The NESCAF Plan

Building a global plan for

Creating Shared Value in

Coffee

Romn Irurre Wolfisberg

Ratkaisun Paikka

Helsinki/ May 13th, 2014

1

NESCAF in the world

Why are we doing this?

What are we doing?

How are we doing?

What should you take away?

2

Roadmap to Success

Founded in 1938 as a CSV initiative in Brazil

Part of total BEVERAGES, the biggest, fastest growing and most profitable Nestl business

NESCAF is sold in 180+ countries global brand

More than 475 million cups consumed per day; 5,500 per sec.

Revenues of CHF 10 billion in 2012

Largest R&D network of any coffee beverage company with 7 research, development and technology facilities worldwide

27 factories; more than half in developing countries, most of those in rural areas

3

NESCAF: worlds leading coffee beverage

From Compliance to Creating Shared Value through:

Direct Procurement (secure quantity, improve quality) Community Engagement & Rural Development Reduce Environmental Impact

4

The NESCAF Plan is key to

secure good quantity & quality of green coffee

Compliance

Sustainaibility

Rural

Development

Farmers training, technical assistance and sustainable stream of revenue Production: major savings on energy & water utilization Consumers/ Customers education and engagement

Commitments

5

NESCAF to lead the Sustainability agenda

Consumer choice

Sustainability becoming a

core driver in brand choice

Green coffee supply challenge

Global demand for Green Coffee to exceed Supply

from XXXX onwards

Dramatically worse scenario for sustainable

coffee demand

Leadership comes with responsibility

No. 01 coffee brand

75 years

475mill. cups per day

More than 1mill. farmers and farm workers

27 factories

More than 200 agronomists

no coffee, no NESCAF!

6

Coffee farming under intensive pressure

from competitive crops with higher return

0

2,000

4,000

6,000

8,000

10,000

Low risk for Coffee High risk for Coffee

Net

Farm

er

Inco

me U

S$/H

a

n Arabica coffee n Robusta coffee n Tea n Black Pepper n Rubber n Palm Oil n Cocoa

Brazil

Brazil

China

Mexico India

Viet -

nam

Mexico

Philip - pines

Ivory

Coast

Thail -

and

Indo -

nesia

7

8

Pillars 1, 2, 3 on track overall

Responsible farming

Responsible production & supply

Responsible consumption

Key

areas

1 2 3

Promote consumption

Educate consumer on situation coffee is facing

Help consumers to reduce footprint

Farmers trainings & assistance

Direct procurement

Plantlets

Partner:

Soluble, systems (NDG), NP

Develop socio-economic impact

Global brand, mainstream reach

Education and engagement

Video/ animatic PLANTLET PROPAGATION

9

Creating Shared Value in Colombia

10

Creating Shared Value in the Philippines

11

CSV adressing challenges in a different way

FOODSECURITY PROGRAMME

KENYA & ETHIOPIA (FOSEK)

12

Scope: 120,000 small-scale coffee farmers

20% women

Establishing 25 nurseries and storage facilities

Reaching food and coffee productivitiy increase with 40%

Consortium of 9 partners (Nestle, Solidaridad, CMS, SMS, Dorman, CRF, SCFCU, OCFCU and YCFCU)

Budget 9.2 million for 7 years (47,5% contribution from Dutch Ministry)

Quick Facts

The Sustainable Coffee Program focus countries

* Measure in 60kg bags of green coffee beans,

countries producing less than 0.5m bags are excluded

Source: USDA

4-10m bags

1-4m bags

Tropic of Cancer

Tropic of Capricorn

Production volume*

>10m bags

Brazil

Uganda

Ethiopia

Vietnam

Production volume*

Indonesia

Columbia

Peru

Phase 1

Phase 2

14

NESCAF agricultural empowerment approach key for

differentiating (Farmer Connect + R&D Tours)

Committed

to local

production

Presence

along the

whole value

chain

Investing in

future

supply,

beyond

existing

challenges

Focus on

farming and

agricultural

empowerm

ent

Breadth &

depth of

engagement

with farmers

NESCAF Plan represents a unique proposition, built on 5 differentiating elements:

Only NESCAFs R&D Tours and Farmer Connect looks at the mainstream challenge,

(training, agro-services, plantlet propagation & distribution, local production and direct procurement at a wider scale), making a difference through Agricultural Empowerment

1 2 3 4 5

from training partnership with Rainforest Alliance (RA) to the agronomists (201 in 14 countries), factories etc.

eg. plantlet propagation & distribution (more than 44mill. since launch of plan (ytd Dec. 2013).

keeping coffee farming a viable business for the next generation means transferring farming and business skills improving yields and optimising production costs.

from training in sustainable farming to ongoing practical support (and potentially micro-financing).

optimized supply chain & more revenue for the local community and producer countries (i. e. Nestl the only MNC w. coffee factories in Ivory Coast & Colombia).

15

THE

NESCAFE PLAN IS

BUILT ON TANGIBLE

FACTS

16

THE

NESCAFE PLAN IS

TOLD WITH

EMOTION

17

Employee Engagement at NESCAF in Spain

18

From our People, for Our People

19

Community Engagement in the Ivory Coast

20

Many activities developed across the value chain,

Next step is to bring them organically together

Farmer Connect

Active12-13

Factories

Pillar 1

Pillar 3

Pillar 2

KEY TAKE AWAYS:

21

STRATEGY:

Secure good quality & quantity of green coffee

OBJECTIVE:

Creating Shared Value

ENABLER:

NESCAF Plan

22

THANK YOU!

The NESCAF Plan

Building a global plan for

Creating Shared Value in

Coffee

Romn Irurre Wolfisberg

Ratkaisun Paikka

Helsinki/ May 13th, 2014

23