IFC is contemplating an investment package of up to [US$6 million] to the Nespresso Sustainability Innovation Fund, NSIF. The financing will be used to support the AAA Nespresso coffee supply chains, in origins such as Mozambique and Uganda   to further support and address social and/or climatic challenges that these origins are facing. Such supply chains are part of the Reviving Origins Program, which became formally part of the Nespresso AAA Sustainable Quality program in 2019. By working with Nespresso, this investment program would support the planting of tens of thousands of trees, creation or ongoing support of coffee collection points, provision of agri-equipment for micro mills (pulping and sorting units, fermentation equipment) and the establishment of supply chains that comprise traceability and inclusiveness in coffee growing areas of Uganda and Mozambique. The investment will be supported by an IFC Advisory Services project (#603619), that will assist in providing training to the ~10,000 farmers that are expected to be reached with the program. The Nespresso programs in these two origins utilize implementing technical partners. These partners are bound, and operate to the standards proscribed, by the various elements of the comprehensive management systems (including those related to environmental and social matters) designed and operated by Nespresso AAA team, with its HQ in Vevey, Switzerland. In Uganda, the Rwenzori Revival Project, as it is known, is being led by two Implementation Organizations, namely (i) Agri Evolve Uganda Ltd (managing all operations and farmer support programs in the Rwenzori) and (ii) Kyagalanyi Coffee Ltd (managing commercial activities and export of coffee) who is the Volcafe Ltd (a part of ED&F Man of Switzerland) entity in Uganda who, along with Nespresso initiated the revival program in 2018. The current operation, to be supported in part by IFC, started in January 2019 and will operate for 5 years. Agri-Evolve have 70 full-time office and field staff. The agronomy field team maintain relations with the coffee farmers groups and the promoter farmers (key individuals recognized for their entrepreneurship regarding the program). They both work closely with the coffee farmers and maintain demonstration plots showcasing good agricultural practices (GAPs). Those staff working at the main coffee buying stations are responsible for organizing coffee purchase and processing, management of stock and quality testing and assurance. They operate two large wet mills for primary coffee processing in the Rwenzori region, providing facilities for the Dry Ugandan Arabica or Drugar coffee, cherries and parchment to process natural and washed coffee, drying facilities (both greenhouses and mechanical dryers), and operate a hulling and storage facility. The stations also provide a place to conduct staff meetings and training. The stations have a capacity to process/store 50 tonnes of arabica coffee per station per day. In the field, staff are responsible for the following: management of coffee supply chain from farmer to processing center, overseeing the network of farmer groups that are led by Promoter Farmers and supporting communities with mobilization of coffee and promoting GAPs and overseeing social projects and education on sustainability and the environment. Agri-Evolve are involved in several community-related projects alongside their management of the coffee supply chain. These include a Youth Team Program (providing young people with career opportunities and self- development whilst promoting coffee farming as a business), a Gender Equality Program (encouraging more women in training and coffee farming activities), a Coffee Nursery Bed Program (to rejuvenate the Rwenzori region whilst educating communities by producing high quality coffee) and other project management and implementation, such as schemes around community water boreholes and providing pit latrines for schools. Kyagalanyi Coffee (as noted above, a part of the Volcafé group)  was established in 1992 and is the oldest licensed coffee exported in Uganda sourcing washed Arabica, natural Arabica and Robusta coffees from all major coffee growing areas in Uganda. They have certifications for their operations in Uganda, including for their dry mill in Namanve, Kampala (ISO 9001:2008 and OHSAS 18001:2007), their roastery (ISO 9001:2008, HACCP and the Uganda National Bureau of Standards or UNBS) and for their sustainable coffee schemes (UTZ and RA). Overseeing the program is a Sustainability Manager (SM). Reporting to the SM is a coffee agronomist, a monitoring and evaluation coordinator and a Volcafe coordinator. The average farm size in the Rwenzori operation is 1.8 acres, with half of that land area typically dedicated to coffee, with an average per farm of  600-800 coffee trees. The objective of the program, as managed by Kyagalanyi, is to increase both quality and quantity of coffee grown from the traditional yields of  0.5-2kg per tree (equating to 0.5-1M Ugandan shillings (UGX) income per acre) to 3-5kg per tree (and up to 6-10kg where possible) equating to 2-3M UGX  (and possibly up to 4-7M UGX.) Such productivity increases can be achieved through implementing GAPs around rejuvenation, fertilization and pest and disease control as well as improved erosion control and post-harvest handling. A total of 116 people are employed as part of the Farmer Support Teams (FST); of these 28% are female. In 2019, a total of almost 30,000 individual training sessions were held with farmers on various topics, including technical and commercial matters, gender, and those around child labor. Coffee is procured, washed at stations