Nestlé Cocoa Plan

Progress report 2019

Introduction

Why it matters cocoa farming communities as well as input from civil

The Nestlé Cocoa Plan aims to help farmers address the society.
challenges they face through three pillars – better We engaged external parties to certify cocoa coming from
farming, better lives and better cocoa. Activities such as the NCP programme: UTZ (now the Rainforest Alliance)
training in better agricultural practices, distributing and Fairtrade.
higher-yielding plants, promoting gender equality and In 2012 we added a strong focus on child labour after we
tackling child labor help farmers to improve the quality of commissioned the Fair Labor Association (FLA) to
their products as well as their income and livelihoods. investigate the issue for us. In parallel we kicked off a
programme to build or refurbish 40 schools in four years
What we are doing in Côte d’Ivoire with the World Cocoa Foundation.
Through the Nestlé Cocoa Plan, we have announced we In 2013 with Oxfam’s encouragement we added a gender
will source 100% of the cocoa for Nestlé confectionery – component to the NCP. We also joined the Cocoa
around 300 000 tonnes per year – by 2025 and so will Livelihoods Partnership, partly funded by the Gates
continue our tonnage growth. This replaces our previous Foundation, which added a food component in the NCP.
objective of sourcing 230 000 tonnes of cocoa through the We were a founder of what was then the ‘Senior Leaders
Nestlé Cocoa Plan by 2020. Council’ and became ‘CocoaAction’, which helped to focus
our efforts on productivity and community development.
10 years of progress UTZ came on board to assess the impact of CocoaAction
We launched ‘the Cocoa Plan’ (as it was then called) in in the NCP. Today this work continues with the Rainforest
2009 in order to improve the lives of cocoa farmers and Alliance.
the quality of cocoa. At the time we made two In 2017 we joined the ‘Cocoa & Forests Initiative’,
commitments: plant 12m cocoa trees and spend 110m facilitated by IDH (the Sustainable Trade Initiative) and
CHF by 2019. the World Cocoa Foundation, adding a strong area of work
We completed our trees commitment a year early in 2018, around combatting deforestation and promoting
and in fact have now spent over double our original agroforestry.
commitment at 264m CHF. In 2020 we joined the CLEF (Child Learning and Education
Since its launch the Nestlé Cocoa Plan (NCP) has evolved Facility) coalition, convened by the Jacobs Foundation,
as we have gained a better understanding of the issues on designed to boost quality education in rural communities
the ground, through work with our partners, suppliers and in Côte d'Ivoire.
To contribute to the knowledge base on the issue in 2017
we released our first ‘Tackling Child labour’ report,
followed by the second in 2019. In 2020 we released our
first ‘Tackling Deforestation’ report.

First 10 years Summary table:

Cumulative cocoa plants Cumulative Spend Nestlé Cocoa Plan volume

distributed (m CHF) (tonnes)
2010 230 000 7.5 11 500
2011 1 040 000 18.8 31 200
2012 2 150 000 33.3 46 345
2013 3 220 000 50.4 62 299
2014 4 830 000 74.5 91 801
2015 6 540 000 105.6 121 000
2016 8 700 000 135.9 140 933
2017 10 990 000 177.6 186 722
2018 14 560 000 224.4 198 000
2019 15 270 000 264.5 183 000
2019 Review
d’Ivoire, Ghana, Cameroon and Indonesia was certified,
In 2019 the NCP covered over 109,000 farmers across and 16,000 tonnes of the Ecuador tonnage. Tonnage from
Côte d’Ivoire, Ghana, Cameroon, Indonesia, Brazil, Brazil was verified, and we will extend verification to
Ecuador, Mexico and Venezuela. We sourced over 183,000 Mexico. Verification, like certification, involves audits by
tonnes from these farmers. All the tonnage from Côte external companies but against our own standard.

