Nescafe: A Product Analysis of the Coffee Giant

11/30/2015

Introduction

Coffee is one of the world’s most popular beverages. Among the most popular and recognizable brands of coffee is Nescafe, a producer of many varieties of instant coffee. Despite its popularity around the world, Nescafe, (as well as its parent company, Nestle), has been the subject of numerous controversies, from unfair labor practices to reports of child and forced labor in coffee farms. Fair trade activists and organizations coined the term modern slavery as a way to describe these issues. In this product analysis, I will be examining one of Nestle's product, Nescafe Clasico. The goal is to evaluate and gather information regarding this product, such as marketing claims and resources, and its relation to modern slavery in order to come up with a conclusion that will provide awareness to the general consumers.

Topics

Background
- Nestle
- Nescafe Clasico
Analysis
- Marketing & Advertising
- Employees & Production
- Labor Ethics
- Fair Trade
- Using the Product
- Ingredients & Production
Research
Conclusion

Background

The origin of coffee was said to derived from the highlands of Ethiopia. After the discovery of its potent abilities, word began to spread about this special drink. Coffee houses opened up in Europe, and coffee farms were established in many parts of Africa and the New World. Thus, the coffee industry was born.

Nestle

Nestle is a Swiss food and beverage company that was established in 1905. The company's headquarters is located in Vevey, Switzerland, with several offices around the world. The concept of instant coffee was formulated fifteen years prior. In the 1930s, Nestle's brand of instant coffee, Nescafe, was first introduced in Brazil as a way to preserve local coffee surplus. The brand was later introduced in Switzerland and was soon exported around the world. Today, the label exists as Nescafe Classic.

Along with coffee, Nestle is also known for its chocolates, confections, infant formulas, and personal grooming products. Most notably, however, is their string of controversies concerning their products such as reports of children working in cocoa farms and health issues relating to their baby formula. Because of their history with controversies, Nestle is considered to be one of the world's most controversial corporations.

NescafÉ Clásico

I chose coffee, specifically Nescafe, as my subject for this product analysis because I was aware that there are issues surrounding the coffee industry. However, I do not know the extent of the issues, such as the use of child or forced labor within farms.

I searched in my kitchen for a Nestle product and I happen to encounter one of their brands of instant coffee, Nescafe Clasico. Clasico is an offshoot brand of the Classic, and it primarily targets the Latino demographic. I'm not sure how I fit into the equation as I just so happen to own the product, but I'm pretty sure I'm not the only non-Hispanic consumer to get a hold of this product.

Nescafe Clasico comes in a glass jar that varies in size (1.75oz., 3.5oz., 7oz. and 10.5oz.). The brand also comes in stick packaging. For this product analysis, I have a 7oz jar. The price for this product depends on the size and where it is sold; For a 7oz jar, Walmart has it for $5.54; Target has it for $5.89; Amazon listed it $10.97.

Analysis

A screenshot of Nestle's site

Description
NESCAFÉ® CLÁSICO™ is the leading coffee for Latinos in the U.S. It is 100% pure coffee, made from a blend of selected coffee beans, carefully roasted to capture its full flavor and aroma. NESCAFÉ® CLÁSICO™ has a unique taste and is a familiar "cafecito" that Latino consumers know and love from home.

NESCAFÉ® CLÁSICO™ pure soluble coffee is available in 1.75oz., 3.5oz., 7oz. and 10.5oz. sizes, as well as a 7 count stick pack for on-the-go. In addition to the original blend there is also a Decaf variety available in 7oz. NESCAFÉ® CLÁSICO™ is the fastest growing brand in the soluble coffee category with distribution nationwide in the U.S.

Marketing & Advertising

Nescafe's marketing campaign features its signature red cup on every packaging. As presented on Nestle's website, Nescafe Clasico claims to be the leading coffee for Latino Americans. As a reminder, I am not their target demographic. The coffee is claimed to have made of "100% pure coffee" and is "made from a blend of selected coffee beans, carefully roasted to capture its full flavor and aroma." It also made claims that "Nescafe is committed to improving the lives of farmers." This is interesting because I will be evaluating their coffee farms later on to see if this claim hold any truths. The coffee is said to provide "a unique taste" that consumers know and love. The slogan on the back of the jar reads, "Rich, bold flavor in every cup!"

Along with the site and the packaging, I looked further and found several commercials (all in Spanish, of course). One of the commercial features a celebrity I never heard of, Ricky Martin. Apparently, drinking coffee in public with strangers can be considered a special moment, as Nescafe encourages everyone to "make moments happen." #MomentoNescafe

Commercials

Labor & Production

According to Nestle's official site, Nestle has 447 factories, operates in 194 countries, and employs around 339,000 people. Their coffee is sourced directly from farmers and their associations in Mexico, Côte d’Ivoire, China, Vietnam, Thailand, Indonesia and the Philippines. There are 26 production facilities, 12 of which are located in coffee producing countries such as Mexico. Further research led me to several articles stating that Nescafe Clasico is primarily produced in Toluca, Mexico, which is home to Nestle's largest factory.

