By Thomas
Mulier
July 15,
2013
Nespresso,
the biggest maker of single-serve coffee, will introduce its sustainability
program to Africa
as it forms a board with the heads of Fairtrade International and Rainforest
Alliance plus actor George Clooney.
The
Nestle SA (NESN) division plans to start the program in
Ethiopia and Kenya as well as try to help reestablish a coffee industry in
South Sudan, Nespresso said in a statement today.
“We
always need more coffee,” especially sustainable coffee, Nespresso Chief
Executive Officer Jean-Marc Duvoisin said at a press conference in Lausanne,
Switzerland.
Nestle
is highlighting Nespresso’s environmental and labor standards of production as
competition in single-serve coffee intensifies. Rival capsules that work in
Nespresso machines probably squeezed the brand’s first-quarter sales
growth to 8 percent, the slowest pace in its history, Jon Cox, an analyst
at Kepler Cheuvreux in Zurich, has estimated.
“This
is a great, big company working very hard to help people at the bottom,”
Clooney, who already appears in Nespresso advertisements, said at the press
conference. “It’s smart business.”
Nespresso
has surpassed an objective of obtaining 80 percent of its coffee through the
company’s AAA sustainability program, which started 10 years ago, Duvoisin
said. Nespresso buys coffee from 56,000 farmers under the program and pays them
a 30 percent to 40 percent premium to New York market
prices. Colombia, Costa Rica, Guatemala, India and Mexico are among countries where farmers take part in the AAA
projects, according to Nespresso’s website.
“They
benefit and we benefit,” Duvoisin said, adding that Nespresso relies on access
to the top 1 percent to 2 percent of the best quality coffee.
Nespresso
will introduce capsules with African blends next year, and it may help produce
rare Sudanese varieties, Duvoisin said. The company isn’t raising prices to consumers,
he said.
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To contact the
reporter on this story: Thomas Mulier in Lausanne via tmulier@bloomberg.net
To contact the editor
responsible for this story: David Risser at drisser@bloomberg.net