Nespresso in collaboration with coffee suppliers, development agencies, and non government organisations has implemented a series of projects that aim to improve farm management practices and the standard of living of coffee farmers and their families

1. Fact sheet: Real Farmer Income™ case studies
At a glance
• Nespresso in collaboration with coffee suppliers, development agencies, and non government organisations
has implemented a series of projects that aim to improve farm management practices and the standard of
living of coffee farmers and their families
Due to stagnant or falling prices for many grades of coffee, an increasing number of small growers
are abandoning their coffee trees and seeking alternative income opportunities. While overall
coffee prices are unlikely to make coffee production the most lucrative possibility in many rural
areas, the global demand for high quality specialty coffees is expected to continue to increase.
Given appropriate geographic positioning, soils, climate and other fixed factors, many farmers have
the potential to supply this premium market segment and increase their incomes.
During the six years since the original inception of the initiative Nespresso has collaborated with a
range of partners within its AAA Sustainable Quality™ Coffee Program, each of them contributing
to the goal of producing AAA coffee and ensuring that coffee farmers, communities and the
environment benefit from the approach. The following three cases studies demonstrate how
Nespresso is working with different partner organisations in order to achieve this.
Case study 1: Cauca and Nariño
The Colombian departments of Cauca and Nariño are characterised by smallholder coffee-growing
activity, in which poverty has been a constant for many years. However, the coffee-growing area
stands out because it produces a very high quality coffee, valued and desired by the most
demanding markets worldwide.
In Cauca and Nariño coffee cultivation is mostly undertaken on farms of less than 1.5 hectares of
coffee and with an inadequate coffee infrastructure, resulting in wastewater contaminating water
sources. In addition deficient drying infrastructure drastically affects the producer’s income
because its adverse impact on the quality of the product.
Nespresso is working with the National Federation of Coffee Growers of Colombia (FNC) and the
local community to revitalise the production of highest quality sustainable coffee through:
• Technical assistance
• Follow-ups to continuous improvement plans
• Process verification and assessment
• Training
• Adaptation and improvement of coffee milling and drying processes
• Disseminating pre-harvest and post-harvest practices
• Handling waste waters generated on the farm to avoid environmental pollution
• Applying sustainable agricultural best practices
At the same time, the project is stimulating social and environmental improvements in coffee areas
and is helping to improve the quality of life and wellbeing of 3,839 coffee growers enrolled in the
Nespresso AAA Sustainable Quality™ Coffee Program. In overview, the project is focusing its efforts
in two main areas:

2. 1. Improvement of coffee milling and drying processes, and water decontamination of coffee-
growing farms: Through the direct relationship with coffee farmers, Nespresso has been able to
collect information on individual needs. This includes requirements for improving coffee quality
and obstacles to overcome in order to achieve minimum environmental and social standards. As
such Nespresso is financing investments at farm level such providing 306 new parabolic solar
dryers, upgrading 136 wet mills and constructing 186 new ones, and setting up 396 waste water
treatment systems and 804 process or household water treatment systems.
2. Technical support to strengthen sustainable coffee production: Training is being provided to
improve the knowledge, adoption and application of sustainable farm and agricultural
management. This might come in the form of assistance for the creation of farm improvement
plans, business management workshops, environmental management training, safe and efficient
management of pesticide training, first aid, and soil management and conservation practices.
The project is also facilitating access to credit among coffee producers by allowing them to
access the ICR for ecologic benefit. The ICR is a cash incentive that the Colombian Government
gives to farmers who want to improve their productive infrastructure (e.g. wet mills).
More than US$4.7 million is being invested by Nespresso, The National Federation of Coffee
Growers of Colombia and the local community in this project. The producers and their families are
supporting the infrastructure component by contributing with manpower and materials from the
region.
In addition, the project has been reinforced through an additional partnership with ACDI/VOCA
(an independent non-for-profit organisation) and Acción Social (a Colombian government social
development organisation). This new partnership is supporting the productive infrastructure
improvement process and water decontamination of 581 coffee-growing farms in Nariño. These
two partners and Nespresso have contributed an additional investment of US$319,000 for this
project.
Case study 2: Caldas
In Caldas, Colombia, Nespresso has concluded a three-year program with the NGO TechnoServe. At
the end of 2006, TechnoServe and Nespresso launched a collaborative effort to integrate small-
scale coffee growers into the Nespresso AAA supply chain. The program was designed to create and
capture more value for players across the value chain. The project focused on developing a
sustainable procurement model to benefit small coffee growers. The effort targeted an area in the
north of Caldas, Colombia, with around 10,000 hectares of coffee production.
Within the partnership, TechnoServe and Nespresso worked with, the Comité de Cafeteros de
Caldas (local branch of The National Federation of Coffee Growers of Colombia), Expocafé (main
Colombian coffee exporter), three cooperatives in the Caldas region and Cafexport (Swiss coffee
importer, supplying directly to Nespresso). The program focused on improved farm productivity,
upgrading wet milling, developing new pricing strategies and improving business management.
This holistic approach has proven very effective, and has united the major coffee sector actors
around a common vision and strategy. Most importantly, it has generated impressive results
benefiting small growers while making the Nespresso process more efficient and reliable,
augmenting volume, and standardising quality.
Specifically, the program included four main activities:
1. Improvement of farm productivity through technical assistance

