Challenge

In our Coffee business field, we are particularly reliant on procuring raw coffee, which we process at our own roasting facilities in Europe, North America, and South America. We purchase goods from almost all coffee-growing regions of the world in order to source the quality and quantity we need. We source our raw coffee from farmers, cooperatives, exporters, importers, and international raw coffee traders.

In recent years, the consumption of coffee grown mainly by small farmers in the so-called coffee belt along the equator has increased around the world. Market surveys assume that demand will continue to grow steadily. This will result in medium and long-term opportunities for all participants in the value chain. However, in order to take advantage of these opportunities, there must be a broad-based commitment to sustainable coffee cultivation, as producers and their communities in many regions are facing complex challenges:

• Environmental: climate change, decreasing biodiversity, soil degradation, water shortages, pesticide ingress
• Social and societal: risk of violating human rights, labor rights, and gender equality standards, as well as rural exodus
• Economic: risks due to fluctuating market prices, uncertain harvests, poor market access

In addition, challenges also arise during the transporting, roasting, and packaging of coffee.

Targets and KPIs

The further development of our strategy based on the “Coffee of the Future” vision and the measures derived from it in the sector and in our supply chains gives us the opportunity to establish sustainable coffee cultivation so we can continue to offer our customers sufficient quantities of the desired qualities in the future.

Our objective is that by 2030 at the latest, all of the raw coffee we source and all of the roasted coffee we sell is what we call the “Coffee of the Future”:

To achieve this goal, we rely on a mix of measures along the entire value creation chain:

• Coffee cultivation and harvesting: develop and implement projects to address the environmental, social, and economic challenges of coffee farms, their employees and communities, with the aim of scaling results in the coffee-growing countries and regions
• Procurement: increase the proportion of raw coffee sourced with sustainability certificates and verifications in line with the Coffee Sustainability Reference Code of the Global Coffee Platform
• Production and transportation: expand resource-conserving roasting and climate-friendly transportation
• Packaging: expand the proportion of ecological packaging
• Marketing: raise awareness of sustainable consumption with corresponding marketing and communication activities
• Recycling, recovery, disposal: develop measures for the circular economy of biogenic materials

In order to ensure the efficient and coordinated behavior of all operating divisions within the Melitta Group, we have developed a Theory of Change in which we prioritize the areas of action and the results we are aiming for, and derive our measures from this. Roadmaps have been developed – or are currently being drafted or refined – for each operating division.

We are convinced that the numerous sustainability challenges in the coffee value chain can only be effectively addressed by taking a collaborative and cross-company approach. As one of the world’s ten largest roasters, we therefore believe that it is our responsibility to be active in national and international organizations, associations, and initiatives and to make relevant contributions for a sustainable global coffee industry. This includes, for example, developing and implementing sustainability standards, helping to compile the necessary information and data, and initiating and implementing training, innovation, and community projects in the coffee-growing regions.

Due to changes in the availability of certain qualities – caused in part by weather conditions – we were unable to maintain the high proportion of certified coffee in 2022. At the same time, we increased the proportion of products from joint projects in coffee-growing countries, such as Colombia. For the future, we are looking at ways to increase the proportion of raw coffee that meets the current GCP definition of certified or verified sustainable coffee cultivation. Moreover, we are currently working on a concept for “regenerative growing regions”. By taking a holistic approach, this concept aims to ensure the long term, sustainable development of local coffee cultivation and enable rapid scaling to other coffee-growing regions and countries.

What we achieved in 2022

• Further developed a Theory of Change to ensure efficient and coherent Group-wide approach
• Further developed the roadmaps for every relevant operating division
• Expanded our involvement in the Global Coffee Platform (including participation in the (further) development of Coffee Sustainability Reference Codes, the “Social Well-Being in Brazil” project and Roaster & Retailer Reporting)
• Expanded our involvement in the German Coffee Association (including participation in the “Legal Obligations Sustainability” working group for the implementation of LkSG requirements. In particular, these include carrying out a comprehensive risk analysis for the main coffee-growing countries, establishing a “Coffee” whistleblower management system, and initiating the “QC Conta” project to establish local whistleblower systems)
• Supported a climate change research project at the University of Florida, USA
• Continued the circular economy project “Back to the Roots” in Brazil
• Continued the project “Higher yields for coffee farms in Colombia”
• Implemented existing and new community projects as part of our “Coffee of the Year”, “Selection of the Year”, and “Barista Perfection” editions in Brazil, Guatemala, Honduras, India, Mexico, Peru, Zambia, and Tanzania
• Analyzed human rights risks in the supply chain as part of the LkSG implementation
• Established a working group for the further development of sustainable coffee packaging
• Involved in the working group “Sustainable packaging at the German Coffee Association”

What we are currently working on

• Continuation or completion of the above-mentioned collaborations and projects and communication of the respective findings
• Development of further sustainability projects and measures in the coffee-growing countries, also in collaboration with 4C Services and the Sucafina Group
• Development of systemic commitment to regenerative coffee-growing regions in Brazil
• Integration of our new majority shareholdings Caffè Corsini and Roastmarket into the Theory of Change
• Further development of roadmaps to implement the defined targets in all operating divisions
• Development of solutions for more sustainable coffee packaging