Nestle commits to Zimbabwe, explores new investment opportunities

August 5, 2022

Luke Gomes (LG), was last month appointed cluster head for Greater Zambezi Region,  one of the three clusters within Nestlé Eastern and Southern Africa Region.

He sits at the centre of operations in five countries, Zimbabwe, Zambia , Malawi, Mozambique, Comeres and Madagascar.

 

In his first interview with a local newspaper since taking over the hot seat at the cluster and also serving as the managing director for Nestle Zimbabwe, LG tells Business Times correspondent, Hillary Munedzi (HM)  that the food giant remained committed to Zimbabwe and was exploring new investment opportunities in the country.

He also talks about agriculture projects the company is undertaking across the country , the Honde Valley coffee project and  many other issues.

Below  are excerpts from the discussion.

 

HM:. You assumed  your new role  as Cluster Head  for the Greater Zambezi Region and also  as the managing director of Nestlé Zimbabwe, how committed in the Swiss-headquartered food giant to Zimbabwe operations  given the severe headwinds  bedeviling companies in the country?

LG: We have made significant strides on our commitment to the future of Zimbabwe.The most recent major investment was in 2020 where we invested US$2.5m into expansion of a new cereals manufacturing line that added 30% additional volume to our cereals plant.

We have to date fully utilized the additional capacity that we got through installation of the new line hence we are already exploring opportunities for further investment to generate more capacity.

HM: Nestle is pursuing a project called MyOwnBusiness (MYOWBU), which seeks to empower women in Zimbabwe with the opportunity to start and sustainably run their own businesses by becoming sub-distributors for Nestlé. How successful has  the project been in light of the current global economic challenges being experienced?

LG: The initiative was launched in 2019 as a pilot within one of the neighborhoods in Harare. We started off with 29 participants and it has grown to almost 250 participants.

In 2020, the initiative was rebranded Zimbabwe Women Empowered in Zimbabwe (ZIWEB) and we now have active participation in places other than Harare, including Mutare, Bulawayo, Kwekwe, and Gweru.

The initiative has now developed into a sustainable route to market for our products such as Nestle cremora and cerevita being distributed through this network.

HM:  What other programmes are you implementing in promoting empowerment in communities and societies that you serve?

LG: Nestlé Zimbabwe fosters agripreneurship among the numerous farming partnerships it has to create economic opportunities and exert positive social impact in rural communities.

The Nestlé Dairy Empowerment Scheme (NDES) established in 2011 is a major highlight of Nestle’s thrust to ensure sustainability in the dairy sector by supporting farmers with dairy heifers, milking cows, equipment to effectively implement their farming activities as well as advances to purchase stock feed.

HM:  What strides  have you made to empower   communities through the Nestlé Diary Empowerment Scheme (NDES) for commercial farmers especially the small scale farmers?

LG: We have extended our small-scale farmer networks to three institutions that are Chitomborwizi, Watershed, and Agroprosperity Trust with a total of over 70 individual farmers since 2015, when we established the first small scale farmer network in Chitomborwizi.

 

To maintain agricultural sustainability, we have provided  several low-cost models for small-scale farmers including pasture and silage support to reduce commercial feed requirements which accounts for over 65% of the production cost, solar powered boreholes to address water challenges for irrigation of pastures  and maize for silage ,the establishment of milk collecting centers through the provision of cooling tanks and the solar powered cooling system to reduce reliance on electricity and diesel for power generation.

Looking into the future, the Nestlé East and Southern Africa Region (ESAR) Innovations, ESAR water fund and responsible sourcing platforms form part of Nestlé ESAR RE sustainability initiative which focuses on the pillars of rethink ,reduce and repurpose.

These are aimed at ensuring sustainability on water, energy, animal welfare and good labor practices as part of Nestle’s 2020-2023 Zimbabwean Dairy Strategy rollout.

HM: Tell us more about  the regenerative agriculture project Nestle is undertaking in Honde Valley, Manicaland Province where the company is helping coffee farmers implement sustainable and environmentally friendly way of producing Arabica coffee?

LG: We define regenerative coffee agriculture as a profitable model which addresses the challenges of climate change, biodiversity loss and community resilience.

The regenerative practices will deliver on five important areas of impacts which include soil health, biodiversity, water, climate and  farmers and community resilience.

