Reforestation Sierra Piura/ Peru: Insights from business perspective

1. Reforestation Sierra Piura/ Peru: Insights from business perspective Towards Restorative Value Chains in Cocoa & Coffee Sectors Amsterdam, December 10th 2013

2. What will be covered • Who we are • Understanding the problem & our approach to cc • Why we invest • Project results so far • Learnings • Scaling up opps • What’s needed

3. Our Mission Cafédirect is an independent coffee, tea and cocoa company. We champion the work & passion of smallholder growers, delivering great tasting drinks to improvelivelihoods, whilst pioneering better ways of doing business

4. What we stand for SMALLHOLDER GROWN Best tasting hot drinks because of the pride & passion of smallholder growers on small farms DIRECTLY TRADED Sourced in direct partnership with growers to benefit everyone OVER 50% PROFITS REINVESTED AT ORIGIN Funding innovative projects to strengthen grower businesses and communities

5. Sustainability is part of our DNA.. . From our origins as a Quaker owned company, Bewley’s have always been committed to working in a sustainable and positive manner with both the natural environment and the communities within which we operate.

6. Understanding the problem

7. Assessing carbon footprint: selected coffee vs. tea vs. cocoa retail products Source: CD Carbon Footprint 2012

8. Our approach: • Farm-to-cup along full supply chain regardless if we have control or influence • Look into full picture: hence we consider adaptation as much as mitigation on climate change challenge • We seek collaboration to tackle the issues: b2b, public-private partnerships, engagement with end consumers • Integrated within our overall business strategy, not a separate add-on

9. Sustainability in BewleysThe Milestones • Carbon Disclosure Project - Carbon Leader 2010

10. Why we invest in climate change • Supply: • reinvest in our supply chain of conventional coffee • Triple-bottom-impact: • High social- environmental impact investment • Env: ‘Adaptation’ (or supporting farmers cope with effects of climate change) is built into the design • Social: purchasing carbon credits to offset our emissions: “Making the carbon market work for those usually left out” • Story: • This is a pioneering project that offers high quality carbon credits with a truly unique and relevant story behind them = point-of-difference in marketplace • Intra-supply chain carbon trading • Unique carbon credit project: adaptation incorporated / ownership by smallholder farmers/ new approach in the market

11. Carbon Neutral Coffee Roaster • 2009: Bewley’s becomes Ireland’s 1st Carbon Neutral Coffee Company. • Bewley’s buying carbon offsets in order to be carbon neutral. • Offsets were not from coffee related products or from coffee growing regions. • Wanted to investigate the relevant offsetting projects that could be sourced from coffee growing regions. • We wanted to invest in a “virtuous circle” of support between and Bewley’s and coffee farms where we source our coffee from. • This would ensure sustainable coffee supplies and farmers would benefit financially. • Early 2010: Café Direct introduces Bewley’s to Cepicafe project. • Since 2011: • 38 tonnes ($212,001) of coffee purchased from the project. • 4,594 carbon credits ($72,767) bought.

12. Marketing Challenge:Consumer Engagement! • Develop a Bewley’s Branded ‘Environment’ Coffee Programme for the Foodservice Trade (B2B). The programme would be built on: • Coffee – the coffee supplied under this programme is sourced from a carbon offsetting coffee farm in Peru • Equipment – Energy Saving & Eco Friendly • Cup – fully compostable • Coffee Airpot (Vessel) Branding – produced on recyclable material • PoS Materials e.g. Consumer brochures, Posters, DL’s etc – produced on recyclable material • Coffee Station – built from upcycled coffee grounds Concept evolved from Bewley’s sustainable supply chain initiatives (internal) and growing demand in the foodservice industry for compostable ancillaries, ethically sourced coffee and brewing equipment that saves on energy costs (external).

13. Compostable Cup Design

15. Getting Consumers Involved!

16. Results so far for Cafédirect • Supply side: • too early to tell….. adaptation measures on farm will take 1-3 years to materialise in yield improvement • Triple-bottom-impact: • Delivers big time on our overall impact as a company: our shareholders expect high social- environmental impact next to commercial • Tangible proof-point: action not words • Story: • Coverage of story in major UK broadsheet The Observer, in trade publication The Grocer and environmental journal The Ecologist • White Paper prepared and circulated to wider public & media • Engaging video clip distributed via social media • Project used by Sales team to drive pod of brand with customers

17. Success to Date(impact on Foodservice Customers) • Programme has been executed in multiple Foodservice locations since launch in late 2012. • 3 beeco branded coffee sku’s. • Trade customers reporting, on average, a 7-10% increase in their coffee sales to consumers after beeco programme has been implemented on site.

18. Learnings • Supply • Needs stronger impact data to know what works best/ roi on adaptation side • Link up more with agricultural science community on this • Conflicting cycles: short term business  long term cc • Triple-bottom impact • Highly “technical” project – requires much support for local communities • Upfront finance requirements are very high • potential trade-offs between ecosystem services should be considered eg benefits of planting fast-growing species for carbon capture versus increasing biodiversity • Story • Link to consumer around carbon is tricky in the UK market! • Comms works better on general smallholder farmer livelihoods

19. Scaling up opps • Off-farm: approach of linking various communities is promising eg reforestation, energy stoves, etc. • On-farm: more research/ tools on carbon capture available eg soil, shade trees, biochar etc. • Intra supply chain approach: joining up on other end • However: restoring ecological processes requires medium to long-term commitments to validate approaches and expand to a scale to have significant impact • Finally: look beyond carbon – it is about sustainable communities to ensure sustainable supply chains

20. Future Challenges • Sustainable supply of certified coffee. • On going availability of carbon offsets to cover our requirements. • Communication to key stakeholders of “on the ground” activities and benefits to the local producers. • Continued consumer engagement and involvement. • High costs to operators for compostable materials.

21. What is needed? • Complete re-think on how we measure business success • importance of Integrated Accounting • Hopefully not a supply crisis mentality like in cocoa but a pro-active, positive engagement • More significant collaboration across & between industry, public sector and academia/ scientific community