Kenco's Coffee Vs Gangs project just part of company's efforts to protect global supply chain

Will Green is news editor of Supply Management
20 May 2015

Kenco is training 20 young people at risk of joining violent gangs in Honduras to become coffee farmers as part of wider global efforts to create a secure supply of the crop.

Mondelēz International, parent company of Kenco, is working with its beverage brands to tackle the challenges posed by climate change and an ever-increasing demand for coffee.

The Coffee Vs Gangs project in Honduras, currently portrayed in Kenco's advertising campaign, is designed to create “consumer pull” for sustainable coffee.

At the same time Mondelēz is investing $200 million to train one million farmers worldwide by 2020, with the aim of lowering their costs and increasing yields.

Malcolm Hett, global sustainability manager for Mondelēz, said: “Without consumer appreciation of doing things the correct, sustainable way in the origin [country], we don’t really have as much motivation for a big company to get involved in it.

“We are pushing ourselves to generate the consumer pull and we’re working heavily in the origins to create the change we’re looking for in the supply chain.”

Mondelēz, which buys up to around 6–7 per cent of global coffee production, has trained more than 300,000 farmers this year, and is working with 24,000 farmers in Ethiopia and 16,500 in Honduras, where it buys more than 30 per cent of the country’s arabica crop. There are also projects running in Vietnam, Peru and Indonesia.

“Each country has its own specific challenges. One thing we’ve noticed in Honduras, which is a very important origin for us, is that society is suffering a lot from gangs. What is society’s challenges tend to reflect on to the challenges of the coffee farmers,” said Hett.

“It’s not the only solution but it’s what we know. We are a coffee company. We’re not going to solve [the problem of gangs] in Honduras but we can do our little bit that is relevant to us.”

Hett said demand for coffee was growing by 2.5 per cent per year and it was predicted to hit 165 million 60kg bags in 2020, compared to 142 million bags in 2012.

At the same time climate change is threatening to generate more extreme weather and reduce the amount of land available for coffee, which can only grow above certain altitudes.

“There are a number of projections but I’ve not seen a single projection that is positive in terms of the long-term future of agricultural space for coffee. Farmers need to be made more adaptable and resilient to cope with that,” said Hett.

He said it was better to invest in farmers rather than rely on the open market to source coffee. “We are not able to substitute anything for anything else,” he said. “We are the biggest importer of coffee from Honduras, which means you can’t just switch that off. That means it is a coffee origin that has a particular importance for our supply chain.

“I am sure over time we could become less reliant on it, however, isn’t it better to invest and say we’d like to take control of this and invest in an origin rather than to not do anything about it and just move your bets around the world endlessly?”

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