Corporate coffee

Corporate coffee / Nestlé/Nespresso

Nestlé’s “no more deforestation” claim

In response to a Greenpeace campaign, mega-giant food conglomerate Nestlé has reportedly pledged to rid its products of deforestation. A closer read of Nestlé’s own press releases reveals apparently narrower goals, and there is no mention of eliminating deforestation in its coffee supply chain. In fact, other recent Nestlé coffee initiatives point to increased deforestation.

Nestlé responds to public pressure

Originally, the Greenpeace campaign demanded Nestlé quit sourcing palm oil for its products from companies that engaged in (sometimes illegal) deforestation in Indonesia. Public pressure was so intense that Nestlé not only suspended purchasing palm oil from a supplier with a particularly egregious record, the chairman called for a moratorium on deforestation, a few months later announced a partnership with the non-profit The Forest Trust (TFT), and “committed to ensuring that its products do not have a deforestation footprint.”

Reports of corporate responsibility may be premature

That sounds great, but don’t expect substantive action anytime soon. Nestlé is initially only working toward identifying bad players in its palm oil supply chain. Their goal is to source all their palm oil from “sustainable” sources by 2015. Unhappily, palm oil certification schemes have been marred by fraud allegations; the criteria, even if followed, contain loopholes; and some organizations contend that palm oil monocultures are simply inherently unsustainable.

Nestlé talks a lot about adherence to their Supplier Code. This lightweight document contains a single paragraph on sustainability (“supporting” and “encouraging”, but not requiring, sustainable practices) and one paragraph on the environment (in its entirety: “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.”).

By the way, Nestlé declared that the biofuel industry is really responsible for forest destruction. This is a favorite tactic of misbehavers: pointing out that there are worse offenders, as if we must focus attention on causative agents only in rank order. Liver cancer causes fewer deaths than lung cancer, but we look for cures for both simultaneously.

Nestlé’s coffee plans: 220 million trees

Coffee has not been mentioned in any of these discussions. Nestlé buys upwards of 907,000 tons of green coffee annually, fueling the largest market share of packaged coffee in the world. In August (after all the anti-deforestation hoopla), Nestlé announced it was investing US$487 million in its global coffee supply chain. This follows their big robusta expansion push in Mexico that I wrote about in May.

A centerpiece of the current plan is the global distribution of 220 million high-yield coffee plants over the next 10 years. The plants will be free, and the farmers will not be obligated to sell to Nestlé. In other words, the farmers are taking on all the risk of increasing their commitment to coffee, without any guarantees it will be purchased.

Where and how will all this coffee be grown? High-yield coffee varieties are invariably planted in full sun. The push by multinational corporations for farmers to replace their shade coffee systems with higher-yielding, chemical-dependent hybrids was how this whole sun versus shade coffee dilemma was born! Much of the Nestlé coffee will be robusta, used in instant coffee such as the company’s Nescafé brand. Robusta coffee is also grown in the sun. I don’t see how this will not contribute to deforestation.

Another part of the plan includes increasing the amount of coffee purchased directly from farmers to 180,000 tons over the next five years. Direct buying, rather than purchasing from middlemen, should, theoretically, cut down on instances of the company buying coffee from habitat-destroying and illegal sources. In early 2007, the World Wildlife Fund revealed that Nestlé was among the buyers of robusta coffee illegally grown in a Sumatran national park. Their excuse was that they had no way of knowing where their coffee came from when it went through several buyers.

Nestlé’s direct buying goal, if met, will only cover about 23% of its total purchases. In their publication “Faces of Coffee” (pdf), when their direct purchases were at 14%, Nestlé noted,

“…it is unrealistic to believe that [direct buying] could be applied to a significantly larger portion of a roaster’s purchases…”

Let’s conclude, then, that the majority of Nestlé’s coffee purchases will continue to come from possibly-dubious or at least difficult-to-trace sources.

A small portion of suppliers to meet very minimal standards

Nestlé also aims to bring all of the farms that directly supply the Nescafé factories (not all of their direct-sourced coffee) up to the 4C Association sustainability baseline code by 2015.

This is not a certification; the 4C Code of Conduct outlines baseline requirements for coffee production. Only the most atrocious practices (such as bonded and forced labor) are considered unacceptable. The Code itself is made up of 28 principals, each having three statements categorized like traffic lights (red, yellow, and green) indicating “desired performance.”

