Buying helps Nestlé boom in 2010
Nestlé draws up responsible sourcing requirements
Cocoa buyers move to calm market
Mars awarded for cocoa farm sustainability work
Panorama: Chocolate – The Bitter Truth
18 March 2011 | Angeline
suppliers are being encouraged to convert manure from their dairy cows into
renewable energy for rural communities.
The global confectioner says
in its latest Creating Shared Value report that is has developed biogas as
well as dairy improvement projects with milk suppliers.
With around 32,000 farmers
supplying milk to its Kejayan factory in Indonesia through 31 dairy
cooperatives, Nestlé is helping them improve quality of milk to enable them to
charge a higher price. It is also giving dairy cooperatives access to biogas
units so they can convert methane from their cattle’s manure into renewable
The company provided
financial assistance to farmers as part of a partnership with the Humanist
Institute for Development Cooperation, which is building biogas units and
training farmers to use them. A Nestlé fund enables cooperatives to buy the
biogas units and the renewable energy is given to farmers to use in their
communities. Nestlé plans is to set up 8,000 biogas units.
One biodigester at a Nestlé
supplier’s dairy farm in Mexico is currently processing 1,200m3 of methane a
day from nearly 2,400 cows. Another Mexican farm is processing 2,400m3 a day,
which is expected to reduce the site’s electricity consumption by 90 per cent.
Nestlé, which has a 165
000-strong supplier base, reports that nearly 52 per cent of its raw material
expenditure goes on the procurement of milk, coffee and cocoa.
It plans to invest CHF500
million (£344 million) in sustainable coffee sourcing. Tens of thousands of
farmers and small-scale intermediaries deliver coffee directly to Nestlé’s
buying stations which helps them secure a higher price. Around 10 per cent of
the coffee beans used in Nescafé are sold directly to Nestlé in this way, a
figure the company plans to double by 2015 to 180,000 tonnes-a-year.
Meanwhile, the chocolate
maker bought 380,000 tonnes of cocoa in 2010 – over 10 per cent of the world’s
supply. It aims to invest CHF110 million (£75.6 million) in sustainability
initiatives over the next decade. It will also to improve the supply chain by
buying from cooperatives and paying a premium for high-quality cocoa. From
October 2009 to September 2010, 6,400 tonnes of cocoa were bought from 9,056
farmers in 20 cooperatives but Nestlé plans to increase this in 2010/11 to
12,000 tonnes from 15,000 farmers in 34 cooperatives.