equipped with wastewater treatment units and channeled through one buying unit (Kasese) to ultimately be processed at the company’s Namanve dry mill.The program in Mozambique has been in existence since 2012; the program to be supported by IFC (the Gorongosa Project or GP) began in 2019 and is located on Mt. Gorongosa (a biodiverse sensitive area with a conflict background) and is being run by the Gorongosa Project (GP) management. The Coffee Program is a large-scale agroforestry initiative with the stated goals of providing enduring socio-economic and environmental benefits. The GP works with local farmers and their families who live in three remote communities and who endorse a common vision of the integrated relationship between sustainable land use, community development, and biodiversity conservation value. The project aims to provide economic, social and environmental benefits. For example, it seeks to provide increased income of at least 1000 USD/year/ha (through access to international markets that pay a fair price to growers), to develop processing facilities that will employ local people, and supply coffee seedlings for farmers on the mountain. At the time of IFC appraisal, more than 381,100 seedlings have been planted. With respect to social programs, the project supports Girls Clubs and provides access to education and health facilities and services for farmers and their families. Specific programs target women’s empowerment and conservation. Environmental matters (and biodiversity in particular) are addressed by nurseries growing 9 indigenous species of rainforest trees which are interplanted with coffee for shade and reforestation, working to restore riverine habitats thereby helping to moderate runoff so as to ensure surface water resources can be utilized by all and providing additional habitat corridor for native fauna. Other initiatives are targeting market linkages for smallholder farmers, implementing financial inclusion solutions, and support for food security and relief interventions to help with peace and stability in the region. Long term goals for the project (termed VISION 2030) are for 1,000 ha producing high-quality shade grown Arabica coffee, 5,000 ha of protected and restored rainforest, supporting 1,000 farmers and 2,500 families with sustainable livelihoods. Currently, 3 area leaders supported by 11 technicians and a further 263 local workers are employed by the project. 622 small producers, including 230 women coffee farmers, grow coffee in 2 areas (Canada and Tambarara) with a third (Sandunjira) to be added soon. The GP project is responsible for receiving the coffee, processing (at either two wet mills or a dry mill) and then storage. As per the requirements of the Nespresso AAA program, all coffee beans will be traceable. Nespresso is an existing IFC client. The investment was signed in September 2016; details of the E&S appraisal conducted for that investment can be found at https://disclosures.ifc.org/#/projectDetail/ESRS/36083. As was reported in that document, Nespresso was founded in 1986 and is a wholly-owned subsidiary of Nestlé, a Swiss multinational food company. Nespresso is headquartered in Lausanne, Switzerland and markets at-home espresso and coffee machines and capsules, as well as single-origin and specialty coffees from coffee producers around the world.  Nespresso’s AAA Sustainable Quality Program, launched in 2003, is the company’s long-term commitment to working with farmers and coffee growing communities with the aim to promote a sustainable future. To date, the AAA program is found in 15countries, centered on over 40 clusters (the term for a geographic region) where AAA coffee is selected on the basis of cup taste and aroma profile. Only specific farms in this selected region or cluster are designated AAA. Each cluster is managed by a Nespresso supplier or partner. Globally, the program employs 415 agronomists (of which 32.5% are women), engages with approximately 120,000 farms covering 320,000 ha; of these 93% (in 2020) were AAA and currently 48% is certified to additional recognized, international standards (e.g. Rainforest Alliance).  The Reviving Origins approach was started with the first Nespresso coffee from  South Sudan in 2015, followed in 2016 by programs in Colombia and Cuba. As part of the AAA Sustainable Quality program, origins in Zimbabwe, Puerto Rico and additional areas in Colombia were added. These are now joined by Uganda, DRC and Mozambique. Origins that are typically characterized by some form of societal challenges or geographical difficulties (e.g. post-conflict, post hurricane) with Nespresso seeing the opportunity to use coffee supply chains to address environmental and social issues/inequalities while providing livelihoods and creating a sustainable supply of coffee. Origins with untapped quality potential are selected and then integrated into the program using a 5-step process; explore, validate, design, test and scale up. Local implementing partners get involved at the design stage. For example, the project in Uganda started in December 2018 and now has over 2,000 smallholder farms in 70 farmer groups. By September 2019, a full-service delivery study model in the field had been undertaken, two harvests occurred, and AAA trainings began and a coffee processing factory (wet mill) had been built.                                                 

 Jérôme Perez – Head of Sustainability, Nespresso SA

Mail: Jerome.Perez@nespresso.com

For Mozambique  and Uganda: Paulo Barone – Head of Coffee Sustainability and Origin Development – Nespresso SA

Mail: Paulo.Barone@nespresso.com 

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