Nestle to invest $487 mln in coffee projects by 2020

NEW YORK, Aug 27 (Reuters) - Nestle NESN.VX, the world's biggest food group, said on Friday it would invest $487 million in coffee projects by 2020 to help the company optimize its supply chain.

The investment comprises $341 million for Nescafe products and $146 million for its high-end Nespresso, and includes distributing coffee plantlets to farmers, expanding technical assistance and buying directly from growers, the company said in a statement.

This is in addition to the $195 million the Swiss-based firm has invested in coffee projects over the past 10 years.

Nestle said it would double the amount of Nescafe coffee bought directly from farmers and their associations, eventually buying an annual 180,000 tonnes from about 170,000 farmers.

All of the directly purchased green coffee will meet “4C” sustainability standards by 2015, with the support of the Rainforest Alliance and the 4C Association.

The Rainforest Alliance is a nongovernmental organization that certifies farms for meeting sustainability criteria. The 4C Association, registered in Geneva, works towards sustainability in the coffee sector with a code of conduct and a verification system.

An additional 90,000 tonnes of Nescafe coffee will be sourced under the principles of the Rainforest Alliance and the Sustainable Agriculture Network, a coalition of conservation groups, by 2020, the company said.

“Nestle will distribute 220 million high-yield, disease-resistant coffee plantlets to farmers by 2020,” Nestle said.

Nestle sells instant Nescafe and high-end Nespresso brewed coffee. Instant coffee is typically processed from robusta beans while brewed coffee is most commonly made of blends dominated by arabica beans, which are more expensive. (Reporting by Marcy Nicholson; Editing by Dale Hudson)