The 4C system is considered inclusive.  Thus, coffee may be marketed as 4C compliant even if there are “red” practices (“must be discontinued”) so long as there is an equal number of “green” (“desirable”) practices in the same category (equaling a “yellow” average), at least for some unspecified period of time. So, for instance, a producer can kill endangered species and use the “most hazardous” pesticides so long as soil and water conservation plans are in place.

The 4C code is the lowest rung of the ladder for coffee production. I know we all have to start somewhere, but frankly, I am appalled that any of Nestlé’s coffee suppliers don’t meet these most basic standards of human and environmental decency.

A final aspect of Nestlé’s coffee initiative is to purchase 90,000 tons of Nescafé coffee sourced according to the “Rainforest Alliance and Sustainable Agriculture Network (SAN) principles” by 2020. Remember the math that 90,000 tons of all of their coffee would be about 11% of total purchases. Since this goal only applies to beans for Nescafé, it is an even smaller percentage of the company’s total purchases.

Also, note that this coffee will not be Rainforest Alliance certified, it will only conform to SAN principles. These ten principals simply form the basic framework of the certification criteria. So, for example, the Ecosystem Conservation principal states “Farmers should promote ecosystem conservation and recovery.” Without specific standards and criteria, evaluation of compliance with this or any principal is wide open for interpretation, and therefore lacks real meaning for consumers.

Keep Pushing

Considering the evidence, lauding Nestlé’s conversion to genuinely sustainable practices looks premature.

Certainly, it is a positive move that Nestlé is working with The Forest Trust (TFT), which focuses on products and their responsible supply chains. But it’s not a certification. According to this interview, TFT performs gap analyses on supply chains, identifies where they do not meet sourcing guidelines, and helps create action plans. This sounds like a potentially drawn-out process that allows Nestlé to kick true sustainability down the road.

As for coffee, TFT does not have experience or expertise working with coffee supply chains. Therefore, it’s important that Nestlé is working with Rainforest Alliance. RA’s own press release reiterates that Nescafé will not be using the Rainforest Alliance seal. I think RA is being overly optimistic in saying that this initiative will result in Nestlé “increas[ing] its supply of coffee beans without clearing rainforest.”

That sentence does, however, speak to the true goal: increasing supply. Robusta prices hit amazing highs in 2008 (probably when this plan was hatched) and prices are again climbing. Arabica futures are now at a 13-year high.  Any time coffee prices are high, coffee farmers tend to plant more coffee. In 3 to 5 years when the plants begin to produce, the glut of coffee causes prices to plummet. Nestlé is only adding to this problem by handing out tens of thousands of high-yield coffee plants. Nestlé is looking not for a sustainable coffee supply, but a sustained coffee supply.

The public must keep up the pressure on Nestlé and other similar companies to make meaningful, verifiable, prompt changes in their coffee supply chain to ensure authentic ecological and economic sustainability for all players. Until then, we shouldn’t be drinking a single one of the 4600 cups of Nescafé that the company claims are consumed every second worldwide. I’ve just learned this is International Nestlé-Free Week, so it’s a good time to start.

 

Corporate coffee / Nestlé/Nespresso

Nestlè strikes again

The Mexican government and the multinational food conglomerate Nestlè have partnered to increase the production of robusta coffee in nine of Mexico’s states. The majority of  coffee grown in Mexico is arabica. Robusta is grown by about 19,000 families on 34,000 hectares of land in the states of Chiapas, Oaxaca, Puebla, and Veracruz. Current estimates are that Mexico produces 150,000 to 240,000 60-kg bags of robusta annually, roughly 5% of total coffee production in the country.

The plan is to increase robusta production to 500,000 bags by 2012, with 2000 hectares being planted with new robusta trees this year*. Nestlè is supplying the high-yield stock, and ultimately the output will go to supply their Nescafè soluble coffee plant in Toluca, outside of Mexico City. Nestlè plans to increase the capacity of this plant by 40%, which will make it the largest instant coffee production facility in the world. Currently, 450,000 bags of coffee are imported into Mexico to fuel the instant coffee beast.

Many of Mexico’s coffee farmers are not happy about this plan, concurring with a 2006 FAO recommendation that robusta production in the country not be increased due to concerns about oversupply and farmer income. Let me add my environmental concerns to the mix.

Unlike arabica coffee, which can (and is, in much of Mexico) grown as an agroforestry crop under mixed shade, robusta is grown in the sun and will require the clearing of valuable lowland forests, no doubt substantial amounts of fertilizer and pesticides, and cause collateral environmental damage.

Deforestation is already a problem in Mexico; between 1990 and 2005, the country lost nearly 7.5% of its forests and woodlands. The problem is especially severe in the state of Veracruz with a loss of 22% of forested lands between 1993-2000.