3. 2. Assessment of the potential for improving coffee quality through wet milling
3. Improvement of purchasing techniques by developing price incentives and traceability
4. Improvement of the AAA program by building field knowledge
The program lasted over two years, starting in August 2006, and covered 3 cooperatives in the
department of Caldas, Colombia, for a total of 1,260 farmers.
The most significant results of the project under each activity area were:
1. Farm productivity: Under the Technical Assistance Program 1,260 growers benefited from 4,332
direct one-to-one visits while the coffee community in general gained knowledge indirectly
through the program’s diffusion of best practices by radio and open meetings. Subsequent
interviews with AAA farmers proved their satisfaction with the technical assistance since it
helped them lower production costs, utilise natural resources more efficiently, increase sanitary
and hygienic conditions and organise their farm’s financial accounts.
2. Wet milling: The financial, operational and qualitative analysis of a central wet mill concluded
that such an effort would not only be feasible economically but it would also increase volume
and the standardisation of the coffee’s quality. This was verified by an independent review.
3. Price incentives and traceability: A traceability system was designed to improve transparency
throughout the supply chain.
4. Building field knowledge: The AAA program’s field knowledge was improved through interviews
that helped clarify farm economics, growers’ motivations and potential incentives for loyalty
programs.
The program has proven to be a successful AAA Ecolaboration™ that creates value for producers,
exporters, the roaster and retailers. It has raised the living standards of people at the base of the
pyramid through improved income, field expertise, sanitary practices and environmental
education. Nespresso has gained a larger production base as the success of the program attracts
additional coffee growers. Furthermore, the program has demonstrated a model that ca be
replicated and scale up.
The growers have also been able to increase sales to other buyers and have reaped considerable
additional socio-economic value outside the immediate domain of the Nespresso supply chain.
Case study 3: Central America
Nespresso is currently over halfway through a multi-lateral public-private partnership (PPP) with
the International Finance Corporation in Central America. Nespresso, through its parent company
Nestlé, signed a three-year project with The International Finance Corporation (IFC), the
commercial finance division of the World Bank, and ECOM (a AAA coffee supplier).
The project objective was to increase profits (shared value) of coffee producers in Central America
and southern Mexico, that are part of the ECOM-Nespresso value chain, by improving their social
and environmental standards for higher prices, while reducing their expenses and enhancing their
productivity. Rainforest Alliance was selected to be the project execution coordinator due to its
significant experience accumulated in similar projects, and its knowledge and expertise in working
with coffee farmers.

4. The project began in January 2007 and was expected to run until December 2009. However, in
order to be able to evaluate the performance of the Nespresso clusters and collect data from the
sales of the 2009/10 harvest, the project has been extended to April 2010.
The project is being implemented in three countries in Central America and includes support in
improving agricultural practices to achieve better quality and sustainable coffee through the
Nespresso AAA Sustainable Quality™ Coffee Program. The implementation of this project included
conducting workshops that introduce producers to the Nespresso TASQ™ Self Assessment tool,
technical assistance for continuous improvement and final AAA system verification. Producers who
qualify in the Nespresso AAA Sustainable Quality™ Coffee Program are able to demonstrate
continuous improvement in quality, social, environmental and economic standards as specified in
TASQ™.
The project’s progress is monitored and evaluated on a quarterly basis against a set of measurable
targets & key performance indicators. According to the latest results, in less than three years,
farmers have received 180 training sessions and ongoing technical assistance. Owing to its success,
the program has grown from just under 3,400 farmers to almost 5,700 farmers. The premium paid
to Nespresso AAA farmers so far has resulted in over US$3 million of increased income for their
efforts, while 23% of farms in the Nespresso AAA Sustainable Quality™ Coffee Program have moved
from underperforming to either basic or emerging.