Nestlé Professional has launched Iced MILO for CoolPro, a simple, easy-to-use system with demonstrated ROI for commercial operators that dispenses cold beverages at the touch of a button. Read more
When you’re one of the world’s largest confectionery brands, you’re under the microscope. We live in a time where a more discerning, informed public are not only interested in the products a company is producing, but how they are making them – where are they sourcing their ingredients? What sort of packaging are they using? What are the products nutritional health benefits?
It’s not lost on Nestlé’s Oceania director of eBusiness, strategy and marketing, Martin Brown. It’s his job to not only sell the company’s message in the local environment, but make sure it is adhering to the best practices he and other strategists have put in place.
Brown knows that the younger consumers are the ones driving the conversation – and not only in terms of whether a product tastes good or not.
“If you look at the diversity of our population and the expectations, it is the younger consumers that are shaping our industry,” said Brown. “They are shaping a couple of key forces that are really important for us to consider. One is, they make choices on brands and consumption based on beliefs. They’re very much looking at the actions of the brand – what is behind the brand – particularly with the supply chain.”
No longer is it good enough to make a great tasting product under the banner of a worldwide known and trusted brand. A lot of food and beverage companies – and those in peripheral arenas like packaging – are employing people whose sole purpose within the conglomerate’s structure is to look after sustainability and traceability. This is because companies like Nestle know that social media and other modern trends have a huge influence on purchasing decisions.
Nestlé is looking at a variety of ways of making sure that it not only provides products from sustainable sources and can be traced back to the farm, but it is also taking steps to reduce its carbon footprint.
“As a company that operates 10 factories in the region, we have plenty of scope to influence that commitment. Part of those commitments is accelerating the use of renewable energy,” said Brown. “For instance, we use the spent coffee grounds in our Gympie factory as fuel to drive the energy in that factory.
“At our Smithtown factory, which is the home of Milo, we use sawdust from the local timber industry to power 85 per cent of the energy in that plant. These are good examples of clever renewable energy sources. We’re also committed across all of those operations to have zero waste to landfill by 2020 and are pretty close to achieving that.”
Globally, Nestlé has signed up to the RE100, which is a group of companies that have pledged to use 100 per cent renewable energy. The accord means that Nestlé has agreed to zero net greenhouse gas emissions by 2050 as part of the pledge to hold to the 1.5˚C maximum temperature increase through climate change.
When it comes to another hot-button issue for consumers – recyclability – Nestlé is committed to meeting its 2025 responsibility of its packaging being reusable or recyclable. Currently, 50 per cent of the materials it uses is recyclable, while 40 per cent is partially recyclable.
“We’re going to focus first on the 10 per cent that is non-recyclable,” said Brown. “We’ve got a negative list of materials that we are removing from all of our packaging. The cardboard is fine, however not all of the substrates used in flexible packaging are recyclable.
We have multi-layers of material that are not recyclable. That’s where we need to find solutions.”
These solutions will not appear out of thin air. Investment is needed, and Nestlé doesn’t mind putting its hat in the ring when it comes to spending money to find the answers that will lead to more sustainable packaging. Brown also realises that there are other issues that need to be addressed with packaging – recyclability is but one aspect.
“This is where the science comes in with regard to coming up with new packaging solutions because they’re not available right now,” said Brown. “We’ve invested in the Nestlé Institute of Packaging to work with the science community and the rest of the packaging community to develop novel solutions that are fully recyclable and/or compostable. These will be the replacement solutions for that 10 per cent non-recyclable packaging.
“If we can come up with solutions that meet consumer expectations of quality, tamper-proof food safety, and is relevant in a category that can fully eliminate packaging, that would be a good thing. We’re trialling those solutions already.”
Another hot topic is food trends. Two that have caught the eye of Nestle’s hierarchy are confectionery products with less sugar [see box story Satisfying the Sweet Tooth], and plant-based proteins. Again, it is the younger consumer driving the issue. In the case of the latter, it is not about getting rid of meat altogether, but about replacing one or two meals a week with plant-based proteins. Brown thinks there are many reasons for the growing trend.
“There’s health reasons,” he said. “They may also connect the dots between meat and greenhouse gas emissions. Ultimately, for them, it might be about living in a more sustainable environment. With our Harvest Gourmet products, and along with the rest of the plant protein industry, we are providing alternatives that make that transition seamless in a way that is pretty surprising. We think that it is going to grow quickly as a market opportunity.”
Brown said that Nestlé is looking to develop a range of meat alternatives – from chicken breasts to mince – that will give customers versatile options for food consumption. Then there are dairy alternatives, too.
“You can expect we will bring plant-based dairy options across a range of our beverage products,” he said. “We’ve seen that it is becoming popular in the way people are adopting plant-based milks into their out of home coffee consumption. That is definitely an opportunity for in-home coffee consumption as well.”
And what about another, albeit minor, trend of insect-based proteins? Brown acknowledges that it is an idea the company might look at in the future, but there is nothing in the pipeline at the moment.
“We’re aware of insect-based proteins. They’re probably not mainstream enough for us to look at yet,” he said. “We’re blessed at being in a pretty resource-rich environment so we’re not quite yet at the insect level. It’s an imaginative solution, which is arguable very sustainable and we should never rule it out.”
Brown is confident that Nestlé is on target to not only continue meeting the needs of its traditional consumers, but also encompass new food technologies and trends that will be entering the food chain over the next 5 to 10 years. It is not only about keeping the taste great, but making sure the brand keeps its reputation.
“As we continue to offer more choice and lift the nutritional credentials of all our products, it is important to remember that any change has to be underpinned by great taste. And with that, will come trust – something that is very important to any brand like Nestlé.”
