creating shared value at nestlé equatorial africa 3rd ... · kenya dairy project • nestlé...
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Creating Shared Value at Nestlé Equatorial Africa 3rd African Coffee Sustainability Forum February 13 2013
The CSV Concept at Nestlé
Nestlé Chairman and CEO, 2010:
"For a company to be successful over time and create value for shareholders, it must also create value for society."
Nestlé has analyzed its value chain and determined that the areas of greatest potential for joint value optimization with society are nutrition, water, and rural development.
As a result, these three issues have become the core pillars of Nestlé's CSV Strategy.
Kenya Dairy Project
• Nestlé joined Heifer International in 2009 as one of their partners to transform farming families in Kenya into viable commercial dairy farmers.
• Hub model with a central Chilling Plant
• Focus on one geographical area– Kabiyet
• Full-time dairy manager based in Kabiyet, servicing a community of 6000+ dairy farmers
• To establish a procurement strategy for milk powder in Kenya.
• To create more dairy model communities in Kenya, positively impacting an additional 20,000 farmers and their livelihoods
• To engage in community development programs: Biogas; Women Empowerment; Water
• Nestlé Zimbabwe is committed to reviving the dairy sector in the country
• National milk production in Zimbabwe has declined from 260 million litres per year in 1992 to 50 million litres in 2011 with over 200 000 dairy herd compared to today’s herd of less than 40 000 cows.
• Two projects: One Supplier Development
Program & One Community Development Program
• A 10-year project to fund the distribution of 4000 cows to local approved farmers, with training programmes in collaboration with local institutions
National Dairy Development Scheme - Zimbabwe
In an effort to contribute to the reduction of micro-nutrient deficiencies in Madagascar, Nestlé has partnered with several Institutions to breed bio-fortified rice (Zinc and Iron) varieties on a pilot basis
Rice Project – Madagascar
Baseline survey on micronutrient deficiencies has been commissioned by the Institute of Public Health An agronomist has been recruited. The project is also being done in collaboration with our R&D centre in Abidjan & Africa Rice. Seedlings have been planted awaiting first harvest
Next steps will be the identification of farmers and the demo plots, as well as training in collaboration with the Ministry of Agriculture
• Nestlé is working with the community on an entrepreneurship programme
• Nestlé has engaged with operators of small food outlets to sell beverages in open markets around Nairobi.
• These operators partner with independent sellers who, with the use of our kit, sell cups of freshly prepared Nescafé 3-in-1 in open markets.
• By the end of December 2012 50 vendors were recruited
• 65 cups on average sales/day and each seller makes about USD 200 profit per month
My Own Business – Kenya
• Donation of Kes 1 million for the construction of a dam to a local NGO servicing 10,000 beneficiaries in Eastern Kenya
• Provision of drinking water facilities to communities where we engage in rural development projects
• Partnership with International Conservation Caucus Foundation (ICCF) in management of natural resources
• Member of Water Resources Group in Tanzania
Water Projects
Five countries participating in our global school nutrition education programme:
• Mauritius: launched in in 2011 currently
evaluation of phase 1 complete • Zimbabwe: Physical education program Jan 2012
Nutrition education program May 2013 • Kenya: official launch June 2012 • Mozambique : official launch July 2012 • Congo: Launch of the programme in 2012
• 200,000+ children impacted
• Expansion of program in the same countries
• Launch in Angola, Zambia in 2013, impacting another 10,000 students
Nestlé Global Healthy Kids Program
#1 Coffee Brand
5500 cups / sec
12% of WW GC
From Farmers to Consumers
1938
Background
• The Nescafé Plan is a global initiative by Nestlé S.A. started in August 2010
• Company’s commitment to coffee farming, production and consumption to ensure Nestlé optimizes its coffee supply chain by improving their agricultural practices as demand for coffee grows in the region.
• Aimed at improving productivity, quality, increased production, ensure higher incomes for coffee farmers hence improving the living standards of the farmers community them to become leaders in the coffee sector.