Amongst the key practices that will deliver the impact, the Nespresso AAA Sustainable Quality programme will promote agroforestry, soil cover, soil maintenance including fertilisation with organic composting, the renovation of coffee fields with disease resistant varieties, water treatment, pests biocontrol and beekeeping.

The AAA Programme is Nespresso’s unique coffee sourcing programme designed to ensure the continued supply of high-quality coffee  while  improving  the  livelihoods  of  farmers  and  their communities, and protecting the environment.

On this specific matter, we work alongside partners including Rainforest Alliance to ensure we minimise the negative impact of coffee growing and generate positive environmental impact by focusing on preserving nature through initiatives such as water preservation and improving soil health.

The AAA Programme provides technical assistance to producers regarding sustainable agricultural practices, offering training on topics including protection of key ecosystems, and managing waste water from milling.

All these practices are based on the Rainforest Alliance Standard.

At a higher level and as part of our Net Zero commitment, Nespresso is working to reduce emissions, even as our business grows, through the transition towards greater use of regenerative agriculture.

We are currently working alongside key partners to finalize our operational roadmap and will be sharing more information in the coming months.

HM:What strides and achievements can you talk about?

LG: In 2017, Nespresso partnered with NGO TechnoServe as well as Zimbabwe’s two coffee estates and smallholder farmers in the framework of our Reviving Origin Programme,which is part of our AAA Programme.

The Reviving Origin programme aims to revive high quality coffee production in  challenged  regions  across  the  world.

Long-term partnerships are established with farmers and communities to rebuild sustainable coffee production impacted by adversities such as conflict, economic or environmental disasters.

This successful programme has so far invested in regions across Colombia, Puerto Rico, Cuba, Uganda and now the Democratic Republic of the Congo (DRC) and Zimbabwe.

We are proud of what we have achieved so far in Zimbabwe with the help of NGOs & local partners.

Since 2017, we have been working with smallholder farmers there.

Around 450 farmers have joined the Nespresso AAA Programmeme – this represents more or less all of Zimbabwe’s smallholder coffee farmers – which means that they are receiving the Nespresso premium for the quality coffee we buy.

In addition, TechnoServe, our partner in Zimbabwe, is providing technical assistance and training to around 300 of those farmers.

We started the training programmeme in Honde Valley in 2019, where most smallholder farmers are concentrated.

The positive impacts of this will reach the whole community and stimulate the rural economy.

Together with the growing community of farmers, we hope to revive Zimbabwe’s coffee industry.

HM:  Whats does the future hold for Honde Valley coffee in light  of the frost in Brazil and supply chain issues caused by the Russia-Ukraine conflict?

LG: Nespresso, like many other companies, is directly and indirectly affected by the impact of the inflationary pressure. This has affected global price increases in various industries, including coffee production.

We have made price adjustments only where necessary. Our goal is to continue to keep our prices stable, and it is our priority to support farmers in the long term in improving the quality of their coffee and the productivity of their farms, and to offer our customers high-quality coffee at competitive prices.

That being said, we will keep focusing on implementing the Nespresso AAA Programmeme and supporting farmers in Zimbabwe (and around the world) to improve the quality of their coffee and the productivity of their farms through climate-smart and sustainable farming practices.

HM:  Since Arabica is a delicate crop which grows under specific climatic conditions. What other varieties are adaptable in Zimbabwe to counter the effects of climate change?

LG: Unfortunately, Robusta is not appropriate for the regions we are exploring in Zimbabwe. These are higher altitude areas (900-1000 meters above sea level, cooler, with long dry season); in contrast, Robusta is appropriate for lower altitude areas, and require hot but also much wetter climate.

Robusta would not work at all in the areas like Chimanimani and Chipinge given the rainfall patterns.

Contrary to the Robusta, the Arabica varieties that farmers are planting and growing in these regions – Catimor 129 and SL varieties – are already very well adapted to long dry seasons. The big focus of the AAA programme is to support farmers to ensure their coffee is well adapted to changing climate (for example longer hot/dry season), with a focus on two key practices  that is planting of shade trees that focus on planting of bananas between the coffee to provide lots of shade to the coffee trees, and offer an additional source of income to help farmers earn more, improving soil health , specifically increasing soil organic content,  improving  soil  structure  and  ability  to  hold  more  moisture,  protecting  soil  from  direct heat/evaporation through application of mulch.

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