Nestle Fairtrade Analysis

Recently people have become more and more conscious of what they put into their bodies and where it comes from. An unprecedented amount of information is now readily available to most Americans with the advent of the Internet. This has resulted in a great increase in transparency of the many aspects of imported products. Consequently, programs have been established to help ensure that these products are produced in more ethical and humane ways. To many Americans, the Fair Trade labeled bags of coffee they purchase that give them the energy they need to go about their day in addition to being a socially conscious decision but to many it is a means for survival and an escape from a cycle of debt that traps many similar non-Fair Trade growers generation after generation

Corporate Social Responsibility is an important term that few know of. This term stands for everything that’s moral, from using less harmful chemicals in their products to protecting the rights of the workers and the society we live in. However, some companies do not live by this word. This, coupled with the massive amount of consumers buying their products, can cause a multitude of problems not only for the company workers, but to the world itself. As such, companies should become more aware of their effects on the world around them and change their moral responsibilities to treat their workers more humanely, protect the lives of the people in their towns, cities and countries and save the environment from further destruction and pollution.

Coffee has not only impacted the world socially, but it provides financial means for many countries who export their coffee beans.

Threat of Substitutes: There are various substitutes for fair trade coffee in the industry such as regular coffee, tea etc but not only coffees but in the general beverages market e.g. Coca Cola, Water etc. As a result of this there is a very high threat of substitutes.

According to Lyon, Bezaury, & Mutersbaugh (2010), Fair-trade is a “process which helps improve the well-being and economic stability of disempowered farmers, by using certified commodity-chains to foster development”. For the KHC company, Fair-trade is essential because they want to provide and endorse exceptional coffee beans that they are proud to use; that means, “using coffee that is good and fair for both our coffee drinkers and for farmers are essential” (Kicking Horse Coffee, n.d.). In fact, over the past 20 years, Kicking Horse won numerous awards in many categories, including Canada’s Fastest- Growing Companies, Canada’s Top Women Entrepreneurs, Canada's Favourite Fair-trade Product and number 15 Best Workplace in Canada (Kicking Horse Coffee, n.d.).

Kraft (the company) did very so far in the foods and beverage market in Canada. The company was planning to launch the new coffee pods. However, the

There are 226 fairtrade certified producer organizations in 74 countries. Moreover, small producer organizations spent 31% of their fairtrade premium on investments supporting productivity or quality of improvements and on plantations, workers spent 26% of their fairtrade premium on education. So Fair Trade starts the path for many other advancements. Some examples of products that are Fair Trade Certified are Stacy’s Pita Chips, Brownie Brittle, and the Whole Foods Market grocery store. There are many Fair Trade Certified companies all over the world, a handful of which include Ben & Jerry’s Ice Cream, Fair Indigo, Fairhills Wine, Green Mountain Coffee Roasters, Theo Chocolate. Blends for Life, and Rishi Tea. All of these products are sold in local grocery stores and food markets. In order to incorporate these products into our daily life we have to make objective decisions and research the specific foods, and products we are buying everyday. By taking the time to find specific products that are Fair Trade Certified we not only benefit the worker we also benefit the environment and ourselves by supporting a morally conscious

One of the key reasons that make Kickapoo Coffee profitable is that they focus not only on quality but that of fair trade. Therefore, with fair trading you have a responsibility to fair treatment of laborers who are responsible for the production of your product, by providing safe and environmentally friendly working conditions are part of the social responsibility

Finally, global economic issues have an immense influence on the world of coffee. Throughout history there has been a pattern that coffee producing countries are economically worse off than those that are consuming the coffee. Pendergrast mentions that “in 1950 the average income in consuming countries was three times that of coffee-growing nations. By the late 1960s it was five times great” (270). With that said, many producing coffee countries were facing endemics and malnourished peoples because workers were receiving absurdly low wages thus placing them into poverty and human suffering (271). Specifically, although 90 percent of El Salvador’s exports consisted of coffee in the 1930s, they agonized from “‘low wages, incredible filth…[under] conditions in fact not far removed from slavery’” (168). Global economic issues of these producing countries lead to dictators easily gaining power such as those in Guatemala, Nicaragua, and Honduras (170). Not only was politics a matter that resulted from global economic issues, “the high interest rates from financial institutions and price [squeezes]” lead to the economic struggle of farmers like those from Colombia due to

Just Us! is a corporation that imports, roasts and sells primarily organic coffee from fair traded certified coffee producers. Their vision is: “to be a leading Fair Trade business that builds on quality, professionalism and innovation for the benefit of all our stake holders. Since its inception, Just Us! had experienced healthy growth in the maritime provinces of Canada, mainly supported by its corporate values: social and environmental responsibility, sustainability, ethical practices in all the areas of the business and in all stakeholders, and product differentiation. They even opened a fair trade museum to help educate the public on the social impact and benefits of fair trade.

Fair Trade’s consumer recognition has tripled in the last five years, proving the company’s sustainability in a global market. As of today, this organization works with more than 800 companies to verify more than 6,000 products as Fair Trade. In 2009, Fair Trade Certified products generated $1.2 billion in retail sales, indicating their large-scale business practices.

These factors together have driven the price in the first months of 2002 down to a 100-year low. The global retail market value for certified sustainable coffee was in 1999/2000 around US$ 455 million. By including non-certified products, sold with a sustainability label, the figure reaches US$ 530 million. Approximately 15-18 million pounds of certified organic coffee were exported globally, and including the trade of non-certified organic coffee, the amount is 21.2 million pounds. Sustainable coffee gives a considerable price premium to the farmer. The willingness of the consumer to pay extra for products that are produced in an environmentally and/or socially sustainable way is transferred to a premium for the producer. The total world production of coffee is estimated to reach 117 million bags in 2002/2003, while the world consumption will only reach 108 millions bags. With an oversupply of 8 million bags, the future market for conventional coffee is problematic and there is a large incentive for entering niche markets (PROCAFE 2001). The US National Coffee Association considers that sustainable coffees are important niches, but does not believe that it can be applied to the whole industry (Nelson 2002). The sales of organic products in Europe are, however, increasing by 23% per year and the WTO has

We can see that the value for this ratio in Nestlé is roughly 0,41. In order to avoid liquidity problems, the ratio’s value must be closed to 1, but we can see that the value for this ratio in Nestlé is roughly 0,41. Since it is quite lower, it means that Nestlé has risk of bankruptcy, due to the fact that, with the resources owned in short term, the company cannot pay back its short-term liabilities. This could be related to the fact that Nestlé has a very high bargaining power that could useful for them in order to exercise their power on suppliers to negotiate their payment commitments. SOLVENCY RATIO AND LIQUIDITY RATIO By means of solvency ratio, short-term assets are compared with short-term liabilities and it shows the liquidity situation of the company’s cash. It is also known as working capital ratio or solvency ratio at short term.

The film highlights the fact that coffee is the most valued word commodity, second to oil. The beginning of the film shows the process in which coffee is made- from bean harvesting by workers in Ethiopia who make next to nothing, through several intermediated stages, and into the market. Although we spend countless amounts of money on coffee without thinking twice, the price that coffee farmers who produce this commodity are getting paid, is disgustingly low. Some of them have even been forced to walk away from their fields. There is no better place to see this

This income statement shows that they outperformed their previous year in Earning per share and in their profits. Nestle is always trying to be better each year in all their divisions. By their competencies and competitive advantages they gain more profits.