Corporate coffee

Corporate coffee / McDonald's

McDonald’s promotes coffee sustainability efforts

McD-RA-promoMcDonald’s is launching a campaign aimed to educate the public about their efforts in sourcing coffee sustainably, which I wrote about in March. To recap, the corporation’s North American operations is investing over $6 million to provide education and training to more than 13,000 Guatemalan coffee farmers to increase their capacity for sustainable coffee production.

As I noted in the previous post, the investment in technical assistance to farmers builds on the commitment to purchase increasing amounts of certified coffee, primarily from farms certified by Rainforest Alliance. Currently, all coffee at McDonald’s locations in the U.K., Australia, and New Zealand, and all coffee for espresso-based drinks in the U.S. and Canada, is sourced from Rainforest Alliance-certified farms. All coffee, except for decaf, in Europe is also Rainforest Alliance, Fair Trade, or UTZ certified. In 2011, certified purchases amounted to about 10,400 metric tons. In 2012, 25% of their global coffee purchases were certified; in the U.S. the figure was 14.8% (actual volume figures are not available).

While $6 million is not much money for a multi-billion corporation, keep in mind that coffee is not McDonald’s primary business, and that they only really entered the premium coffee market segment in 2006. They do not source coffee directly, but rely on a suite of suppliers. And, as previously pointed out, even the small amount of certified coffee McDonald’s purchased for North American (around 3800 tons) was more than coffee giants JM Smuckers (1500 tons) and Nestlé’s (2000 tons) total certified global purchases combined! And McDonald’s 14.8% certified U.S. purchases also dwarf Smucker’s 0.5% (and Smucker’s goal is only 10% by 2016). Whereas Smuckers has been dragged reluctantly into modest sustainability efforts, and Nestlé has rejected third-party certifications, McDonald’s has chosen to go with Rainforest Alliance, Fair Trade, and  UTZ Certified because they felt the certification criteria of those organizations were best aligned with the company’s vision.

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Although millions of Americans guzzle coffee every day, not very many are aware of where the daily fix comes from, how it is grown, and the issues that impact coffee farmers and the environment (hence this blog!). McDonald’s wants to familiarize with the public with these issues and how specifically the company is approaching enhancing sustainability in their coffee supply chain. Their connection with Rainforest Alliance will be featured in their ads, in stores, and other promotional assets. Many people that are “into” coffee and drink specialty coffee know about coffee certifications and Rainforest Alliance. I’d venture an educated guess that most people who usually get their coffee away from home at fast-food restaurants have no notion about certifications or coffee sustainability. The ubiquity, popularity, and marketing power of McDonald’s can go a very long way in introducing these issues to the general public.

The next step is increasing the amount of certified coffee they purchase for drip coffee in North America; I hope the majority will be Rainforest Alliance.  McDonald’s has brought their suppliers (S&D Coffee & Tea, Gavina Gourmet Coffee, Farmer Brothers, and Mother Parkers) to the table to address this goal and provide the company with a sequenced plan. These are four of the largest coffee suppliers in North America — providing well over 100,000 tons of coffee annually for foodservice, private label, convenience stores, and their own brands. Currently S&D, the largest of the four, has the best sustainable-coffee commitment, offering a number of certified coffees, including their own line of Bird-Friendly certified coffee [NOTE: S&D was purchased by another company in 2020]. Farmer Brothers has just released its first, baseline sustainability report, where it states it now buys 9% “sustainable” coffee (which amounts to about 3500 tons). Gavina and Mother Parkers don’t provide much detail on similar offerings. This presents a golden opportunity for the Golden Arches. The ability of McDonald’s to influence the purchasing of their suppliers means this initiative has great potential to increase demand for certified, sustainably-grown coffees. Perhaps most importantly, I think that a significant increase in the volume of coffee destined for drip in North America, combined with the visibility and marketing power of McDonald’s, has the potential to really propel coffee sustainability issues into the mainstream.

You can see more at the coffee sustainability section of their website. More detail is promised in McDonald’s next corporate sustainability report, due out next spring. I’ll be reporting on it.

Corporate coffee / McDonald's / Rainforest Alliance

McDonald’s makes substantial commitment to coffee sustainability

mccafeMcDonald’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.

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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.

Certifications / Corporate coffee / Nestlé/Nespresso

Nestlé: Saying no to coffee certifications

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 specifically 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.

Corporate coffee

Massimo Zanetti coffees

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

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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.