2010 Fairtrade UK Commercial Conference.Ppt

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2010 Nestle Cocoa Plan presentation at Fairtrade Commercial Conference

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  • Thank you David for the introduction Good afternoon everyone Last year, Kit Kat 4 Finger became Fairtrade This presentation focuses on our cocoa sourcing: where we source from, the issues we face, and how we are trying to make a difference
  • Let’s zoom out and see cocoa on a global scale. The green belt is the equatorial are where cocoa grows. Global cocoa output is roughly 3.7 million tonnes. Cote d’Ivoire is 37% of this All other origins are much smaller in comparison. Ghana is number 2 with half the output of Cote d’Ivoire.
  • (Just follow slide) Now having seen all this information, put yourself in the shoes of a large chocolate manufacturer and decide where your cocoa will come from in the next 20, 30 years. Will you stay in Cote d’Ivoire, with all the risks involved? Or will you move away to develop a cocoa supply elsewhere? Nestle has answered that question. We will stay in Cote d’Ivoire and try to make a difference.
  • (follow slide) Plant expertise: R&D centre in Cote d’Ivoire – creating value in itself, with highly skilled urban jobs High yield plantlets – 2-4 times more yield than current trees. Not GMO, just better trees multiplied very fast for use.
  • (Follow slide)
  • (follow slide)
  • Illustrate with a CASE STUDY what going beyond compliance to Fairtrade standards looks like (follow slide) Strengthening cooperative: especially important in Ivorian context (follow slide)
  • (Follow slide)
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  • (follow slide) We did this already at launch – involving consumers and retailers as part of the supply chain has been built in from the start.
  • Now I’ve been asked to also share some of the supply-side challenges we’ve faced. This circle shows the cocoa capacity that was estimated to be available at Kavokiva before the ’09-’10 harvest. The orange area is what was actually delivered. Clearly we have to more work to be done. Let’s look at some specifics.
  • (follow slide) Re: 25%: there is just no more quality Fairtrade cocoa from Cote d’Ivoire in existence than that. Re: different approaches: Difference is a NUANCE – overall v positive
  • (follow slide)
  • 2010 Fairtrade UK Commercial Conference.Ppt

