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INTERVIEW - "Rainforest" Seal Gets Kraft Coffee in More Stores
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US: May 4, 2006


CHICAGO - Kraft Foods Inc. is trying to bring environmentally friendly coffee to kitchens at non-premium prices and is getting its Yuban brand into more stores as a result, the vice president for the company's coffee business said.


The company has received Rainforest Alliance certification for Yuban, a brand that has traditional had most of its sales west of the Rocky Mountains, though it has also been in some stores in the East, Kraft said.

The certification means that at least 30 percent of the coffee beans in the product are grown at farms that use less herbicides and better water and soil management and that provide workers with improved training, housing, health benefits and education, Kraft said.

Kraft began shipping the certified coffee in January and has seen the Rainforest Alliance certification open the way to more markets.

"A number of retailers took us nationally," Linda Harelick, vice president for coffee at Kraft, said of the reaction to the certification. Target Corp., for example, now carries Yuban in 1,000 of its stores, up from 300, she said.

"There is a consumer demand, consumer interest for sustainable (agriculture) products," she said.

Environmentally friendly and socially responsible coffee have generally been the province of higher priced brands. Procter & Gamble Co., for example, uses its Millstone brand for Rainforest Alliance and Fair Trade certified coffee, rather than its top-selling Folgers.

"The way we think about this is these certified coffees are special coffee that would fit under a premium (brand)," Lars Atorf, a spokesman for P&G's coffee business, said.

Yuban costs about 5 cents a cup, compared with 4.5 cents for Kraft's standard Maxwell house brand, but still well below the price for a "premium" brand cup, Harelick said.

The company has also added the words "From the Maxwell House Coffee Company" on the Yuban can to emphasize that Yuban is a mainstream brand.

"Before Yuban became certified, the only way consumers were able to participate in sustainability was (in the) super-premium" segment, Harelick said.

Kraft plans to buy 20 million to 26 million pounds of Rainforest Alliance certified coffee in 2006, compared with 13 million in 2005, and plans to keep increasing that amount as consumer demand grows.

Seven to 10 million of that 2006 amount will be used in Yuban, with the rest going to higher-end brands like Gevalia. Rainforest Alliance beans represent about 1 percent to 2 percent of Kraft's total coffee bean purchases, a spokesman said.

In order to get enough Rainforest Alliance beans, Yuban is no longer made 100 percent from beans grown in Colombia, a Kraft spokesman said. The company now buys Arabica beans from all over Central and South America for the brand, he said.

Kraft shares were off 6 cents at US$30.98 Wednesday afternoon on the New York Stock Exchange.


Story by Brad Dorfman


REUTERS NEWS SERVICE

Reuters



© 2008 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.
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