* Swiss company among world's biggest buyers of cocoa beans
* Worried about global shortages and rising market prices
* Plans investments to promote sustainable, modern growing
By Laura MacInnis
VEVEY, Switzerland, Oct 22 Nestle SA NESN.VX
one of the world's biggest buyers of cocoa beans, said on
Thursday it would help cocoa farmers produce more beans to
confront a sharp climb in global market prices.
The Swiss maker of Smarties, Raisinets, Kitkat bars and
Nesquik chocolate milk said a fourth consecutive year of global
cocoa bean shortages had driven up costs, as it announced
third-quarter results that were helped by good sales.
"This is unheard of for us and it is even predicted for next
year, going into a fifth year," Nestle Executive Vice President
Petraea Heynike said of the shortages a day after U.S. cocoa
futures hit a nearly 30-year high in New York [ID:nN21418039].
Chocolate consumption has doubled in the past two decades,
and over the past five years alone global consumption has risen
But most cocoa farmers in key producing countries, mainly in
West Africa, are seeing their yields fall because of ageing
trees that are vulnerable to blights and small, unproductive
plots, Heynike said.
"Production and grinding of the cocoa beans is not meeting
the consumption, and that is leading to the very high prices
that we have seen," she said at a press conference.
The company -- whose other top-selling chocolate bars
include Butterfinger and Aero -- said it would spend 110 million
Swiss francs ($109 million) on "sustainability initiatives" for
the cocoa sector in the next decade.
Those include providing millions of disease-resistant
plantlets to cocoa producers which Nestle said can yield 50 to
200 percent more than the trees in use on many farms.
It also plans to train producers in "modern best practices
which could lead to significant improvements in the quality of
the cocoa they produce", said the firm, which is forecasting 2
percent inflation for its main raw materials which also include
sugar and milk in 2009 and 2010.
The cocoa ventures are in addition to the 350 million Swiss
francs ($346 million) the Nescafe and Nespresso maker has
pledged to spend on sustainable coffee in the coming decade.
Nestle invested a smaller amount to help farmer output -- 60
million francs ($59 million) for cocoa and 200 million francs
($198 million) for coffee -- in the past 15 years.
"We want to up the ante in what we are doing in this area,"
Heynike explained. "We want to increase productivity and
Nestle's chocolate and confectionary sales rose 4 percent in
the first nine months of 2009, outperforming the company's
overall 3.6 percent sales gain.
The company wants to make inroads into emerging markets
including India, where it is selling new bars including Munch
Guru, while also targeting high-end consumers who are turning to
dark chocolates including those with the Nespresso brand.
(Editing by Sue Thomas)