\u201cSo it is clear that coffee is a key ingredient for Nestle in this regard \u2014 we have coffee, we have dairy, we have cocoa, but coffee is a really big one, and makes up quite a substantial part of our business, and our insights come from contact with thousands of farmers across every origin region because we\u2019ve been in the coffee business for so many years.\u201d<\/p>\n
What specific strategy is Nestle implementing for coffee resilience?<\/p>\n
With so much at stake, a large part of Nestle\u2019s investment into improving coffee production has been focused on the coffee plants themselves, highlighting a focus on \u2018farm renovation\u2019 to ensure sustainable yields.<\/p>\n
\u201cThere are several ways farmers can renovate their coffee trees: i) Replacing old coffee trees with new ones; ii) Adding new coffee trees to increase tree density; or iii) Working with existing coffee trees and rejuvenate their productive tissue through grafting, pruning or stumping,\u201d Shaw said.<\/p>\n
\u201cYoung coffee trees take up to three years to produce a significant amount of coffee cherries. Therefore, renovating coffee farms requires careful planning to avoid an abrupt yield loss and reduced income for farmers.\u201d<\/p>\n
The concept of farm renovation lies in the knowledge that older coffee trees tend to naturally become less productive and more susceptible to the effects of climate change, which further reduces yield. <\/p>\n
This therefore calls for a \u2018renovation\u2019 of the farm, planting new coffee trees early enough so that coffee production yields remain stable, farmer incomes are not affected, and the prices of end-products like Nescafe don\u2019t face any sharp hikes.<\/p>\n
It is also important to note that the various coffee producing markets worldwide from Brazil to Vietnam to Ethiopia all have different environments and there is no one-size-fits-all coffee variant that can magically grow in every market, meaning that renovation also needs to be conducted on a situational basis.<\/p>\n
\u201cThe Nescaf\u00e9 Plan carefully selects the best available variety for each region, with the aim to maximise the benefits to the farmers and improve the resilience of their production,\u201d Shaw added.<\/p>\n
\u201cOver 20 million plantlets are distributed per year, and to date we have given out around 335 million coffee plantlets since 2010 in more than 10 countries.\u201d<\/p>\n
Keeping coffee trendy<\/p>\n
Beyond regenerative agriculture and farm renovation, a look from the other side of the supply chain shows that competition within the sector is intensifying, and every coffee brand needs to keep up with current trends and consumer demands to ensure that coffee\u2019s role in consumer\u2019s everyday diets habits is not shaken.<\/p>\n
A very clear example here is closely related to \u2014 once again \u2014 the weather: Climate change is causing temperatures to rise in almost every market globally, which in turn places enormous stress on coffee as a regular beverage choice if the focus remains on its traditional hot-drink format.<\/p>\n
\u201cOne of the biggest changes I see in coffee today is the shift to cold coffee \u2014 many younger consumers today are tending to drink more cold coffee than hot coffee, and mixing it with all kinds of different things as well,\u201d Wanner said.<\/p>\n
\u201cThis is where innovations like our ready-to-use coffee concentrates have come in, not only because it can be served cold but also because it adds a lot of convenience to at-home drinking: Just ice in a cup and pour in the coffee, and it is ready in three seconds. So it\u2019s innovations like these where we really see huge potential.\u201d<\/p>\n
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