Ironically, this will also impact arabica production in the highlands. At least one study [1] has shown that deforestation of tropical lowland areas reduces the moisture of the air flowing up adjacent mountains. This decreases montane humidity and increases the elevation of the cloud deck, altering the highland forested areas where arabica coffee is grown (not to mention impacting all the other biodiversity associated with these habitat changes). Simulations indicate that “…inland cloud forests like those of southern Mexico may be profoundly influenced by regional deforestation.”

Perhaps Mexico needs to rethink this strategy. The biggest beneficiary will be Nestlè’s profits. Although some farmers may see short-term gains, in the long run deforestation contributes to climate change, food insecurity, and loss of biodiversity. That’s a big price to pay for more cheap unsustainable instant coffee.

*It will require 9400 to 79,000 ha to produce a half million bags, with the low figure representing the production of some of Nestle’s highest yielding varieties, based on yields in the Philipines.

[1] Lawton, R. O., U. S. Nair, R. A. Pielke, Sr., and R. M. Welch. 2001. Climatic impact of tropical lowland deforestation on nearby montane cloud forests. Science 294:584-587.

Instant coffee photo by mat300 under a Creative Commons License.

Coffee regions / Corporate coffee

Coffee growing in China

When you hear “China” and “coffee” mentioned in the same sentence, it is usually regarding the booming coffee market in the traditionally tea-drinking country. Less well-known is the fact that coffee is actually grown in China. It is predominantly low-quality arabica used in instant coffee, grown in full sun using high chemical inputs, and the Chinese government is aggressively promoting the expansion of thousands of hectares of coffee production.

Background
While some robusta coffee is grown in China, in Fujian province and on Hainan Island, this post will focus on arabica coffee grown in Yunnan province.

Coffee has been grown in Yunnan since the late 1800s, but on a relatively small scale. There was a resurgence in the late 1960s, but today’s Chinese coffee revival was orchestrated in the 1980s by the Chinese government, the United Nations, and at least one large multinational roaster. Very high import tariffs combined with millions of potential new coffee consuming customers has prompted roasters to source coffee from within the country.

How coffee is grown in China
Coffee is grown in Yunnan in several regions: Dehong, BaoShan, Simao, and Ruili, mostly in western Yunnan along the border with Myanmar. Elevation ranges from 900 to 1600 meters, generally around 1100 to 1200 m. Coffee farms range from small producers and large state-run or privately-owned plantations of over 2000 ha.

All the photographs I have seen of coffee growing in China has been sun coffee. Here is a photo of the 1200 ha ManLao River Plantation in the Simao region.

Organic coffee production in China is virtually unknown. China seriously over-uses fertilizers, with coffee being one recipient. A recent paper looking at different fertilization regimes for coffee in Yunnan province [1] concluded that “higher than routinely applied levels of fertilization are required to optimize coffee plants photosynthetic acclimation and growth” — and photosynthetic acclimation, the paper explains, means the ability to withstand full sun.

High fertilizer inputs are not the only problem. While I was able to find no data relating  specifically to coffee, China is the world’s largest user and producer (and exporter) of pesticides, used once again to increase yield, at a huge cost to the environment and human health.

Expansion, deforestation, and biodiversity
Whereas China only produced about 3600 tons of coffee in 1997, in 2009 this figure breached 28,000 tons on 2000 ha. In China’s usual grand form, the plan is to increase the coffee production area to 16,000 ha in the next 15 years. China is already suffering from severe deforestation, and it is a serious problem in Yunnan province. A paper discussing conservation there noted, “The most immediate source of wealth in Yunnan is the rapid liquidation of existing natural resources, particularly forests” [2].

The Yunnan Hogood (or Hogu) Coffee Company, for instance, planted nearly 4500 ha as of 2007, and this company alone plans to have over 13,000 ha in production by 2012. They are to begin exporting coffee to the U.S. this year. They have contracted with 30,000 farmers, and while a government web site (now defunct) stated that Yunnan Hogood is making these farmers rich, their per capita annual income is $454. This may very well be an improvement over previous incomes (Yunnan is one of China’s poorest areas), but it is still under the poverty level for China. Nestlé also touts that their investment in technical assistance to farmers and their purchases provide steady income to local farmers. This is probably true, but if farmers were being helped to produce high-quality specialty coffee, their incomes would be much greater.

