Popular on every continent of the earth, coffee is one of the most traded agricultural commodities in the world. In 2017, more than two-thirds of the global coffee production was exported, creating 125 million jobs and an $83 billion retail market value. The market is also extremely vast. While the largest importing countries are the United States, Germany and France, most coffee beans grow in smallholder farms in developing countries across Africa, Latin America and Southeast Asia, including 22 Low Human Development Countries, according to the U.N.’s Human Development Index. The Nespresso AAA Sustainable Quality Program aims to help coffee farmers in developing countries.
Coffee Farming in Developing Countries
In many of these underdeveloped regions, coffee is a particularly important crop and a significant source of income for farmers to recover from natural disasters, economic volatility or political conflicts. However, many smallholder farmers find it difficult to tap into the global premium market due to their low productivity, outdated processing technics and lack of market access. More than 2.5 million African smallholder coffee farmers are still in extreme poverty today. In other words, they live on less than $1 a day.
Nespresso AAA Sustainable Quality™ Program
Seeing the difficulties that farmers face and the great potential for future development, Nespresso, a subsidiary of Nestlé, one of the most popular and successful coffee businesses of the 21st century, launched the AAA Sustainable Quality™ Program in 2003. AAA stands for the triple focus on high quality, productivity and social and environmental sustainability, aiming to encourage rural economic development and improve the livelihoods and well-being of coffee farmers while producing high-quality coffee. To enter the program, a farmer has to produce a specific aroma profile and meet the quality and sustainability requirements.
Technical Assistance and Business Support
Once accepted in the Nespresso AAA Sustainable Quality™ Program, farmers receive tools and learn sustainable coffee growing and processing practices from the agronomists that Nespresso sends directly to their communities. Nespresso also helps install small wet mills that allow for greater efficiency and quality control in coffee aggregating and processing. Thanks to the adoption of these new or improved practices, land productivity has increased 40-50% in Kenya and Ethiopia.
Besides, Nespresso trains the farmers for better farm economic management and business practices, easier access to new and differentiated markets and stronger resilience to climate change through climate-smart agricultural practices. Together, this ensures greater profitability and income stability. Farmers have the right to choose the buyers, although many just sell their coffee to Nespresso since it offers a fair price of around one third above the standard market price and up to 70% of the export price can go back to farmers and their local communities.
Wider Systemic Solutions
Beyond the coffee business, the ultimate goal of the Nespresso AAA Sustainable Quality™ Program is to improve farmers’ living conditions. After years of endeavor, the program is evolving into a broader rural development program that encompasses sustainable agriculture, financial literacy, municipalities and social welfares. For example, in 2014, Nespresso and Fairtrade International together launched the Farmer Future Program in Caldas, Colombia, to provide the first pension scheme for coffee farmers. This will also help with the generational transfer of farms from parents to children, ensuring opportunity for young people in coffee-producing regions.
As of 2020, Nespresso has committed an annual investment of CHF 40 million and 400 agronomists have been sent to help farmers. More than 110,000 farmers in 14 developing countries have been participating in the Nespresso AAA Sustainable Quality™ Program.
The program is a veritable triple-win collaboration between coffee farmers, Nespresso and the customers. Nespresso sources approximately 95% of its total coffee supply through the AAA program, which is not far from 100%, its ultimate vision for the end of 2020.
– Jingyan Zhang