1. 9 Farmer Cooperative Societies, 26 wet mills and over 26,000 farming households
2. It consists of assisting these farmers throughout the value chain (nursery, demo plots, training of best farming practices…..)
3. 3 year agreement with Coffee Management Services
4. Expected outcomes: -Improved productivity
-Grade 1.0 coffee procurement
-Improved living standards for farmers
-Sustainably produced and verified coffee -Women and youth aspect of the programme -4C Verified by end of year 2
The Nescafé Plan in Kenya
Globally, Nestlé will be investing CHF 350 million in support of The Nescafé Plan.
• Four year project with 13 wet mills and 13,000 small holder farmers with aim of improving quality and increasing quantity of coffee.
• Waste water treatment is a big issue, currently working on new systems in the wet mills
• Environmental friendly coffee bean pulping and washing equipment
• Farmers training to provide agronomical support. • All Farmer Trainers have been hired- over 50% of them are female. • Improved Infrastructure and living condition of farming communities.
Nescafé Plan in Ethiopia
Coffee SAIN Project
•Nestlé sponsored two scientists from the Tanzania Coffee Research Institute (TaCRI) and the Uganda Coffee Development Authority (UCDA) for a one-year scholarship to study somatic embryogenesis in Nestlé’s Research and Development centre in Tours, France. •Applying the SE technique will help Uganda and Tanzania to propagate improved Robusta and Arabica varieties respectively, more resistant to diseases and of better cup quality profile. •The plan aims at assisting the Ugandan and Tanzanian coffee farming communities achieve better quality beans within a lesser period of time to fruit, thus also allowing higher yearly overall crop output, with related revenue increase.
Why Sustainability and what does it mean?
What matters at farm level?
• Basic income to support the family – Can be improved • Issues for the coffee farmer in Africa:
-aged tree stock, ageing farmers, lack of husbandry and support -It is not just about price!!!!!!
• Price is important but stable income is more important for the long term
• Investment in GAP and PHT training, knowledge transfer, capacity building
• Having the right tools to do the work empowering the community to
collectively work together Buy in from national and local government entities.
Build in and on Existing Good Agricultural Practices
Social, Economic & Environmental Dimensions
Differentiating Element
• Sustainable –Yield
• Yield: good reliable Quality & Quantity
• Sustainable: Land Use (intercropping), Water, Pollutants & Climate aspects
• Why do coffee roasters ask for sustainably sourced coffees for their products?
Compliance, traceability, stakeholders-internal-external, NGO’s, consumers needs........
Credibility and accountability
Nescafé Brand equity and heritage
• By 2020 Global Green coffee demand is likely to be 160m bags the world needs another Vietnam, or 3 or 4 Colombia’s therefore we need to contribute to fill the supply gap.
Why Sustainability and what does it mean?
Why Sustainability and what does it mean?
What matters for the end user? And what are the challenges for producers
• Reliability-on production and quality sustainable yield
• Credibility-from reliable trade partners
• Accountability-responsible for ones actions
• Availability-right quality and on time
• Traceability-from farm to cup
• Access to and implementation of Good Agricultural Practices
• Access to fertilizers at affordable prices
• Access to soil and leaf analysis so soil receives the right nutrients at the right time
• Land rights
• Coffee is a generational commodity and it is about the people and price
Productivity/Quantity
• Trees renovation, renewal and proper pruning
• Optimal plantation density
• Effective use of inputs
Quality
• Improved coffee farming practices such as better shade and soil management.
• Improved harvesting, post harvesting practices & processing
Water Conservation/Management
• Reduce water utilization in washed coffees.
• Irrigate more with less water
Future considerations
Climate as it affects coffee-adaptation
• Programs to monitor changes in carbon and water footprints as the new practices are implemented.
• Practices to increase carbon sequestration in soils, shade trees and coffee bushes and help farmers adapt to climate change in their area
Good Agricultural Practices & Post Harvest Treatment
WHY: To fuel long term growth…
Make Coffee Farming economically more attractive
Produce more from less
Improve and increase Quality and Productivity = increased income and
improves livelihoods