All this land conversion is taking place in one of the most biodiverse regions in China. Yunnan comprises only 4% of China’s total area, but has more than 18,000 plant species and 1836 vertebrates (over 800 are birds); 112 of China’s bird species only occur in Yunnan [3]. The Yunnan mountains are designated as an important endemic bird area by BirdLife International, where they state that “loss of forest land here appears to be by far the worst in China.” One of the restricted range birds found here is the near-threatened Yunnan Nuthatch, shown on the stamp, another is the endemic White-spectacled Laughingthrush. More fabulous birds of Yunnan can be seen on the great photoblog of John and Jemi Holmes.

Specialty coffee

China’s arabica coffee is nearly all the catimor variety, which has some resistance to coffee rust due to the robusta genes in its background; it is generally considered low-quality and not specialty grade. Some older varieties do exist but are often plagued by rust and not being promoted.

A few specialty coffee roasters have a presence in China, despite the challenge of finding high-quality coffee and faced with consumers who overwhelmingly drink instant coffee (see below). Starbucks has over 700 stores in the country, and sources its coffee from producers in Baoshan*. The South of the Clouds blend includes Chinese-grown coffee and has been offered in cafes in China. That debut came with a remark from a Starbucks spokesman that the company would “ultimately” like to export Chinese coffee worldwide. However, supply currently isn’t high (or good?) enough to even put together a Chinese single origin offering (the South of the Clouds blend contains beans from other countries), and export is dependent on developing a source of “superpremium” arabica beans.

Other North American roasters with cafes in China include Coffee Bean & Tea Leaf and Canada’s Blenz Coffee. Roasters from other countries are there as well, all working to steer a tea-drinking culture towards fresh ground coffee.

The role of instant coffee and Nestlé

Nestlé is the big player in China, sourcing all of its Chinese-marketed Arabica coffee from within the country since 1997 and controlling nearly half the entire market share in the country. The coffee Nestlé produces and sells in China is instant coffee, which is typically the most palatable to consumers in tea-drinking nations and dominates Chinese consumption. Add in Kraft’s instant coffee, and these two companies represent 70% of the Chinese coffee market.

Nestlé has invested over $5 million in technical assistance to farmers in Yunnan province. They have sourced all their arabica beans from inside China since 1997 (probably blending with robusta), and in 2006 introduced 100% Yunnan coffee in their in-country NESCAFÉ instant coffee. Given Starbucks’ inability to source a single origin Chinese coffee, this could mean Nestlé has tied up a lot of producers, leases or owns their own plantations, or the beans they source are only suitable for instant. Many of the Chinese NESCAFÉ products aren’t just coffee, but pre-packaged coffee, sugar, and creamer, which are very popular in China. You don’t need good quality coffee for these beverages!  For more on the lack of sustainability and quality in instant coffee, see my previous post.

Coffee crisis, round 2?
One need only look next door to Vietnam to see what a no-holds-barred coffee production policy can do to world coffee prices and farmer livelihoods worldwide and the environment. Unfortunately, nearly all the same elements that precipitated the catastrophic coffee crisis of the late 1990s are once again in place: world development agencies and a national government encouraging and subsidizing the planting of huge amounts of coffee which could lead to a glut in supply, large multinational roasters eager to have a source of cheap mediocre coffee, and poor rural minority farmers hoping to get rich. As we have learned, a drop in world coffee prices due to oversupply from Asia means people and habitats suffer all over the world.

Let’s hope history doesn’t repeat itself.

*In late 2025, Starbucks divested itself of the majority of its stake in China. See these two stories by Reuters.

[1] Cai, C.-T., Z.-Q. Cai, T.-Q. Yao, and X. Qi. 2007. Vegetative growth and photosynthesis in coffee plants under different watering and fertilization managements in Yunnan, SW China. Photosynthetica 45:455-461.

[2] Lan, D. and R. Dunbar. 2000. Bird and mammal conservation in Gaoligongshan Region and Jingdong County, Yunnan, China: patterns of species richness and nature reserves. Oryx 34:275-286.

[3] Yang, Y., K. Tian, J. Hao, S. Pei, and Y. Yank. 2004. Biodiversity and biodiversity conservation in Yunnan, China. Biodiversity and Conservation 13:813-826.

Coffee news and miscellany / Coffee-related products / Corporate coffee

Sustainable instant coffee

I’ve been asked more than once about a source of sustainably-grown instant coffee. My usual reply is that there isn’t one. Understanding how instant coffee is manufactured will illustrate why the majority of the coffee beans that are used to make it are low-quality commodity coffee, and thus not a good option for consumers looking for coffee grown in an environmentally-friendly manner.