Nestle's largest factory in Toluca, Mexico

Around 70 percent of the coffee supplied to the plant currently comes from Mexican farmers, while 30 percent is imported. More details regarding coffee beans and its production will be covered later on.

"Fair Trade"

Nestle is affiliated with Fairtrade International, a nonprofit organization made of 29 members, through the Fairtrade Foundation and Fairtrade UK. According to Nestle, "Nestle works alongside Fairtrade to ensure that a fair price is always paid to farmers, as well as investing in long-term community and business projects." Nestle first joined the organization in 2005. Its partnership with Fairtrade is not without controversy. Critics attacked Nestle's move as an attempt to refine its image and reputation.

Fairtrade International was also the subject of criticism. Activists like Bill Fishbein have called the organization a "marketing strategy" and a way for corporations to stick a "fair trade" label on their products. "The farmers have become a sales tool," Fishbein said.

But some charities and pressure groups said that Nestlé and other coffee companies had been partly responsible for driving down coffee bean prices to levels where small farmers could not survive.

John Hilary, policy director at War on Want, said: "The fair trade movement was set up to challenge the practices of companies like Nestlé. How can such a company deserve the fair trade mark?"

Harriet Binet of Oxfam, one of the six British charities which set up the Fairtrade Foundation, said: "There is a world coffee crisis, with 25 million farmers suffering. The big four roasters, including Nestlé, have made a fortune at their expense."
- Excerpt from The Guardian, 10/06/05

Using the Product

Describe to what extent the product does what is claimed:
Did it make instant coffee? Yes.

Taste:
- Marketing claims that is has a unique taste.
- It does have an strong, dark flavor to it
- Smooth and fluid
- Aftertaste is noticeable

Smell:
- Smells pretty good prior to brewing
- Nice aroma when it is brewed.

Appearance:
- Brown and granular, not very powdery
- Plain, dark brown (brewed)

Final Verdict:
Rating: 2.75/5 ⭐⭐⭐⭐⭐
Nice smell, okay taste, though it tasted better with added sugar

Other Reviews & Opinions

I was unable to find product reviews or blogs that focus on this product, as all the other reviews online are consumer comments and ratings on sites like Amazon and Walmart.

In Amazon, the reviews are mostly positive towards Nescafe Clasico.
http://www.amazon.com/Nescafe-Clasico-Instant-Coffee-Ounce/dp/B0052OOLZY

The Houston Press taste test saw their testers prefer Clasico over Starbucks Via.

I found two blind taste tests conducted by the Huffington Post and Houston Press. The Huffington Post lists several brands of instant coffee and ranks them according to the testers' opinions. Clasico was ranked 17th out of the 20 coffee brands and received negative reviews. On the other hand, the taste test that Houston Press conducted saw its testers prefer Clasico over Starbucks Via, which was surprising as it was ranked 1st in the Huffington Post.

Huffington Post:
http://www.huffingtonpost.com/2012/04/05/best-instant-coffee_n_1405887.html

Houston Press:
http://www.houstonpress.com/restaurants/taste-test-nescaf-clasico-vs-starbucks-via-6429914

Here is a video review that I found from YouTube user Rules for Rebels:

Overall, reviews for Nescafe Clasico have mostly been mixed. Some people enjoy drinking it, while others are not too pleased with the taste.

Ingredients & Production

It is 100% pure coffee, made from a blend of selected coffee beans, carefully roasted to capture its full flavor and aroma. - Nestle

I was not able to find any list of ingredients. It is not listed on the packaging nor on their official website. What I can assume, however, is the type of coffee beans Nestle uses. Nescafe uses a mix of Robusta and Arabica beans (a blend of selected coffee), though Robusta beans are commonly used for instant coffee.

http://www.foodfacts.com/ci/nutritionfacts/coffee-tea-hot-chocolate/nestle-nescafe-clasico-instant-coffee-7-oz/13103

I found that there are two main varieties of coffee: Arabica and Robusta. The former (which is considered better quality) comes mostly from Latin America, Ethiopia, and Kenya; the latter, from Brazil, Vietnam, and Uganda. It is known that Nestle operate their farms and facilities in these countries.Based on my findings and assumptions, Nescafe uses a mix of Robusta and Arabica beans (a blend of selected coffee), though its a given that Robusta beans are used, as they are commonly used for instant coffee.

An Arabica bean and a Robusta bean

Coffee robusta varieties, grown mainly in Africa, India, and Indonesia, have a harsher flavor, but they are cheaper to grow since they can be harvested over a range of ripeness and are more resistant to diseases and insects. Because of their more attractive price, the robustas are widely used in the manufacture of instant coffees.

