than 0.03% of Smucker’s profit from their U.S. Retail Coffee segment alone.  Presumably, their continuation for the next five years will be at or near the same level.

Board fights 2011 Shareholder Proposal for coffee sustainability report

It’s time to wake up to the need for sustainability in your supply chain.

Based on their unsatisfactory discussions with Smucker’s, Trillium and Calvert anticipated that the CSR might not meet expectations. When it was evident the CSR would probably not be released prior to the deadline for filing proposals for the 2011 annual meeting, Trillium and Calvert filed another shareholder proposal in March.

This request was more specific. It pointed out that coffee represents a large percentage of Smucker’s profits (48%) and net sales (40%). The request emphasized the risk of climate change to the coffee supply chain. This was entirely appropriate. Last year the U.S. Securities and Exchange Commission (SEC) issued a guidance document outlining instances when corporations may be required, under existing rules, to disclose to investors business risks to due to climate change.

The entire text is of the proposal here. The bottom line was that

“…within six months of the 2011 annual meeting, the Board of Directors provide a report to shareholders … describing how the company will manage the social and environmental risks and opportunities connected to the company’s coffee business and supply chain. We recommend the Board include in the report a concise discussion of how it will address temperature changes, changes in rainfall patterns, and the company’s responsibility for its impact on the coffee farming families in its supply chain.”

Upon receipt of this proposal, the Smucker’s board petitioned the SEC to allow them to exclude the proposal from the proxy materials, in part because a CSR would be forthcoming. The SEC denied their request, stating “it does not appear that Smucker’s  public disclosures compare favorably with the guidelines of  the proposal.”

In their letter to shareholders, the Smucker’s Board unanimously recommended that shareholders vote against this proposal, stating that they felt the forthcoming CSR was adequate. In contrast, Trillium and Calvert’s letter to shareholders (PDF), recommending a “yes” vote, called the CSR “a significant disappointment.”

Results of the voting on the sustainability proposal

At the annual meeting on August 17, roughly 20% of shareholders voted in favor of the proposal. Combined with the 13% abstaining, a third of Smucker’s shareholders did not agree with the company position. This is actually a strong showing for a first-time environmental proxy issue. Given that the CSR was published less than three weeks prior to the meeting, many shareholders probably did not even get a chance to read and digest it.

Shareholder proposals are not legally binding, but used to send a message to corporate boards that their investors want change.

Maybe the younger generation of the Smucker’s family will adopt a more modern view of sustainability efforts, and the vintage outlook can be shelved.

What’s next?

Smucker’s is a company that manufactures and markets agricultural-based products. Coffee makes up a huge portion of their business. Should their coffee division continue to grow at the rate of the last few years (in 2011, coffee profit increased 11% over 2010), aided by the Rowland brands, Smucker’s could find itself primarily a coffee company. Their supply chain is clearly vulnerable to the impacts of climate change. Further, since companies are required to disclose information that influence investment decisions, and the SEC has indicated climate change is a risk factor that must be considered, Smucker’s may eventually need to get off the dime.

As noted, Smucker’s main competitors, Kraft, Nestlé, and Sara Lee, each have well-defined, very public sustainability initiatives (however miserly they may be relative to the size of their overall businesses). Smucker’s lags far behind them, and that is really saying something. Perhaps the only good news is that they have nowhere to go but up.

To take a look at the report and financials yourself, download these PDF documents, which should also be linked at their web site:

  • J. M. Smucker Co. 2011 Annual Report (see page 50 for coffee sales, pages 24-25 for profits, page 50 for product sales)
  • J. M. Smucker Co. 2011 Corporate Sustainability Report (see page 18 for coffee)

Sips: Latest corporate coffee news

By

On May 23, 2011

In Coffee news and miscellany, Corporate coffee

Some tidbits from the big four:

  • J.M. Smucker Completes Acquisition of Rowland Coffee. Smucker will now own Cafè Bustelo and Cafè Pilon as well as Folgers. Yippee.

    Love the old school can.