Country Tonnes Percentage

Côte d’Ivoire 133 035 72.6 %
Cameroon 2 000 1.1 %
Ghana 15 000 8.2 %
Indonesia 6 220 3.4 %
Brazil 5 608 3.1 %
Ecuador 19 486 10.6 %
Mexico 1 452 0.8 %
Venezuela 560 0.3 %
Total 183 361 100 %

This report reviews our 2019 progress in five sections:

1. Better Farming
2. Better Lives
3. Better Cocoa
4. Key Performance Indicators
5. Perspectives for the future
BETTER FARMING
Better farming

Farmer income and productivity is as important as ever. performance and risk, track progress, and identify key
We continue to work with traders and cooperatives to help areas where further intervention is needed.
farmers improve how they farm, in order to increase yield In 2019 it covered 1050 farmers in Côte d’Ivoire out of a
and therefore income. We offer training to help them total of 75,000 UTZ certified farmers in the Nestlé Cocoa
reduce disease in crops, improve bean quality, rejuvenate Plan in the country.
plantations and manage sustainable land use. As part of
CocoaAction, an industry-wide strategy coordinated by the The average farmer is a male 46-year-old, with one plot
World Cocoa Foundation, we work with the Rainforest of 3 hectares, and with a yield of 578 kg/ha. He has been
Alliance to assess the impact of farming practices training in a sustainability programme for four years. 10% of the
in more than 30 certified cocoa coops in Côte d’Ivoire. This farmers are female. The graphics show the spread around
monitoring and evaluation helps us to understand overall the averages.

20 40 60 80 2 4 6 8 10
Farmer training
Training is mainly by farmer field school, which is a
practical and participative type of training for groups of
Yes 91%
farmers. We’re also increasingly using coaching
techniques, which involve farm visits and farm Male
development plans. Our CocoaAction survey found good No
participation in training from farmers in the Nestlé Cocoa
Plan, with a slightly higher percentage of men than women All
attending: Yes 86%
Female
No
Improving farming practices
We continued our focus on farmer coaching and pruning. It is good to see 79% of farmers using professional
So far, 729 farms have been pruned by our trained spraying crews to apply pesticides. This avoids children
pruning groups, which will result in increased yields and being involved, which would qualify as child labour.
incomes. Using these techniques our farmer
demonstration plots have shown up to a threefold
productivity increase. Our CocoaAction survey showed
that over half of farmers had access to pruning crews and
22% hired them.
We made further progress on distributing new, higher- profession. Farmers who have demonstrated willingness to
yielding cocoa plants to farmers in Ghana. In Côte d’Ivoire improve their practices are selected and are personally
the government does not currently allow companies to coached by a Nestlé agronomist and a lead farmer from
distribute improved planting material. the coop. They are taught about running a farm efficiently,
Age of cocoa trees on farms varied widely, with median at cash flow control, and spend planning. Results from the
15 years and with 24% trees over 25 years old. first 50 farmers in the programme show they are
developing well. In order to quantify this better and
understand how to extend the learnings to a greater
number of farmers we have teamed up with the Royal
Tropical Institute in the Netherlands (www.KIT.nl).

Entrepreneurship in Agriculture: ‘Agripreneurship’

training

We’re supporting the development of professional farmers

to demonstrate that cocoa farming can be a rewarding
Good Agricultural Practice adoption
Our key outcome KPI, overall adoption of good agricultural
practices (GAP), increased from 21% to 28%, according to
CocoaAction definitions. The definition is 4 out of 5 GAPs
including pruning have to be carried out well. Each GAP is well
defined and enumerators trained by WCF to ensure comparable
results between companies.*

We had good results for both pests and diseases and harvest
management. It was surprising to see weeding rather low: the
bar is high on this and each observation point needs to be
perfectly weeded to make the score. Shade management
improved since 2018 but is not yet good enough, this will be
helped by our shade tree distribution programme. Soil fertility is
a concern in much of the cocoa growing area. With the
cost/benefit of fertilizer not always proven, especially if good
agricultural practices are not followed, it’s not surprising to see
a relatively low adoption rate of 38%. Of this, 21% was organic
fertilizer. This doesn’t include practices like returning cocoa pods
to fields as organic matter.

