Thursday, 3 May 2012

Clooney, Coffee, Convenience and Credibility

George Clooney loves Nespresso – what else? Well, at least he claims that in the series of funny ads, which started in 2008. Have a look at the Nespresso TV spot, called “Mistaken”:

Ever since the multinational company Nestlé launched the coffee capsules in the 1990s, it has spread all over the world and has become a multi-billion business. It was a very clever marketing move by the Swiss food company.

In the beginning of the 1990s I did my PhD at the University of St. Gallen in Switzerland. I conducted research on “Ecology and Competitiveness in the Food Industry”. One of my in-depth case studies was on coffee, analysing the social and ecological impacts of the product along the entire life cycle, i.e. coffee plantation, transportation, roasting, distribution, consumption, and disposal. I guess I got really involved in the world of coffee - and the world behind the bean. The exceptional taste and the great convenience of the Nespresso made me buy a machine. I must admit that I could not turn down the ‘indecent proposal’ (Nespresso did not offer organic or fair trade coffee at that time). You just switch on the coffee machine, put in a cup of your taste, press the bottom, and here we go: An espresso or a coffee just the way you want it.

My students in business ethics class argued that Nespresso produces so much waste in the form of aluminium capsules. This is definitely a valid argument, and Nespresso points out, that the capsules are recyclable. From my own experience I doubt, that the recycling quota is very high, and that recycling of capsules really makes sense from an environmental point of view. However, when we compare coffee capsules with regular filter coffee, we have to consider the “waste” in the case of the latter as well - beyond the coffee packaging. You know how it is at home or in the office: Someone prepares a number of cups in the morning and everybody helps him- or herself until the coffee gets bitter or cold or both. Empirical studies show that about every fifth cup is thrown away for that reason. Usually, that does not happen in the case of coffee capsules, because they are prepared one cup at a time. I would love to see a comparative life cycle analysis regarding coffee capsules and roasted coffee considering this aspect. If you know any, please, let us know.

I was probably also one of the first customers to inquire about the social and environmental conditions in the coffee plantations at Nespresso (that was back in the second half of the 1990s, when Nespresso was not available all over the world). I guess the number of inquiries from customers and other stakeholders has increased since then. As a result Nespresso launched the Triple A Sustainable Quality Programme in 2005, in collaboration with the Rainforest Alliance. Farmers belonging to the programme are paid a price premium for both quality and sustainability. This premium is around 30% to 40% above the standard market price for coffee and 10% to 15% above coffees of similar quality. Beyond this, farmers also receive the training, support, technical assistance and direct investment needed to grow high quality coffee, more sustainably. At the end of 2010, Nespresso was already working with around 40,000 coffee farmers in seven countries and sourcing more than 60% of its coffee from Triple A programme. In this case sustainability is an integral part of the high-quality of the product and the service Nespresso offers to its customers worldwide.

As the market segment of coffee capsules continues to grow at a high rate, it attracts competitors as well. One of them is the “Ethical Coffee Company”, which offers coffee in capsules, which are made from organic, biodegradable material (instead of aluminium). At first glance, this is a good idea, but as sceptical scientists, and sustainability marketing scholars we would like to see some proof! What about an independent label or a comparative life cycle analysis? Taking the entire life cycle from cradle to grave into account, are the organic, biodegradable capsules really environmentally better than the aluminium capsules? What about the impacts of growing corn or sugar, and processing the raw materials into some kind of starch for the final packaging? Besides: What is it that makes the “Ethical Coffee Company” so ethical? What about social issues? Where and under what conditions is the coffee grown? Even after reading the information on the packaging and the website, many questions remain open … Play a game and name the “Sins of Greenwashing” yourself:

o      Sin of Hidden Trade-Off
o      Sin of No Proof
o      Sin of Vagueness
o      Sin of Irrelevance
o      Sin of Lesser of Two Evils
o    Sin of Fibbing
o  Sin of Worshipping False Labels.