How instant coffee is made
Green coffee is brought to large manufacturing plants, often in the country of origin. Colombia, Brazil, and Mexico are the largest producers of instant coffee. At the factory, the coffee is roasted in large batches and ground. It then goes through multiple extractions using hot water under pressure. The resulting liquid is filtered and concentrated. Finally, the concentrated extract is dehydrated by either spray drying or freeze drying. Spray drying, in which the extract is spewed into an enormous tower and blasted by hot air, produces a fine powder. This powder must be “agglomerated” (other materials added to create familiar-looking granules that flow and dissolve more freely). Freeze drying creates clumps that resemble ground coffee, but the process is more expensive.

These production processes rob the coffee of most of the aroma. This is reintroduced by various combinations of natural or synthetic compounds, typically mixed with some type of oil, which are put back on the coffee particles prior to packaging in a process known as “replating.”

Why low-quality beans are used
The final goal of a specialty coffee roaster is great taste in the cup. To that end, they want carefully grown beans, processed properly at the mill, expertly roasted to bring out the best nuances of that particular bean.

The final goal of instant coffee is convenience. All the technology is aimed at leaching out all the water-soluble compounds to produce a product that looks and feels like coffee, but is quick and convenient to prepare.

This is the primary reason that low-quality beans are used for instant coffee: higher-quality beans with good flavor profiles would be used for the roast-and-ground market. Another way low-quality beans end up in instant coffee is because most countries don’t allow their lowest quality beans to be exported. Since instant coffee is often produced in the country of origin, it can be the final resting place of non-exportable beans.

Finally, instant coffees from the big corporate roasters such Nescafè’s Taster’s Choice (Nestlè), Maxwell House (Kraft), and Folgers (Smuckers) all contain robusta beans. Robusta is the lower-growing species of coffee (Coffea canephora) that is grown in large full-sun plantations. In some markets, some of these brands are 100% robusta (spray-dried instants are more likely to be all-robusta). In addition to the negative environmental impact of robusta plantations, these beans are considered inferior quality. To make robusta palatable, it generally must be steamed or treated in some way.

The big roasters not only use robusta, they will use very low-quality robusta. This article from Nestlè (a downloaded copy, since removed from their site)– incredibly boasting about quality — notes that they buy “coffee beans having eight percent to 16 percent triage.” Triage coffee, for the unsuspecting, is all the moldy beans, broken beans, sticks, stones, insect-damaged or rotten beans…all the stuff that is rejected or sorted out at the mill! [1].

The world’s largest producer of robusta is Vietnam, where it has been noted, “Wherever coffee was grown, forests have disappeared.” Brazil also grows a lot of robusta, but the variety grown there, called Conillon, is higher-priced than African- or Asian-sourced robusta. Côte d’Ivoire (Ivory Coast) is another major exporter. Côte d’Ivoire is the most biodiverse nation in west Africa, but has suffered severe deforestation and fragmentation, in part due to mass plantings of coffee and cacao in the late 1980s. Because of the time lag between environmental destruction and biodiversity loss (known as “extinction debt”), it has been projected that Côte d’Ivoire may still lose a third of its primate species.

In addition to being cheap, an additional motivation for manufacturers to use robusta is that it has a higher extraction rate than arabica. The rule of thumb is that it takes 2.6 kg of green beans to produce 1 kg of instant coffee. Manufacturers get a higher proportion of soluble materials out of robusta.

The authors of The Coffee Book: Anatomy of an Industry from Crop to the Last Drop put instant coffee in historical context:

“If in retrospect the coffee industry appeared to be out of its collective mind in pursuing the race for low quality, it is worth remembering that this blind love affair with consistency and technology was part of a larger cultural embrace of a mass-market modernism … Instant coffee was created by the same technophila that later produced technified cultivation systems.”

My mantra is generally that when it comes to the environment or farmers’ livelihoods, there is no such thing as “cheap” coffee. In the case of instant coffee, the cost of convenience and low consumer prices nearly always includes habitat loss and crappy proceeds to farmers.

One exception may be the new Starbucks VIA Ready Brew.  The majority of Starbucks beans are sourced under their C.A.F.E. Practices supplier guidelines (with a 100% goal by 2015), which use 24 criteria based on over 200 social and environmental indicators. I’ve received no confirmation so far that the beans used in VIA are part of this program.

[1] For a couple of discussions on how the use of this extremely poor quality coffee drags down the entire coffee industry, see this statement to Congress by the former SCAA director (scroll down halfway) and the post and comments on this blog post by Sweet Maria’s Tom Owen.

Photo from iStockphoto.