* Some methodologies changed so figures are not perfectly comparable. For future
years we have agreed with the Rainforest Alliance to continue on the CocoaAction basis
but refine according to our needs. In particular we will change the pruning score to
reflect what we are teaching as best practice.
The results of these practice adoptions are not as clear relationship with more GAPs implemented equaling
cut as we would like to see, but there is still a higher yields:

Tackling deforestation
Deforestation remains a major issue in cocoa regions, in
particular in West Africa. Nestlé continues to be part of the
Cocoa & Forests Initiative to combat this. We distributed
over 420 000 shade trees globally in 2019 and completed
the mapping of 75% Nestlé Cocoa Plan farmers in Côte
d’Ivoire and Ghana. Read about our approach to
deforestation in cocoa in our 2020 Progress Report.
BETTER LIVES
Better lives

Tackling child labor classes, helping at-risk children reintegrate into normal
In 2019, we released our second report on ‘Tackling Child schools.
Labor’, providing further insights into the progress made
in the implementation of our Child Labor Monitoring and Overall, we have almost doubled our outreach in the last
Remediation System (CLMRS) in Côte d’Ivoire. By the end two years to include 78,580 children across 1751
of 2019, we had identified more than 20,000 children in communities, with 1640 Community Liaison People
child labor through the CLMRS. Our findings illustrate the monitoring the children. The report shows that since
deep-rooted nature of the issue, which go far beyond our CLMRS was launched in 2012, benefits have included:
own supply chain. It also demonstrates the effectiveness ▪ 593,925 people attending awareness-raising sessions.
of our system in identifying them – without which they ▪ 87,925 children within and outside our supply chain
cannot be addressed – and in effectively tackling them receiving prevention or remediation support.
through remediation activities, such as providing birth ▪ 78,580 children being monitored, with 18,283 found to
certificates and access to education. The CLMRS means be in child labor.
that Nestlé can assess the magnitude of the issue of child ▪ 49 schools being built or refurbished, benefiting 20,000
labor in the supply chain, address these and report on our children.
actions. The Tackling Child Labor report is part of our ▪ 1225 children benefiting from tutoring.
efforts to be as transparent as possible about the issue, ▪ 19,152 school kits containing essential equipment being
the causes, the actions we take to address it and the provided to children.
challenges that remain. ▪ 5756 birth certificates being issued.
▪ 62 children enrolling in vocational training.
The number of children leaving child labor – being free ▪ 979 women benefiting from the maternal literacy
from carrying out hazardous tasks across two inspection program, which helps them to better support their
visits in six months – increased to 2459 (29% of children families.
who have received two visits) in 2019. Our focus on
quality education saw four more schools refurbished or In Ghana the number of farmers in the CLMRS remained
built to make a total of 49 since 2012. We maintained our constant as the roll out with our second supplier did not
cooperation with the Jacobs Foundation with bridge happen as rapidly as we expected.
Helping cocoa communities save
Many individuals, communities and villages in cocoa- We are very encouraged by activities undertaken by co-
growing areas find it difficult to save money. We are ops in the Nestlé Cocoa Plan. These include assisting
supporting efforts to help them through a community women in food crop production, such as cassava, plantain,
approach. The Village Savings and Loans Association aubergine and chilli, and in raising livestock. They’ve
(VSLA) scheme openly ensures that everyone can see how helped increase women’s income with primary product
much money is paid into a secure box and see it going out processing including cassava grinding. VSLAs help women
if someone needs assistance. At the end of each annual save and provide loans for small business opportunities.
cycle, accumulated savings are distributed back to So far 6690 women have been involved in these activities.
members, with interest.
This demonstrates that communities can save and provide The percentage of women farmers in our supply chain has
support to individuals when needed, creating trust and remained constant at 7%. However, two figures have
bringing the community together. It also enables people increased:
to save for bigger purchases or to start their own business. - The percentage of land they own has increased
Once trained, the communities can run the funds from 7% to 12%, and
themselves, enabling the whole village to become more - Women in decision making positions in coops has
resilient. increased from 8% to 17%.
Currently, 3000 farmers within the Nestlé Cocoa Plan are This last figure is particularly encouraging as it is
participating in VSLAs, with between 15 and 25 in each something we have emphasized in our gender awareness
community association. raising course for Nestlé Cocoa Plan coops. Women
employees of coops is at 24% and is a figure we haven’t
Increasing gender awareness in Côte d’Ivoire tracked before. Clearly there is more to be done and will
The Nestlé Cocoa Plan is raising the issue of gender take time and perseverance.
equality in our cocoa supply chain. Targeted at co-
operatives, a three-day gender awareness program aims Gender in Ghana
to start changing attitudes toward gender. Sessions We have helped create VSLAs and combined them with
include personal gender awareness, as well as the Gender Action Learning at Scale (GALS) training. Together
development of an action plan for each participating co- these champion issues of gender empowerment,
op. awareness raising with the objectives of deepening
financial inclusion, financial literacy and providing the
tools needed for gender inclusion.
GALS uses tools such as the Gender Balance tree, which
enables households to recognize gender injustice as an
obstacle to their shared vision for a better life. GALS helps
households to recognize each other as allies in joint
efforts. Women particularly are empowered to articulate
issues, discuss them constructively and make explicit,
shared decisions. A total of 224 women are benefitting
from GALS training.
We have taken special interest in increasing women
trainers and women in decision making with the aim to
increase women participation and representation. The
percentage of women farmers is approximately 28% while
the percentage of women in decision making has
increased from 8% in 2017 to 11% in 2019, still low but
heading in the right direction. The coaching women to take
up leadership positions will have contributed to this
increase.
BETTER COCOA
Better cocoa