    1. 1. Wouter van Tol Head of Sustainability Marketing Nestlé UK & Ireland A brand perspective Tipping the Balance: a Brand Perspective
    2. 2. Where does cocoa for Kit Kat come from? Brasil : 160 Indonesia : 580 Nigeria: 210 Ecuador:115 Cameroon:185 Malaysia: 34 Ivory Coast: 1370 Ghana: 675 Source: ICCO Quarterly Bulletin Cocoa Statistics 2007/2008, volume x1000t Côte d’Ivoire is by far the world’s largest cocoa producer with 37% volume share Dominican Republic 50 EQUATOR +/- 10 Degrees
    3. 3. <ul><ul><li>Diseased crops </li></ul></ul><ul><ul><li>Ageing farmers, trees </li></ul></ul><ul><ul><li>Low income, high tax </li></ul></ul><ul><ul><li>Middlemen </li></ul></ul><ul><ul><li>Education, health </li></ul></ul><ul><ul><li>Stagnating volume </li></ul></ul><ul><ul><li>Worldwide supply deficits, high prices </li></ul></ul><ul><ul><li>Quality under pressure </li></ul></ul><ul><ul><li>High price does not always reach farmers </li></ul></ul>Issues facing cocoa in Côte d’Ivoire
    4. 4. The Cocoa Plan (www.thecocoaplan.com) <ul><ul><li>Our vision is to help cocoa farmers run profitable farms, respect the environment, have a good quality of life, and for their children to benefit from an education and see cocoa farming as a respectable profession </li></ul></ul><ul><ul><li>Investment: £65m in next 10 years, building on £35m in last 15 years </li></ul></ul><ul><ul><li>A commitment from Nestlé to Côte d’Ivoire </li></ul></ul><ul><ul><li>Plant expertise </li></ul></ul><ul><ul><li>Farmer training and assistance </li></ul></ul><ul><ul><li>Improving the supply chain </li></ul></ul><ul><ul><li>Better social conditions </li></ul></ul>
    5. 5. Creating Shared Value <ul><ul><li>The Cocoa Plan is a clear example of the way we do business at Nestlé. We call it &quot;Creating Shared Value&quot;. </li></ul></ul><ul><ul><li>This means that our business activities not only benefit our shareholders, but also create value across society including farmers, their families and local communities </li></ul></ul><ul><li>In this case: </li></ul><ul><ul><li>Value for farmers: increased income and self determination </li></ul></ul><ul><ul><li>Value for Nestlé: long term supply of quality cocoa </li></ul></ul><ul><ul><li>Value for consumers: enjoy KIT KAT even more </li></ul></ul>
    6. 6. Why Fairtrade? <ul><ul><li>Empowering farmers </li></ul></ul><ul><ul><li>Strengthening cooperatives </li></ul></ul><ul><ul><li>Raising farmer household income </li></ul></ul><ul><ul><li>Shortening the supply chain </li></ul></ul><ul><ul><li>Accelerating The Cocoa Plan in the UK </li></ul></ul><ul><ul><li>Two iconic brands joining forces </li></ul></ul><ul><ul><li>Not just the label – going beyond compliance </li></ul></ul>
    7. 7. Kavokiva – going beyond compliance <ul><ul><li>Cooperative </li></ul></ul><ul><ul><li>Key source of Ivorian Fairtrade cocoa </li></ul></ul><ul><ul><li>Pulling together all strands of The Cocoa Plan in one area </li></ul></ul><ul><ul><li>Develop a strong, long term relationship </li></ul></ul>
    8. 8. Nurseries for high yield cocoa plantlets
    9. 9. Farmer field schools
    10. 10. Improving social conditions <ul><ul><li>Vision: all primary school age kids in school </li></ul></ul><ul><ul><li>Working with ICI, local NGO, Fairtrade and others </li></ul></ul><ul><ul><li>Involving UK consumers </li></ul></ul>Together, Kit Kat & The Co-operative are giving 5000 children desks and benches for classrooms in Côte d’Ivoire, supporting both schools and local business.
    11. 11. Supply issues
    12. 12. Supply issues <ul><ul><li>Quantity </li></ul></ul><ul><ul><ul><li>25% of our needs currently available </li></ul></ul></ul><ul><ul><ul><li>Challenge: developing remaining 75% </li></ul></ul></ul><ul><ul><ul><li>Need for large Fairtrade coops </li></ul></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><ul><li>Improving quality is critical for success </li></ul></ul></ul><ul><ul><ul><li>Cocoa below our quality standards not accepted </li></ul></ul></ul><ul><ul><li>Different approaches </li></ul></ul><ul><ul><ul><li>Expansion vs. creating a replicable success model </li></ul></ul></ul><ul><ul><ul><li>Spread widely vs. focus resources </li></ul></ul></ul><ul><ul><ul><li>Positive and constructive dialogue with Fairtrade throughout </li></ul></ul></ul>
    13. 13. Conclusions and looking forward <ul><ul><li>A good start, but lots to do </li></ul></ul><ul><ul><li>Côte d’Ivoire: the road less travelled </li></ul></ul><ul><ul><li>Openness and trust </li></ul></ul><ul><ul><li>Growing cocoa supply </li></ul></ul><ul><ul><ul><li>Grow Kavokiva capacity </li></ul></ul></ul><ul><ul><ul><li>Expand number of cooperatives </li></ul></ul></ul><ul><ul><li>Beyond compliance </li></ul></ul><ul><ul><ul><li>Higher income via yield, quality and FT premium </li></ul></ul></ul><ul><ul><ul><li>Education, Health </li></ul></ul></ul><ul><ul><li>Share the stories </li></ul></ul>
    14. 14. Thank you

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