Communicating Sustainably

Ramacafé, Managua

September 3 2007

Dean Sanders

Director of Sustainability Nestlé Nespresso

To cover

Establishing the need and the opportunity

Exploring the principles and some other company examples

Sharing our approach

To cover

Establishing the need and the opportunity

Exploring the principles and some other company examples

Sharing our approach

To consume

To destroy, to squander, to

use up, to deplete

Oxford English Dictionary

Current levels of consumption are not sustainable

“One man’s consumption becomes his neighbour’s wish.

The more wants are satisfied, the more wants are born”

John Kenneth Galbraith, The Dependence Effect

So what’s the challenge?

To facilitate and enable the transition

from an unsustainable wasteful consumption

towards a new form of sustainable consumption

Business and society are in transition from the

consumer society…

Deliver $$

Drive lowest cost Consume more

Drive consumption

Shareholder

Value

Supply Chain The Consumer

Communications

Industry

The

Corporation

…to the sustainable society

Social, economic, environmental

Consume sustainably

Drive sustainable consumption, build brand

social equity

Shareholder

Value

Supply Chain The Consumer

Communications

Industry

The

StakeholderAnti-social practices a source of reputation risk

The

Corporation

What should companies pay attention to in the next

few years?

Source: Ipsos MORI June 2007, All British Public

Sustainable consumption is growing

Source: Fairtrade Labeling Organizations. Annual Report 05-06 Organic Trade Association, Soil Association, IFOAM

$-

$50,000,000.00

$100,000,000.00

$150,000,000.00

$200,000,000.00

$250,000,000.00

$300,000,000.00

$350,000,000.00

$400,000,000.00

$450,000,000.00

$500,000,000.00

Germany UK USA

Fairtrade 2004

Fairtrade 2005

$-

$2,000,000,000.00

$4,000,000,000.00

$6,000,000,000.00

$8,000,000,000.00

$10,000,000,000.00

$12,000,000,000.00

$14,000,000,000.00

Germany UK USA

Organic 2004

Organic 2005

Fairtrade

Organic

23%

35%

60%

12%30%

40%

To cover

Establishing the need and the opportunity

Exploring the principles and some other company examples

Sharing our approach

The principles and practices for success

Beliefs and

values

Communication

Product and

practices

Knowing who you are and gaining insight

into changing social patterns

Beliefs and

values

Communication

Product and

practices

We believe that everyone is

beautiful…

We believe in treating people and the environment with respect…

We believe in wellbeing…

Informing operations with beliefs

Beliefs and

values

Communication

Product and

practices

Supply chain

realignment…

Economic

transparency

and

traceability…

Independent validation…

Efficiencies

for the

consumer

Disruptive innovation signalled on pack

Bringing beliefs and practices to life for stakeholders

Beliefs and

values

Communication

Product and

practices

With honesty

Democratically

With humour

In the right tone for the right brand…

Not forgetting quality

To cover

Establishing the need and the opportunity

Exploring the principles and some other company examples

Sharing our approach

Our ambition

To be the icon for perfect coffee worldwide

Nestlé Nespresso

CHF 1 billion business

Growing at 30-40% per annum

Over 3 million Club Members

Represented in 48 countries around the world

Boutiques in 40 cities

Founded on our unique trilogy:

The world’s highest quality Grand Cru coffeesSmart, stylish and award-winning coffee machinesPersonalized 24x7 service for our Club Members

Nespresso - Passion for Perfection

Highest quality green coffee

Unmatched experts for roasting & grinding

Superior capsules/quality

Best machines, high innovation& emotional design

24/7 personal service

Within 48 hours delivery

Great variety, convenience & guaranteed freshness

Exclusive boutique network

Best in-cupquality (60/40)

Nestlé Nespresso manages the value chain from cherry

to cup

Three factors led to the creation of our AAA Program

1. The potential shortfall in the availability of highest quality coffee of the Nespresso flavour and aroma profile

2. Building on and developing Nestlé’s corporate sustainability commitment

3. Building the reputation of Nespresso as consumer expectations change

What Does « AAA » Mean ?

