Nespresso AAA Sustainable Quality Program in Ethiopia and Kenya

The Nespresso AAA Sustainable Quality™ Program is a unique green coffee sourcing approach that combines a focus on quality, sustainability, and productivity. It aims to secure a stable supply of the highest quality coffee for Nespresso, while simultaneously improving the livelihoods of the farmers that grow it through the lens of environmental protection. In 2013, Nespresso and TechnoServe entered into a partnership to pilot the rollout of the Nespresso AAA Program in Africa.

Context

Coffee is a major source of income for smallholder farmers across East Africa, a region rich with the climatic and geographic conditions needed to grow high-quality coffee. Ethiopia and Kenya are Africa’s largest producers of Arabica and washed Arabica coffee, respectively, making coffee a critical cash crop and export. However, despite the region’s potential to produce some of the best specialty coffee in the world, many smallholder farmers are unable to tap into these premium markets, often held back by a combination of low productivity, limited processing capabilities, and poor market access.

More than half of Africa’s 5 million smallholder coffee farmers live on less than $1 a day. Various challenges – from environmental degradation, pressures from growing and migrating populations, and poor farming practices, among others – are preventing East Africa’s coffee markets (and the farmers that rely on them) from thriving. These challenges are complex, and a strategy for a more prosperous coffee chain must be adaptive and systemic, rooted in the actions and interactions of diverse stakeholders, such as the farmers and their cooperatives, private traders, wet mills, exporters, roasters, input providers, financial institutions, and various levels of government.

Opportunity

Ethiopia and Kenya have a climate and terrain that yield unique coffee profiles, famous for their floral and citrus notes that are not found elsewhere and that provide tremendous opportunities for inclusive economic growth. Improving quality, productivity, and business practices throughout the coffee industry has the potential to help coffee farmers sustainably boost their incomes and improve their livelihoods through a productive and prosperous coffee value chain.

In addition to improving quality on the farm, farmers – and the sector at large – can benefit from improvements to local processing facilities, known as wet mills. The coffee supply chains for Ethiopia and Kenya are structured around these local wet mills, which aggregate and process coffee, allowing for greater efficiency and quality control. Improving the operations and sustainability of these mills will increase the volume and quality of green coffee, strengthening the region’s coffee sector while increasing farmers’ incomes.

Strategy

Since 2013, TechnoServe and the Nespresso AAA Sustainable QualityTM program have been working to address these market and production challenges in East Africa by working with hundreds of wet mills and thousands of farmers to improve quality, sustainability, and productivity across the coffee sector in Kenya and Ethiopia.

The AAA strategy is two-fold, working to strengthen coffee production and processing in Kenya and Ethiopia. At the farm level, the program focuses on establishing direct and lasting relationships with AAA farmers, teaching them best practices to increase productivity, quality, and sustainability through the AAA Academy. The training – which takes place on the farm – focuses on yield-enhancing techniques such as composting and rejuvenation, as well as important skills for the sustainability of participants’ farming businesses, from erosion control to recordkeeping.

At the processing level, TechnoServe staff work with local wet mills, supporting their ability to aggregate, process, and supply sustainable volumes of AAA coffee, while also implementing important processes to maintain the coffee’s traceability from farmer to buyer. Improvements to mill operations include trainings to strengthen their compliance with TASQ Core Criteria – a set of indices that assess adherence to specific social, environmental, quality, and economic standards, such as minimum wage and the adequate disposal of waste products.

By collaborating with local governments and other stakeholders to enhance coffee-processing capabilities, improve socioeconomic conditions in farming communities, and create solutions to challenges in the coffee supply chain, this holistic approach will enable Nespresso to achieve its target of sourcing high-quality coffees from the region, while reducing poverty and improving resilience to climate change for approximately 57,000 total households by 2020.

Results

Since 2013, the AAA Program has delivered training to over 73,000 registered coffee farmers across Kenya and Ethiopia through the AAA Academy, and has also delivered quality and sustainability training to 215 wet mills. To date, this training has helped to generate more than $1 million in increased income and wages across the two countries.

Wet mills participating in the AAA program have also recorded significant improvements in their uptake of sustainable social, economic, and environmental practices. As of December 2017, 91 percent of the audited wet mills in Ethiopia were complying with at least 90 percent of the 26 TASQ Core Criteria, while 66 percent of the audited wet mills in Kenya complied with 90 percent or more of the criteria, demonstrating major advances in the proper use and management of agrochemicals.

The AAA Academy training program is already demonstrating measurable impact at the farm level by boosting the adoption of best agronomic practices. In Ethiopia, the percentage of households implementing at least half of these techniques increased from 10 to 43 percent between 2013 and 2018. In Kenya, farmers have recorded even higher adoption rates, with 55 percent of trained households regularly using at least half of the program’s practices – compared with only 4 in 2014.

In 2016, the AAA Program launched a light-touch farm visit program, which serves to maintain the team's relationships with graduates of the AAA Academy and to promote continued use of best practices, resulting in long term growth for farmers and the sector. Additionally, the AAA Program established relationships with local nurseries and developed a strategy to distribute seedlings for indigenous shade trees. By increasing access to shade management materials, this initiative not only increases the productivity potential of local coffee farms, but also supports efforts to increase biodiversity and mitigate soil erosion.

Partners

After the initial successes of TechnoServe and Nespresso’s partnership through the AAA Sustainable Quality Program, the International Finance Corporation (IFC) and the Sustainable Trade Initiative (IDH) joined the initiative, generating nearly $4.5 million in co-funding. These investments attest to the program’s potential to have a large-scale impact on the Ethiopian and Kenyan coffee sectors.