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Sustainability rewrites the innovation agenda

How Nestlé embraces sustainability to serve local communities

How does a global food company embed sustainability across every one of its brands, supply chains and international operations? For Nestlé, the answer lies in recognising that its business would not exist without the produce and labour of communities around the globe.

 “We work with over 700,000 farmers directly, and with many others through our supply chain,” says Véronique Cremades-Mathis, Nestlé’s Global Head of Sustainable Packaging. “The idea of being in the community – and serving the community – is the way we do business.”  

If Nestlé can prove to consumers how much it values the long-term sustainability of those community ties, they will reward it: new research commissioned by Smurfit Kappa and conducted by Longitude reveals that 61% of consumers expect the brands they buy from to have clear sustainability practices.  

Some businesses are taking note. The research finds that ‘impact on local communities’ is now a critical sustainability metric for more than a quarter of companies (27%).  

From intent to impact 

As an increasing number of consumers have turned to brands to take the lead on sustainability, businesses have looked at what they can do to optimise their environmental, sustainability and governance (ESG) practices.  

For Nestlé, that means supporting the projects and initiatives that back up its own rhetoric with real community impact. The Nestlé for Healthier Kids programme is a good example. Its aim is to raise nutritional and health understanding and promote physical activity among schoolchildren, parents and teachers. 

The global initiative has seen Nestlé team up with more than 300 partners and is intended to reach 50 million children worldwide. “It’s about empowering communities,” says Cremades-Mathis. “Sharing knowledge and ensuring that those ideas are passed from one generation to the next.” 

Time for tough questions 

Consumers expect brands to extend their sustainability practices to demonstrate commitment to long-term goals that will benefit society and environment alike. And as the business environment is disrupted as it has been in 2020, that is truer than ever: consumers expect brands to act in ways that support workforces, customers and wider society. The likes of Nestlé will need to ask themselves some tough questions about how they operate. 

In 2009, the organization launched its Nestlé Cocoa Plan, a programme designed to ensure the long-term supply of cocoa and improve the lives of the farmers. Through the initiative, Nestlé distributed higher-yielding and disease-resistant cocoa trees to farmers while also providing support and training on good agricultural practices.  

The plan also includes efforts to stamp out child labour and encourage children to attend school, as well as a certification scheme for sustainably produced cocoa. And these initiatives have to flow all the way through to the end consumer, says Cremades-Mathis, who stresses the importance of supply-chain traceability and transparency: “We take pride in sourcing responsibly to support and develop thriving and resilient communities.”  

The whole package 

Nestlé has also expanded the focus of its sustainability efforts beyond product-sourcing to packaging. In 2018, the company announced a commitment for 100% of its packaging to be recyclable or reusable by 2025.  

The Longitude research finds that materials used in packaging are businesses’ greatest sustainability challenge, and this is especially difficult for a food producer: food safety is non-negotiable (and highly regulated), and longer-life products are an important part of the market. 

“It’s not just about doing the right thing ourselves – we also have to consider the downstream supply chain,” says Cremades-Mathis. For example, a Nestlé pilot scheme in Switzerland encouraged consumers to take their own containers to stores to fill up with products such as pet food and coffee from dispensers – rather than buying them pre-packaged.   

A race to relevancy 

Nestlé’s challenge is working with so many different brands globally: there is no single sustainability solution for all circumstances – from sourcing to sales. Its response is to bring the focus back to the communities it serves and on which it relies.  

“This is how we will stay relevant and bring value,” says Cremades-Mathis. “We have to be rooted in the notion of respect – for ourselves, for others and for our future.” 

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Smurfit Kappa has worked with the Financial Times to conduct a piece of research to answer some of the most pressing sustainability questions. Find out how the sustainability effect is reshaping businesses for the better and explore new business must-haves.

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Sustainability Survey