Тhe fаmоuѕ Nеѕсаfе іѕ аlѕо mаdе frоm Rоbuѕtа соffее. Асtuallу, wе mау ѕау thаt Nеѕсаfе іѕ thе mоѕt fаmоuѕ Rоbuѕtа соffее brаnd аll оvеr thе wоrld аnd mоѕt оf аll іn Еurоре.
- Types of Coffee
http://www.types.coffee/robusta-coffee

An infographic on the difference between Arabica and Robusta coffee beans.

Origins and Possible Route

Nescafe Clasico is distributed to major stores from a Nestle distribution center in Glendale, California, which was listed on the back of the packaging. The materials that were sent to Glendale were produced in a facility in Toluca, Mexico, as mentioned previously, which is where Clasico is primarily produced. According to Nestle and articles relating to the Toluca factory, around 70% of the coffee supplied to the plant are derived from farms in Mexico, while 30% is imported from places like Latin America and Ivory Coast.

A very simplistic infographic covering the route of Nestle's Clasico production

Research

Numbers of households/people/organizations using the product
I was unable to find any official statistics regarding to the usage of Nescafe Clasico. However, according to Nestle's marketing campaign:

NESCAFÉ CLASICO leads the soluble coffee category with an 85%+ market share in Mexico.

Therefore, it is under the assumption that Nescafe Clasico is widely used in Mexico and perhaps most of Latin America. There is probably a sizable amount of people who consume this product in the United States as well.

Companies who produce your product
Nestle owns Clasico under its Nescafe brand. The company also has its own distribution center in Glendale, California and a production facility in Toluca, Mexico.

Two competitor companies (one Fair Trade if available)
Starbucks (Starbucks Via)
Cafe Altura (Organic Freeze Dried Instant Coffee)

As previously mentioned, Starbucks Via was featured in two taste tests that also included with Nescafe Clasico. The company itself is committed to buying coffee beans that are ethically sourced; as of 2013, 95% of their coffee beans are derived from ethical and fair labor, according to USA Today.

Cafe Altura is not exactly a big competitor to Nestle like Starbucks, but they are a well known Fair Trade instant coffee brand. According to their official website, Cafe Altura is an exclusively sourced blend of organically grown 100% Arabica coffees selected from three continents. All coffee is grown sustainably by small farm indigenous growers who form the basis for Fair Trade exchange.

Starbucks Via

Cafe Altura

Changes in product cost in recent years
The price for Nescafe Clasico varies by size and store. For instance, a 7oz jar will cost around $5 in Walmart and Target.

Country of Manufacture
Mexico and the United States

Countries who contribute materials/ingredients
United States, Mexico, coffee-producing countries (Latin America)

Material changes in recent years
Its label underwent a change in appearance. Other than that, there weren't any significant changes with the Clasico brand, although there were unconfirmed reports of a recipe change.

Unethical Labor Practices in Coffee Farms

These next topics highlight the unethical labor practices of Nestle-affiliated farms, though many of these issues can be found across the coffee industry. It is important to note that not every coffee farm exhibits modern slavery, but many of these issues are often overlooked in some farms.

Exploitation

Most coffee workers don't earn the fair price for their labor. For example, a worker receives about 6% of the price paid for coffee at a supermarket. Global Exchange, an international human rights organization, reports that workers in the coffee industry generally earned about $2--$3 a day. In order to meet that wage, a worker would have to pick up to 100 lbs of coffee. Families who run small farms typically earn between $500 and $1000 a year. Their low earnings are the result of selling their products to middlemen, in which the price is half of the market value. Other issues include a lack of safety codes and poor living conditions in many areas of Africa and Latin America.

"Migrant workers, especially in Central America, endure extreme conditions when living on the coffee farms with their families during harvest time, sometimes confined to sharing with 40-60 farm workers (and their families). Mattresses and blankets are sparse and sanitation nearly non-existent, forcing the workers to use the coffee fields as toilets and shower in the rivers. Privacy, safety and security are absent."
- Cecilia Borjeson, writer for Bonaverde

Child and Forced Labor

Child labor is widespread in coffee cultivation. An article from the Food Empowerment Project describes a situation in which child labor occurs, "When the price of coffee rises, the incentive for struggling families to withdraw their children from school and send them to work increases; at the same time, a fall in coffee prices increases poverty in regions that depend on the crop, which can also prevent children from attending school."

There are also reports of forced labor in many coffee farms. Some workers are enslaved because they are in debt; thus, they are forced to work in order to repay debts in a system called peonage (debt slavery). Cecilia Borjeson is a writer for Bonaverde. She says, "Modern day slave practices are real and do still exist in coffee-producing countries. It often consists of ‘hiring’ poor workers from a different region of the country – once at the coffee farm they are not paid, they barely have housing or food, and are prevented from returning to their homes, sometimes supervised by armed guards."

