Nescafé unveils $1 bln plan for coffee sustainability, focusing on Vietnam

Nestle Group’s flagship coffee brand Nescafé will invest over one billion Swiss francs (over $1.02 billion) by 2030 to help coffee farmers transition to regenerative farming methods and adapt to the climate emergency.

The Swiss food and nutrition giant announced this ambitious Nescafé Plan 2030 on Tuesday, saying the initiative will focus on the brand’s suppliers in Vietnam, Brazil, Mexico, Colombia, Ivory Coast, Indonesia, and Honduras, where 90% of the coffee Nescafé sources is grown.

Brazil is the world’s largest coffee producer, followed by Vietnam as the second largest. However, Vietnam is the world’s largest robusta coffee exporter.

“Climate change is putting coffee-growing areas under pressure,” said David Rennie, head of Nestlé coffee brands. “Building on 10 years' experience of the Nescafé Plan, we're accelerating our work to help tackle climate change and address social and economic challenges in the Nescafé value chains.”

Philipp Navratil, head of Nestlé's coffee strategic business unit, said: “We want coffee farmers to thrive as much as we want coffee to have a positive impact on the environment. Our actions can help drive change throughout the coffee industry.”

Via the plan, the brand pledges to help coffee farmers plant carbon sequestering crops, increase the use of organic fertilizers, improve bio-diversity and provide disease and climate-change-resistant coffee trees.

By 2025, the initiative, which aims to accelerate an operating Nescafé plan, is targeting that 100% of its coffee will be “responsibly sourced”, up from 82% in 2021, and that 20% is sourced from regenerative agricultural methods, rising to 50% by 2030.

Nestle says regenerative agriculture, which can contribute to drawing carbon from the atmosphere, is a key part of its net-zero commitment, which aims to half greenhouse gas emissions by 2030 and reach zero net greenhouse gas emissions by 2050.

The Swiss giant adds it has already made inroads to meeting its goal, achieving a 46% reduction in greenhouse gas emissions at its soluble coffee factories in 2020 versus 2010 levels per ton of product.

Nestle last October injected an additional $132 million into its coffee business in Vietnam, doubling Nestle Vietnam Company’s coffee product manufacturing capacity at its Tri An factory in Dong Nai province which borders Ho Chi Minh City, the country’s southern economic hub. Nestle Vietnam was founded in 1995 and the new capital inflow raised its total investment in the Southeast Asian nation to $730 million.

The sum did not include around $700 million the Swiss conglomerate used annually to buy coffee beans from Vietnamese farmers, Nestle Vietnam CEO Binu Jacob said at that time. These purchases, he added, accounted for one-fifth or one-fourth of total coffee beans harvested annually in Vietnam.

Jacob stressed that the Swiss group believed in Vietnam’s future as a global and regional manufacturing hub, and would continue to expand and invest in it. “Indeed, Nestle Vietnam is recognized as one of the most efficient and flexible operating systems in all markets where Nestle is present.”