Nestlé unveils €1.25bn plan to support cocoa growers

Investment aims to enhance ethical credentials of food giant’s chocolate business

Swiss food giant Nestlé has unveiled a €1.25 billion programme to enhance the ethical credentials of its chocolate business.

The initiative announced on Thursday, aims to improve livelihoods of cocoa-farming families in the African states of Côte d'Ivoire and Ghana, while also advancing sustainable practices and gender equality. It will tackle issues including child labour, enhancing family-farm income and scaling-up regenerative agriculture in cocoa production up to 2030.

The two countries account for more than 50 per cent of the world’s cocoa supplies. Chocolate accounts for around three-quarters of Nestlé’s confectionery business with sales of around 5.2 billion Swiss francs (€5 billion).

A cash incentive of up to €481 will be paid directly to cocoa-farming households for certain activities such as enrolment of children in school in its first two years, the company said. Thereafter, it will be paid at €240 per family.

The scheme will also reward agroforestry activities to increase climate resilience, like planting shade trees; and income diversification through for example through growing other crops, raising livestock such as chickens, beekeeping or processing other products like cassava.

Sustainable farming

The funding amounts to a trebling of the current annual investment by the world’s largest fast moving consumer goods company on transitioning to more sustainable cocoa farming.

The company said the incentives were on top of premiums Nestlé pays for certified cocoa, which is independently audited against the Rainforest Alliance sustainable agriculture standard.

Cocoa-farming communities face major challenges including widespread rural poverty, increasing climate risks and lack of access to financial services and basic infrastructure like water, healthcare and education. These complex factors heighten risk of child labour on family farms.

"Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time," said Nestlé chief executive Mark Schneider.

Payments

Payments will be delivered via a secure mobile service transfer to ensure traceability directly from Nestlé suppliers to the intended recipient.

The programme will be expanded for the 1,000 Côte d’Ivoire farmers who took part in a pilot scheme in 2020 to include 10,000 families in the country, before extending it to Ghana in 2024. Nestlé intends to to reach all cocoa-farming families in its global cocoa supply chain by 2030.

The company says it will introduce a range of products with cocoa sourced from the programme, starting with a selection of KitKat products in 2023.

"By increasing traceability at scale, we will help build consumer trust in our products and respond to the growing demand for responsibly and sustainably sourced cocoa," said Magdi Batato, executive vice-president and head of operations.

Nestlé has more than 70 brands in the Irish market across its range of beverage, confectionery, cereal, food, petcare, dairy and infant nutrition brands. It has an infant formula manufacturing site at Askeaton, Co Limerick, and employs more than 700 people here.