Conclusion

I learned a lot about Nescafe and the coffee industry. Although Nestle is trying to improve its image through fair labor and trade initiatives like Fairtrade International, it is apparent that many of the issues that have been historically linked with Nestle and the coffee industry, such as child labor and exploited labor, are still rampant and unnoticed among many farms in coffee-producing countries. Though their marketing claims to support farmers, their farm operations and its connection to questionable labor practices, however, leaves a lot be desired.

Although Nescafe Clasico is an okay drink, it is a byproduct of modern slavery through Nestle's affiliation with farms that practice labor exploitation. There are other brands of instant coffee out there that tastes as good, if not, better than Nescafe's products that are ethically sourced such as Starbucks and Cafe Altura. Consumers should expect what goes into their cup of coffee and carefully analyze a product's label and research its supply chain. If the product happens to have a Fair Trade certified label, it's always best to double check on whether it is really produced by fair labor, as companies can apply to have a certification on their labels.

There are a variety of tools on the internet that consumers can use to check if the products in question are free of child and forced labor such as Free2work, the Good Guide, and the Good Shopping Guide. It is beneficial to become an analytical and knowledgeable consumer in this day and age, since we are constantly exposed to the internet and social media. Why not make good use of it?

Helpful resources:
Free2work - http://www.free2work.org/
Good Guide - http://www.goodguide.com/
Good Shopping Guide - http://www.thegoodshoppingguide.com/

Sources

Free2work analysis on Nescafe
http://widgets.free2work.org/frontend_ratings/public_view/1108

Ingredients/Materials
http://www.types.coffee/robusta-coffee
http://www.madehow.com/Volume-3/Instant-Coffee.html
http://www.foodfacts.com/ci/nutritionfacts/coffee-tea-hot-chocolate/nestle-nescafe-clasico-instant-coffee-7-oz/13103

How coffee is made: https://www.nestleprofessional.com/uk/en/SiteArticles/Pages/How_Coffee_is_Made.aspx

Reviews: http://www.amazon.com/Nescafe-Clasico-Instant-Coffee-Ounce/dp/B0052OOLZY

Nestle and Labor
http://bonaverde.com/mag/en/magazine/coffee-4/coffee-guide/dark-side-coffee/
http://www.towardfreedom.com/35-archives/labor/2601-combating-slavery-in-coffee-and-chocolate-production
http://www.mintpressnews.com/untitled-document/26638/
http://www.foodispower.org/coffee/
http://www.fairlabor.org/blog/entry/nestle-joins-fair-labor-association
http://www.fairlabor.org/affiliate/nestle?page=1
http://www.corp-research.org/nestle
http://cms.iuf.org/?q=node/497
http://www.ethicalperformance.com/bestpractice/article/107

Child, Exploited, and Forced Labor
http://www.foodispower.org/coffee/
http://bonaverde.com/mag/en/magazine/coffee-4/coffee-guide/dark-side-coffee/
http://www.towardfreedom.com/35-archives/labor/2601-combating-slavery-in-coffee-and-chocolate-production
http://www.mintpressnews.com/untitled-document/26638/

Fair Trade
http://www.theguardian.com/business/2005/oct/07/ethicalbusiness.fairtrade
https://www.nestleprofessional.com/uk/en/Documents/Sustainability/sourcing/coffee_sourcing/cs_partners_blend.html
http://www.bloomberg.com/news/articles/2011-12-23/fair-trade-proving-anything-but-to-farmers-with-6-billion-sales-at-stake

Toluca plant:
http://www.reuters.com/article/2010/01/30/us-nestle-mexico-idUSTRE60T1RR20100130
http://www.ift.org/food-technology/daily-news/2010/february/03/nestle-to-invest-390-m-in-mexico-coffee-plant.aspx
http://www.nestle.de/asset-library/documents/medien/broschueren/unternehmen/nescafe_plan_factsheet.pdf
https://mitsloan.mit.edu/LearningEdge/CaseDocs/08%20069%20Fair%20Trade%20Coffee%20The%20Mainstream%20Debate%20Locke.pdf
http://www.nestle.com/aboutus/suppliers

Supply chain
http://businesscasestudies.co.uk/nestle/coffee-the-supply-chain/the-supply-chain.html#axzz3rrKqJJPy

Alternatives
Cafe Altura
http://cafealtura.com/product/organic-freeze-dried-instant-coffee/
http://cafealtura.com/the-deal-with-instant-coffee/

Starbucks
http://www.usatoday.com/story/money/business/2014/07/06/why-its-hard-to-hate-starbucks/12022699/

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