Opportunities and challenges in the coffee sector
Philippine demand for coffee has grown steadily over the years, with many Filipinos consuming the beverage as part of daily routine. And because millions of Filipinos are avid coffee drinkers, there are opportunities for coffee farmers to increase production in order to meet demand. Consumption increases by over eight percent each year, with the trend expected to continue.
At the same time, the sector faces challenges that include climate change, shrinking arable land areas, and low returns.
In addition, growing demand, apart from local production, is met by significant imports of raw coffee. Finished coffee products are also imported into the country.
“As we consider these challenges, there is clearly a need to help farmers increase local coffee crop production, and for consumers to support them directly by buying locally manufactured coffee products,” Nestlé Philippines Chairman and CEO Kais Marzouki said.
Supporting thousands of coffee farmers through the NESCAFÉ Plan
Nestlé Philippines, as the largest local coffee buyer in the country, continuously pursues initiatives seeking to better the lives of Filipino coffee growers. For decades, the company has nurtured a close relationship with coffee farmers by extending assistance such as training, having started manufacturing NESCAFÉ locally in 1962. The training has included teaching farmers sustainable farming practices.
In 2010, Nestlé globally launched the NESCAFÉ Plan – the biggest coffee sustainability program in the world. Locally, the program seeks to increase the supply of Robusta coffee. Through the program, Nestlé Philippines provides farmers with sustained technical assistance on coffee production, helping them increase their yields and incomes. In 2018 and 2019, Nestlé Philippines trained an average of 6,000 Filipino farmers each year.
As a more recent result of the NESCAFÉ Plan, Nestlé Philippines’ local buying of Robusta coffee beans for this crop year (2019-2020) increased by 27 percent over the previous crop year, higher than originally expected as local crop yields have been better than forecast.
Public-private sector collaboration to help coffee farmers
Under the NESCAFÉ Plan, Nestlé Philippines launched Project Coffee+ in 2018. The project, in partnership with GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH, or the German Agency for international Cooperation GmbH), aims to increase the yield of 1,500 participating coffee farmers in Bukidnon and Sultan Kudarat in Mindanao to one metric ton per hectare over three years.
The participants are receiving training in farming best practices and sustainability, as well as capacity building to transform them into agripreneurs. Significant increases in crop yields and incomes have been achieved.
The NESCAFÉ Plan goes hand in hand with the government’s support for local coffee farmers. Through components of the program, such as the propagation of better-yielding coffee plantlets in past years, Nestlé Philippines participates in synergies between the public and private sectors for the continuing development of agriculture in the country.
“In celebrating International Coffee Day, we are reminded to support our local coffee farmers who are laboring hard in the hope of improving their families’ lives. And buying locally manufactured coffee products is a concrete way to help them,” Mr. Marzouki said.