It all began over a cup of coffee. As many things do when CIMS is talking to Nespresso about how best to source sustainable supplies of the finest green coffee in ways that really create shared value. But this time, it was a little bit different. Most plans have a three to five year horizon, if that, but this time the discussion was more fundamental.
The Nespresso brand is growing strongly, coffee productivity in one of its main sourcing countries, Colombia, is suffering, and anytime Nespresso managers or CIMS researchers visit the farmers who supply the beans, you can’t help but notice that they’re getting older. Many of their children, like others around the world, are voting with their feet and heading for the cities to find a higher income and an easier life.
Price volatility, climate change, falling productivity and the persistent cycle of poverty in which many small producers are trapped, have created an unsustainable situation for both the smallholder farmers and the companies that depend on them.
Nespresso and CIMS have worked together for over five years across six coffee- producing countries, assessing the situation at farm level, identifying the key drivers behind farm incomes, looking at ways to incentivize farmers to invest in their farms so that productivity, quality, and ultimately incomes, can all be raised.
But the question over coffee was, with this perfect storm of challenges, will we still have a sustainable supply of coffee in twenty or even thirty years time, and what do we need to do to make that happen: for the farmers, for Nespresso, and for coffee lovers everywhere?
So, since this is fundamentally a next generation issue, Nespresso and CIMS decided to ask the next generation what they thought: by inviting the brightest young business students around the world for their ideas on how to secure a long-term supply of premium coffee that would ensure a long-term viable business for the Colombian farmers and their communities. With our focus on small-holder farmer livelihoods, and our base at INCAE in Costa Rica (Latin America’s leading business school) we were well placed to devise a case study challenge that MBA students around the world would want to tackle.
“CIMS and INCAE have been working with Nespresso and its partners for several years to better understand value chains for high quality coffee and to develop strategies that ensure that their tens of thousands of smallholder suppliers share in the value created.” says Lawrence Pratt, founder of CIMS and a professor at INCAE business school. “Engaging top-flight management students provides a unique opportunity to look at this very complex business environment with fresh eyes: who better to think about and propose creative strategies for the next business generation, than the next business generation?"
Thirty-two teams from twenty countries have risen to the Nespresso MBA Challenge, including top business schools in the US, Europe, China, India, Israel, South Africa, Australia and Latin America. By involving students from such different cultures and perspectives, Nespresso, CIMS and INCAE are hoping for some well thought out proposals that could really contribute to a breakthrough on sustainable coffee sourcing.
“If the economic sustainability of smallholder farmers is not addressed now, the negative impact of reduced production in the future could be devastating; not enough food for an increasing global population, and conflict due to low food resources, are just two examples‘’, says Collin Manickum, a student at the University of Stellenbosch in South Africa, one of the schools taking part in the challenge. “I believe that the ideas originating from the sustainability challenge won’t be restricted to the Colombian coffee industry, but could be applied to improve the sustainability of small farms, growing other agricultural crops, around the world.”
The case study was released in early March and students had two weeks to come up with their proposal. The three finalist teams will present their proposals to an international judging panel of leading sustainability experts and senior Nespresso executives at the company’s headquarters in Switzerland in June. The winners will travel to a coffee producing country to learn more about the coffee supply chain and present their ideas to key stakeholders, farmers and others involved in the supply chain on the ground.
“Nespresso has recognized for some time that its requirement for a long term sustainable source of high quality green coffee is intrinsically linked with the farmers’ own need to improve their long term economic prospects, as well as with a wider need to improve the effectiveness of coffee farming in sustaining natural resources”, said Jérôme Perez, Head of Sustainability at Nestlé Nespresso SA. “With the Nespresso MBA Challenge, we hope to tap into fresh and bright ideas from young talented minds from all over the world to strengthen our AAA Sustainable QualityTM Program and define new ways of sourcing sustainable quality coffee in the future, for the benefit of all.”
For the team at CIMS, this is proving to be an interesting experience. “It’s challenged us to frame complex issues involved in the coffee supply chain in a way that allows students to explore them with the rigor demanded in the academic world, and come up with ideas that can work in the real world. This is the environment that CIMS inhabits daily, and we’re hoping the challenge plays its part in helping us deliver our mission to improve the lives of smallholder farmers,” said Liza Lort-Phillips, Executive Director of CIMS.
Check back for updates and reporting on our winning team’s idea. Who knows? If they’re that good, we might have to hire them ourselves here at CIMS...
For more information and the backgrounder to the case study go to