Volume certification audits and despite assistance were unable to

The volume of cocoa purchased through the Nestlé Cocoa pass re-audits. This is unfortunate both for the farmers
Plan decreased in 2019, mainly due to contract roll over and for Nestlé, however a stronger system built on trust
from the previous season. We expect 2020 to be similar and transparency will ultimately provide a higher level of
to the past two years, then we’ll ramp up towards our assurance, and is in the interest of the long-term
100% NCP target for all cocoa in our confectionery credibility of certification.
products by 2025.

Farmer cooperatives
Long term relationships with farmer co-operatives is key
to the Nestlé Cocoa Plan. It is vital that these co-
operatives function well, in trading cocoa as well as
providing services to their members and the communities
they work in. Together with our suppliers we help and train
coops manage their business better. We are happy that
the average time coops have been with us is now 6 years.

Certification challenges
Following the merger of UTZ and the Rainforest Alliance,
a new Rainforest Alliance certification programme is being
developed with more stringent requirements for both
certified cooperatives and the third-party auditors we
work with. In 2019, some of our co-operatives failed
Key Performance Indicators (KPIs)

Better farming

Activity KPIs Country 2017 2018 2019

Number of farmers in Nestlé Cocoa Plan Global 99 629 114 460 109 748
Number of improved cocoa plants distributed Global 2 282 600 3 569 363 950 534
Number of shade trees distributed globally Global n/a 151 414 420 529
Outcome KPIs
% farmers applying good agricultural practices Côte d’Ivoire 9% 21% 28%

Better lives

Activity KPIs Country 2017 2018 2019

Number of co-ops/farmer groups in Child Labor
Côte d’Ivoire 95 89 87
Monitoring and Remediation System (CLMRS)
Number of farmers in CLMRS co-ops Côte d’Ivoire 65 486 67 074 73 248
Cumulative total of full-size schools built or refurbished Côte d’Ivoire 43 45 49
Cumulative total of bridge classes built Côte d’Ivoire 30 55 98
Cumulative number of children benefiting from
Côte d’Ivoire 87 925
remediation activities (direct and indirect)
Cumulative number of children supported with education
Côte d’Ivoire 11 060 19 072 44 665
activities
Number of farmers in CLMRS Ghana n/a 2859 2859
 Activity KPIs Country 2017 2018 2019
Number and % of children benefiting from support with 1107
Ghana n/a n/a
education activities (direct and indirect) 78%
224 279 382
Number and % women farmers in VSLAs Ghana
47% 43% 36%
Outcome KPIs
11 891 17 590 18 283
Number and % of children participating in child labor Côte d’Ivoire
18% 21% 23%
11 130 15 740
Number and % of child labor cases followed up/assisted Côte d’Ivoire 6346 53% 86%
63%
Number and % of children no longer in child labor (%
477 981 2459
expressed out of number of children with two or more Côte d’Ivoire
3% 5.6% 29%
visits)
6091
Number and % women farmers in NCP coops Côte d’Ivoire n/a
7% 7%
Number and % women in decision making positions in 90
Côte d’Ivoire
NCP coops 8% n/a 17%
1496 1416
Number and % of children participating in child labor Ghana n/a
60% 58%
1210 668
Number and % of child labor cases followed up/assisted Ghana n/a
81% 60%
Number and % of children no longer in child labor Ghana n/a 0 0
4566 5172 5030
Number and % women farmers in NCP Ghana
28% 29% 28%
Number and % women in decision making positions in 43 54 66
Ghana
NCP 8% 9% 11%
Better cocoa