AA Highest Quality

A Sustainability

AAA Sustainable Quality

Nespresso AAA Sustainable Quality™ Program

To know more about - and to share more what we know about -

highest quality coffee cultivation and sustainable practices

Nestlé Nespresso’s wants to be preferred and respected as the leading quality coffee company for portioned coffee to become the

Icon for Perfect Coffee Worldwide

Leveraging the value of AAA Program to bring the consumer

closer to origin and to make the AAA Sustainable Quality™

Program more tangible

What Have We Done?

Pilot phase pre 2003

Engaged multiple stakeholders

Developed and tested the Tool for the Assessment of Sustainable Quality (TASQ™)

Involved 14 000 farmers in 9 regions in 5 countries

Currently 30% of all our coffee sourced through theAAA Program

Target 50% by 2010

A unique sustainable quality assessment tool tailored

to our business model

Quality criteria

Variety of the coffee

Crop Density

Plantation conditions

Soil Characteristics

Period and Time of Flowering

Harvesting Type

Shadow and percentage

Type of Agrochemicals used

Storage of the coffee

Drying processes / practices

Social Criteria

Hiring policies

Hiring practices

Rights and benefits of workers

Worker conditions

Labour conditions

Occupational health

Housing for workers

Rights and benefits of workers

Workers freedom and rights to organize

Access to educational & medical services

Communication with community and producers

Economic criteria

Ave. price received for last crop

Total production of the farm

Productivity

To whom the coffee is delivered

Further commercial activities of the farm

Average price paid to the pickers

% income from coffee activities

Environmental Criteria

Conservation of Biodiversity

Reforestation

Waste Management

Soil Conservation

Integrated Crop Management

Water consumption

Quantity and quality of waste generated

Quantity of energy used in the process

AAA Program Stakeholders

The AAA Sustainable Quality™ Messaging

AAA is a unique combination of quality and sustainability fully integrated into Nespresso business model

AAA is not charity – it’s about helping coffee farmers to help themselves driven by the commitment to highest quality

AAA is caring about now and the future

AAA builds on long-term partnerships between Nestlé Nespresso, NGOs, green coffee suppliers and the farmers/communities

AAA Program part of the brand DNA – not a one-off PR exercise

AAA is best practice in terms of Nestlé “Shared Value” CSR strategy

Defining communication style & tonality

With style and simplicity

As part of quality proposition “Sustainable Quality™”

Underlining connoisseur credentials

Credible, authentic, constructive

Romancing the countries of origin

Underpin brand advocacy

Inform, Inspire, Involve

Nespresso Magazine Announcement

Nespresso Magazine New Section Q & A on AAA

AAA Program Micro Website

Explore the World of Nespresso Grand Cru Coffees

Pages views since Nov. 06 1’226’189

Pages visitors since Nov. 06 354’778

2006 2007

Nespresso AAA Program Mirco Website

20’000

20’000

60’000

892’000 Mentions on Google AAA Sustainable Quality

Nespresso is inviting a group of 20 students

to go to the country of origin to learn more about AAA

quality coffee grown under sustainable conditions

AAA Summer Campus Syllabus for Students

Nespresso Magazine 6 AAA – Summer Campus

Media Amplification PhasingM

ed

ia C

ove

rag

e

• Club Member Comms (NMag Oct, website, boutique)

• Student and sustainability media (eg AIESEC, Gap Year)

• Media partnership supporting application and selection

Pre-event

• Real-time team media (eg eblogs, podcasts, travelogs)

• 20 key journalist visits and features

• Club Member Comms (eg website)

• Nespresso Magazine

During event

• Incremental news stories by non-attending media

• Student report project published in sustainability and coffee media

• AAA Forum presentation

• Club Member Comms (NMag, website)

• Other viral / word of mouth media

Post-event

Nespresso Magazine 7 AAA – The Ultimate Cupping

Regular updates to our club members on latest news

Double Honours/AAA Kenya

Building on the exclusive nature of the club concept

Quality and more as a long term communications

platform for Nespresso AAA

Feedback: www.nespresso-aaa-program.com