When avid coffee drinkers sip their daily brew, they likely don't consider how that steaming cup of joe came to be. As anyone in supply chain management understands, any product goes through a complex process that is often on a global scale. For many coffee brands, international issues, including violence, are causing problems in the supply chain.
Nestle Suspends Imports from South Sudan
The Swiss brand Nestle has put a temporary suspension on coffee imports from South Sudan for its Nespresso product. According to the Wall Street Journal, this decision comes amid security concerns as conflict ensues in this African region. Recently, the civil conflict in nearby Central Equatoria has stretched into South Sudan.
According to Reuters Africa, Nestle began its coffee operations in South Sudan back in 2011 after the region split from Sudan due to strife relating to oil disputes and ethnic divides. Nestle made efforts to repair the war-torn area, investing $2.5 million into procuring resources from South Sudan and training coffee farmers. However, obstacles have presented themselves several times since then, and the latest bout of violence is not entirely new. Despite Nestle's experience with the situation, executives considered halting the project the best choice. Jacquelyn Campo, the South African Nestle unit spokesperson, explained this to the WSJ.
"As a result of the increasing instability we have had to temporarily cease operations while we closely monitor the situation," she said. "In the last year, we were making solid progress until the situation deteriorated."
The Case for Coffee in the Congo
Nestle is not the only brand to experience the consequences of violence in coffee-producing regions. The Starbucks Corporation is another company with supply chain stakeholders in a war-town location: Congo. According to a company press release, Starbucks purchased its first crop in the Republic of Congo in 2014 and has helped many local farmers since then. The brand's efforts have tripled the income for some 4,500 farmers, and the beans from this region go to 1,500 Starbucks stores. The company plans to only grow this endeavor.
However, Starbucks may meet challenges along the way. According to Sprudge.com, violence has driven down coffee production in the past, dropping from 130,000 to 8,000 metric tons in between the 1980s and 2013, when civil conflict was at its peak. Efforts like those from Starbucks certainly signal good news for coffee farmers, but not all problems are solved. These suppliers still face government corruption and security concerns. Plus, many of these farmers are learning cultivation methods for the first time. Even though past generations grew coffee, the violence put this type of farming on hold for many families.
Considerations for the Supply Chain
There are both advantages and consequences related to sourcing coffee from these nations. For one, beans grown in their indigenous regions are of the highest quality, allowing brands to deliver top-of-the-line roasts. Plus, their efforts are helping to regrow economies in nations facing violence and financial problems. This positive social impact is good for the world and for business. After all, consumers want to buy from brands that demonstrate morality, integrity and honesty.
However, there are many risks associated with sourcing coffee from African regions. There's the violence that can put stakeholders at risk. Additionally, extreme issues may force production to be put on hold, which was the case with Nestle. This throws off inventory and ultimately impacts the consumer.
In these situations, communication is key, which is why automated data collection is so important. Traceability should be top priority in the food and beverage industry to begin with, but technology has capabilities beyond tracking items through the supply chain. It can aid in collaboration, which ultimately makes obstacles - like putting a hold on certain suppliers - easier to overcome.