Chocolate and coffee – two items that tick all the endorphin boxes when consumed. Debating traceability of products, sustainability in packaging, and energy efficiencies during the production process are all well and good, but what’s the point if the key ingredients no longer exist? No ingredients means no products. Coffee beans and cocoa plants are grown in a narrow window of land on the equator. The main producers are in sub-Sahara African and the equatorial climate of South America. A recent article in Business Insider titled Chocolate is on track to go extinct in 40 years, concentrated on how the aforementioned strip of land is set to shrink due to climate change. Cacao plants, which product the cocoa for chocolate, need certain temperatures to grow and that is starting to change. However, that is not the main issue, because if humanity does get to reverse the more undesirable effects of climate change, there is another more urgent problem – will there be cocoa farmers to produce the crop?
It is an issue that the likes of Nestlé and Mars are taking head on. They realise without cocoa, a large portion of their business is affected. It is with this in mind that Nestlé’s Martin Brown explains why the company’s attitude towards its primary producers is holistic. The company knows that trying to buy the biggest amount of cocoa at the cheapest price possible is short-sighted. Long-term viability is needed and is something that the company champions. With more than 70 per cent of the world’s cocoa being produced on two million small farms in Ghana and Cote d’Ivoire, logistics can be challenging.
“The reality is that a lot of these communities are in undeveloped economies and live in challenged social spaces, so we have to help them resolve things such as unsafe work practices,” said Brown. “They’re complicated problems to solve that need total integration by the government across all industries.”
Brown said that in 2014 Nestlé was one of the first major companies in Australia to use 100 per cent sustainable cocoa. He said the company is committed to paying a premium to all farmers it buys through. The company also likes to make sure its suppliers are in compliance when it comes to eliminating unsafe child labour work practices and ensuring children go to school.
“We are also eliminating the use of unsafe pesticides,” said Brown. “We’ve built schools in farming communities to ensure that their kids are getting educated. We’ve distributed new cocoa plants. We’ve renewed the cocoa plantations to drive productivity in their farms. We’ve educated farmers on how to look after their farms better.”
A lot of actions undertaken by food conglomerates are driven by consumer expectations. However, Brown also knows that goodwill in these communities goes a long way. Because if climate change does get addressed, and the standard of living is accelerated, there are other issues that will also need addressing. Only collaboration between the farmers and businesses will solve them.
“There are a numbers of reasons why the cocoa supply has been under threat,” said Brown. “First, cacao trees are at their most productive between 2-20 years of age. If they are not renewed and the tree is not continuously replenished, productivity drops, and drops away sharply.”
Next, if the farming methods to optimise the layout of a farm – from ventilation between trees, right fertilisation methods, pruning and cropping of the trees – isn’t maintained, the productivity of the tree is reduced. Then there is the issue whereby farmers might not grow the crop anymore because they are not getting the economic outcome of it that another crop might provide.
“Another reason why you might have a compromised future with the cocoa crop is that the next generation don’t want to farm,” said Brown. “The next generation might leave farm communities because the conditions are just not good enough. They are not liveable and those meant to be taking over the farm have higher expectations of quality of life. And that should be everyone’s expectation – that the next generation gets to lead a higher quality of life or has the opportunity.”
Nestlé has launched an improved Milo recipe with 25 per cent less sugar for the Indonesian market.
Beside the lower sugar content, Nestlé Milo’s innovation is also manifested through the enrichment of malt, vitamins and minerals.
Nestlé Indonesia business executive officer of the beverages business unit, Prawitya Soemadijo, said malt is an energy source that signifies the unique and delicious taste of Milo that has long become part of Indonesian families’ daily lives.
“We also increased the vitamins and minerals content, such as vitamin B3, B6, B12, C, D, calcium, phosphorus and iron.
“We hope this healthier and tastier Milo can continue to support children to ace their daily activities.
“Our commitment to enhancing quality of life and contributing to a healthier future is what motivates Nestlé’s innovation and renovation efforts in bringing in MILO with 25% less sugar to Indonesian families,” said Soemadijo.
Nestlé Milo is also encouraging Indonesian families to adopt an active lifestyle through a number of programs such as the Milo Football Championship and a Milo Badminton Competition.
Assistant to the deputy of the coordinating ministry of human development and cultural affairs, Meida Octarina, said it is a good move in helping the government to address nutritional challenges, particularly among children.
“Beside focusing on the fulfillment of balanced nutrition, active lifestyle is also a vital element towards healthier Indonesians. We hope in the future, there will be more companies like Nestlé Indonesia involved in providing not only healthier products, but also organising programs to encourage active lifestyle,” said Octarina.
Nutrition expert and professor at Bogor Institute of Agriculture, Dr Ali Khomsan, said a healthy lifestyle from an early age will determine a child’s growth, development and quality of life during adulthood.
“A child with healthy eating habits will have a lower risk of suffering non-communicable diseases such as obesity, hypertension, stroke, diabetics and heart attack when they become an adult.
“This is why it is important for parents to ensure balanced nutrition for their children,” said Khomsan.
Nestlé has invested approximately $AUD122 million in a new beverages factory and noodle line in Malaysia. Both facilities are located in Nestlé’s largest manufacturing site in the country, in the city of Shah Alam, which employs close to half of Nestlé Malaysia’s workforce.
The new factory, which cost $AUD 93 million, is Nestlé’s eighth in Malaysia. It will produce Ready-To-Drink products, including Milo, Nescafé and Nestlé Omega Plus, for which Nestlé is seeing rising demand.
Building on Maggi noodle’s growing popularity in the country, where 1.7 million single packs of the product are sold every day,
Nestlé has also invested around $AUD 30 million in a new high-capacity noodle line to produce Maggi Curry Noodles, a favourite among Malaysian consumers.
Over the past two years, Nestlé has invested more than $AUD192 million as part of its long-term growth strategy in Malaysia.