Communicating Sustainably

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1 Communicating Sustainably Ramacafé, Managua September Dean Sanders Director of Sustainability Nestlé Nespresso

2 To cover Establishing the need and the opportunity Exploring the principles and some other company examples Sharing our approach

3 To cover Establishing the need and the opportunity Exploring the principles and some other company examples Sharing our approach

4 To consume Oxford English Dictionary To destroy, to squander, to use up, to deplete

5 Current levels of consumption are not sustainable

6

7 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

8 So what s the challenge? To facilitate and enable the transition from an unsustainable wasteful consumption towards a new form of sustainable consumption

9 Business and society are in transition from the consumer society Shareholder Value Communications Industry Deliver $$ Drive consumption The Corporation Supply Chain The Consumer Drive lowest cost Consume more

10 to the sustainable society Shareholder Value Communications Industry Social, economic, environmental The Corporation Drive sustainable consumption, build brand social equity Supply Chain Anti-social practices a source of reputation risk The Stakeholder The Consumer Consume sustainably

11 What should companies pay attention to in the next few years? Source: Ipsos MORI June 2007, All British Public

12 Sustainable consumption is growing Organic 40% $14,000,000, $12,000,000, $10,000,000, $8,000,000, $6,000,000, % 30% Organic 2004 Organic 2005 $4,000,000, $2,000,000, $500,000, $450,000, $400,000, $350,000, $300,000, $250,000, $200,000, $150,000, $100,000, $50,000, $- Fairtrade 60% 35% 23% Germany UK USA $- Germany UK USA Fairtrade 2004 Fairtrade 2005 Source: Fairtrade Labeling Organizations. Annual Report Organic Trade Association, Soil Association, IFOAM

13 To cover Establishing the need and the opportunity Exploring the principles and some other company examples Sharing our approach

14 The principles and practices for success Beliefs and values Product and practices Communication

15 Knowing who you are and gaining insight into changing social patterns Beliefs and values Product and practices Communication

16 We believe that everyone is beautiful

17 We believe in treating people and the environment with respect

18 We believe in wellbeing

19 Informing operations with beliefs Beliefs and values Product and practices Communication

20 Supply chain realignment

21 Economic transparency and traceability

22 Independent validation

23 Efficiencies for the consumer

24 Disruptive innovation signalled on pack

25 Bringing beliefs and practices to life for stakeholders Beliefs and values Product and practices Communication

26 With honesty

27 Democratically

28 With humour

29 In the right tone for the right brand

30 Not forgetting quality

31 To cover Establishing the need and the opportunity Exploring the principles and some other company examples Sharing our approach

32 Our ambition To be the icon for perfect coffee worldwide

33 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 coffees Smart, stylish and award-winning coffee machines Personalized 24x7 service for our Club Members

34 Nestlé Nespresso manages the value chain from cherry to cup Nespresso - Passion for Perfection Unmatched experts for roasting & grinding Highest quality green coffee 24/7 personal service Within 48 hours delivery Exclusive boutique network Best machines, high innovation & emotional design Great variety, convenience & guaranteed freshness Superior capsules/quality Best in-cup quality (60/40)

35 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

36 What Does «AAA» Mean? AA Highest Quality A Sustainability AAA Sustainable Quality

37 Nespresso AAA Sustainable Quality Program 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 To know more about - and to share more what we know about - highest quality coffee cultivation and sustainable practices Leveraging the value of AAA Program to bring the consumer closer to origin and to make the AAA Sustainable Quality Program more tangible

38 What Have We Done? Pilot phase pre 2003 Engaged multiple stakeholders Developed and tested the Tool for the Assessment of Sustainable Quality (TASQ ) Involved farmers in 9 regions in 5 countries Currently 30% of all our coffee sourced through the AAA Program Target 50% by 2010

39 A unique sustainable quality assessment tool tailored to our business model

40 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

41 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

42 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

43 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

44 AAA Program Stakeholders

45 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

46 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

47 Nespresso Magazine Announcement

48 Nespresso Magazine New Section Q & A on AAA

49 AAA Program Micro Website

50 Explore the World of Nespresso Grand Cru Coffees

51 Nespresso AAA Program Mirco Website Pages views since Nov Pages visitors since Nov

52 Mentions on Google AAA Sustainable Quality

53 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

54 AAA Summer Campus Syllabus for Students

55 Nespresso Magazine 6 AAA Summer Campus

56 Media Amplification Phasing Media Coverage Club Member Comms (NMag Oct, website, boutique) Student and sustainability media (eg AIESEC, Gap Year) Real-time team media (eg eblogs, podcasts, travelogs) 20 key journalist visits and features Club Member Comms (eg website) Incremental news stories by non-attending media Student report project published in sustainability and coffee media AAA Forum presentation Club Member Comms (NMag, website) Media partnership supporting application and selection Nespresso Magazine Other viral / word of mouth media Pre-event During event Post-event

57 Nespresso Magazine 7 AAA The Ultimate Cupping

58 Regular updates to our club members on latest news Double Honours/AAA Kenya

59 Building on the exclusive nature of the club concept

60 Quality and more as a long term communications platform for Nespresso AAA

61 Feedback:

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