Nestle Nespresso

a) The main facts about the activities of the company.

Nestle Nespresso SA, the worldwide pioneer and market leader in highest-quality premium portioned coffee, introduces consumers to the world?s finest Grand Cru coffees to be enjoyed in the comfort of their own homes and savored outside the home, in locations such as gourmet restaurants, upscale hotels, luxury outlets and offices. As a company, Nespresso is driven by core competencies that enable it to create highest quality Grand Cru coffees, long lasting consumer relationships, and sustainable business success. The Nespresso offer focuses on its unique Trilogy, the unmatched combination of exceptional coffee, smart and stylish coffee machines and personalized customer service. Together, these three elements deliver moments of pure indulgence ? the Nespresso Ultimate Coffee Experiences. Headquartered in Paudex, Switzerland, with more than 4 500 employees, Nestl?? Nespresso SA sells products in more than 50 countries directly to its customers.

b) The ethical challenges this company is addressing.

We address the ethical challenges in 3 aspects, which are supplier or farmer, environment and customer. Before Nestle launches Nespresso, it has many problems with the inequality trading of coffee

There are 3 aspects of ethical challenges this company is addressing
First of all, the farmers tragedy life.
The agriculture of coffee plant is full of tears and blood. The famers live in a very poor and hard life and don’t know how to grow them efficiently.
There are lots of countries in the world are growing coffee plant.so the price of purchasing from the farmers are depressed severely. The farmers are exploited and live in a very bad condition. When all the companies purchasing coffee products in very low price, it is equal to squeeze the farmers.

Second is the serious environment problem.
Because people think that plant coffee can make money, so in many places farmers grow coffee trees like a swarm of bees. But they don’t know how to grow it scientifically, and to use proper fertilizers and pesticides. They dump wastes into the river and even pollute the air. And the bottles which contain coffee powders will also polluted the air. So if the company purchase the coffee bean without taking actions to protect the environment, it?s not responsible for the whole society.

The last challenge is to the customers.
Because the qualities of products are not stable, so it cannot make the best coffee for their customers in a high price. They couldn’t sell the second at the best price. So they had to find their way to solve the problem.

c) What makes you believe this company is really ethical and why you trust it.

1). Farmer
The main focus of this program is to help farmers achieve the very highest quality of coffee that serves both to help Nespresso accomplish its mission of delivering coffees of supreme quality, while at the same time helping to improve the standard of living for farmers and their families and conserving the natural environment. This program is distinctive in that it adds a quality dimension to the sustainability principles (economic, social and environmental) and in that it works with the entire supply chain.
So, the Nespresso AAA Sustainable Quality Program aims to:
Stabilize the supply chain and safeguard the long-term supply of highest quality coffee
Share the value created by the business model with strategic actors in the value chain
Improve the quality of life of farmers and their communities
In May 2009 Nespresso strengthened its commitment to sustainability by announcing that Nespresso AAA farms will now work towards Rainforest Alliance Certification?. This certification, based on the SAN standards, helps farmers mitigate coffee market volatility in the global market by giving them the keys to improved farm management and gain access to premium markets. By implementing the certifications sustainable farm-management system, farmers can control costs, gain efficiencies, improve crop quality and increase yields.

2). Environment
Farming practice to help environment
Shade trees: 
Good soil is fundamental to growing healthy coffee plants. Soil fertility can be improved through the promotion of coffee production under shade trees. The trees bring various benefits, including protecting the soil from heavy rainfall, which can cause erosion and depositing organic matter, which increases soil fertility. Planting shade trees also helps to maintain the highest quality coffee, because the trees provide optimal growing conditions for coffee. The coffee grows naturally, as primitive plants would have done in the wild and the cherries are shielded from the intense tropical sun.

Fertilization
: Additional nutrients may be added to the soil to optimize the conditions for growing healthy plants that produce the highest quality coffee. As part of the AAA program, farmers are encouraged to use farm-produced organic fertilizer such as fermented pulp mixed with animal manure, the branches and leaves cut from the coffee and shade trees and other available organic materials. After soil analysis, this is strongly recommended by the AAA program. However, supplementary nutrients can be used to maintain healthy coffee trees and a steady production of high quality cherries.

Integrated pest management
: IPM is an integrated approach to crop management that aims to significantly reduce or eliminate the use of pesticides. At the same time, IPM helps farmers to manage pest populations at an acceptable level.

3). Customer
Focus on Quality: Nespresso focused on generating premium coffee, not letting their sustainability efforts overshadow the need for high-quality product. Moreover, when customers talk about quality they mean the total product experience including sensory experience and their appreciation of the ethical production.

d) The possible challenges facing the company in the future and how you think this company may improve.

According to the goals until 2013 which proposed by Nespresso, Nespresso will face to a few challenges in the future. The challenge including how to guarantee the stable and high quality coffee bean and how to improve the capsule will be the most important issue. And there are also some challenges from the competitors. For instance, the Swiss-based Ethical Coffee Company, run by former top Nespresso executive, is ready crank up of its production of biodegradable single-use coffee pods which is more environmental and facilitative for the customers. Facing these challenges, Nespresso can improve them as below:

Stabilize the long term souring from AAA farmers through innovative pricing mechanisms and build long term farmer loyalty with breakthrough customer service.
Drive optimal yield and quality through new varieties
continue to hold AAA Sustainable Quality? Coffee Forum with the worldwide pioneer and market leader in highest-quality premium portioned coffee.