  • Sara Lee in talks for Brazil coffee brand. Sara Lee aiming to acquire or merge with Marata. Sara Lee already controls 22% of Brazil’s retail coffee market, and purchased Brazil’s Cafè Damasco last year.
  • How Kraft sells sustainability. Marc Gunther is a fellow member of the Society of Environmental Journalists, and has written a piece on how Kraft is trying to find ways that sustainability can drive growth. The company has determined that over 60% of its environmental impact comes from its supply chain, from the growing of agricultural products, including coffee. Gunther gleans the thoughts of Kraft’s VP of global sustainability (wait for it…) Steve Yucknut. This comes as Kraft announces that they are increasing their sustainability goals for the next few years. These goals include sourcing 100% of European coffee brands sustainably. The latter article again mentioned the 50,000 tons of Rainforest Alliance coffee Kraft purchased in 2010, which I will again remind you represents less than 7% of their total coffee purchases. They have a long way to go.
  • In an effort not to leave out the last, and largest, of the big four corporate coffee roasters, I took a look at Nestlè USA’s 2010 corporate responsibility report. Coffee was not mentioned. I did dig up a a piece on the reduction of the carbon footprint of Nescafè single-serve machines. You can just talk amongst yourselves on this one.

After the Harvest

By

On May 15, 2011

In Coffee news and miscellany, Corporate coffee

When discussing the problems associated with commodity coffee, and why you need to pay a little more to make sure people and the environment are protected, I’ve actually had people tell me they have a “right” to cheap coffee. I often hear that certified coffees are too hard to find, and people tell me they’d buy sustainable coffee if only it were at the grocery store.

At least you have access to a grocery store.

There is no such thing as “cheap” coffee.

Please visit the After the Harvest web site to learn more about the large percentage of coffee farmers than do not have enough to eat for a portion of the year, and the organizations that are working on food security in the coffee lands.

Sara Lee, Kraft: more baby steps

By

On February 25, 2011

In Corporate coffee, Jacobs Douwe Egberts/KraftHeinz

Sara Lee and Kraft both announce increases in purchase of certified coffees: what does this mean?

Sara Lee
Sara Lee (Senseo, Java Coast, Douwe Egberts, etc.) recently announced a five-year goal of tripling the amount of Utz Certified coffee it purchases. I love how this was spun: that in the past five years, Sara Lee had purchased 110 million kilos of Utz Certified coffee. That sounds like a huge amount, but 110 million kilos is 110,000 metric tons over five years. This is a little over 20,000 tons per year of the 450,000 tons that they purchase annually — less than 5% of their purchases. Indeed, this is right in line with what we learned in my previous post Certified coffee: current market share, part 2.

The article goes on to say that Sara Lee is “committed to more than triple that amount in the next five years and purchase at least 350 million kilos across all its markets and product segments.” My emphasis added.  All product segments, as the piece goes on to say, includes tea (e.g., Pickwick and Hornimans brands in Europe). Sara Lee purchased 2000 tons of Utz Certified tea in 2010, so a tripling of that amount has to be factored in to get to their goal of 350 million kilos. If met, this goal means that in 2015, certified coffee will still only be 15 to 20% of their total coffee purchases. And Utz currently does not have significant environmental standards.

Sara Lee also just revealed that due to rising coffee prices, it will be reformulating some of its coffee blends to include more cheap robusta beans. You know — the ones typically grown as sun coffee.

Kraft
Kraft (Yuban, Maxwell House, General Foods International Coffee, Gevalia, Kenco, Maxim, Tassimo, Nabob, and Sanka) has reported that they increased the amount of Rainforest Alliance certified coffee they purchased to 110 million pounds in 2010. If we drag out the calculator again (and round up for the sake of simplicity) we see that is 50,000 metric tons…out of the 740,000 tons they purchase each year, or less than 7% of their total purchases.

Coffee image by bitzcelt under a Creative Commons license.

Page 2 of 5

Previous

Next

Powered by WordPress & Theme by Anders Norén