Activity KPIs Country 2017 2018 2019

Volume of Nestlé Cocoa Plan cocoa (tonnes) Global 186 358 198 155 183 361
Nestlé Cocoa Plan cocoa as % of total Nestlé cocoa Global 42.9% 49% 44%
Outcome KPIs
Average number of years co-ops have partnered in Nestlé
Côte d’Ivoire 6
Cocoa Plan

Nestlé Cocoa Plan costs (’000 CHF)

Item 2017 2018 2019

Research and development, planting material distribution 3625 6105 6614
Global co-operation, e.g. WCF CocoaAction 1604 1405 1048
Nestlé Cocoa Plan projects 842 346 230
Child labor monitoring and remediation system, and school-building 4482 4860 3350
Farmer cash premium 9299 12167 8776
Co-op premium, certification, training and other costs 21901 21937 21447
Total 41752 46821 41466
Perspectives for 2020 Child labour and CLMRS performance
Our ‘Tackling Child Labour’ report covered some specific
Focus on Living Income challenges including interesting thought pieces from our
While we have made progress in addressing cocoa guest writers Dr Kristy Leissle and Amanda Berlan, who
sustainability issues, the main issues of household mentioned moving beyond a binary view of child labour,
poverty, child labour and deforestation continue in the and including children’s voices in considering how to deal
sector. with child labour.
We strongly believe cocoa farmers should earn an income We will implement the CLMRS in all our sourcing from
that allows them to maintain a decent standard of living West Africa by 2025. We will also continue to extend the
for them and their families. This is why we support the system to more farmers in Côte d’Ivoire and Ghana,
efforts by the governments of Côte d’Ivoire and Ghana to innovate with our remediation and to continue to follow up
improve the standards of living for cocoa farmers and child labourers we have found. We continue our focus on
were one of the first companies to buy 2020/2021 cocoa education with bridge schools, school kits and improving
teaching quality. We will take up the suggestion to seek
with the Living Income Differential (LID). The LID, which
children’s views.
adds USD 400 to the price per tonne of cocoa, will go some
We have recently joined the Child Learning and Education
way to helping through increasing the cocoa price for all Facility (CLEF) coalition to boost quality education in rural
users of these two origins. communities in Côte d'Ivoire. The CLEF coalition is a
In addition, to strengthen our work on Living Income, we pooled financing facility, and the first public-private
have started working with the Royal Tropical Institute in partnership focused on scaling investments for quality
the Netherlands (‘KIT’) to help us evaluate our work on education in Côte d'Ivoire.
Better Farming and assist more farmers make a living
income from cocoa as their primary activity. We will Protecting and restoring forests
publish our progress as we go along, sharing with pre- We will accelerate our work as part of the Cocoa & Forests
competitive platforms. Initiative, distributing more shade trees and kicking off
Our focus on pruning continues with more groups trained two agroforestry projects with PUR Projet. Agroforestry is
and equipped. We will continue to re-invigorate farmer one of the nature-based solutions we are deploying with
training with the use of video and digital technology the objective of transforming our supply chains in a way
alongside traditional field sessions. that makes them more resilient and climate-friendly. This
will help absorb more carbon, improve soil health and
enhance biodiversity and will ultimately contribute to our COVID-19
2050 net-zero pledge. We will also continue to work with At the time of writing, COVID 19 has created an
the governments of Côte d’Ivoire and Ghana, our partners unprecedented crisis across the world. The virus has
and other stakeholders to help protect and restore started spreading in the main cocoa origins, which have
protected forests and promote sustainable cocoa and bought in hygiene and social distancing rules. We have
thriving communities. suspended operations which could contribute to spreading
the disease and focused on educating communities on
Cooperation with others prevention. In such circumstances already vulnerable
CocoaAction, the Cocoa & Forests Initiative and CLEF are people are even more at risk. Within our CLMRS our
all good examples of how the industry can make progress community facilitators will continue to watch out for
faster and at scale by cooperating and working together children and provide assistance. Nestlé has donated 10m
and with others including government and civil society. We CHF to the International Federation of the Red Cross
will continue to work with the World Cocoa Foundation, Societies for COVID 19 work, including cocoa growing
International Cocoa Initiative, IDH, the Rainforest communities.
Alliance, and others to find these sweet spots of
cooperation.