Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
Indirect economic impacts G4-DMA, G4-EC9
Farmer Connect and direct sourcing operations
Farmer Connect is a flagship Nestlé programme committed to the local sourcing of raw materials, by purchasing
goods directly from farmers, co-operatives or selected, trusted trade partners. Through Farmer Connect we
engage with approximately 760 000 farmers – mostly smallholders in developing countries. Almost half our dairy
ingredients and significant volumes of coffee and cocoa are purchased through Farmer Connect.
In this section, we explain more about the work of Farmer Connect and our direct sourcing operations,
and the activities we are carrying out with farmers to support their growth and development, such as SAIN
and agripreneurship.
Farmer Connect
For Nestlé, Farmer Connect helps ensure the supply of
high-quality agricultural raw materials, along with providing
traceability back to farm level. It enables us to engage with
farmers so that we can develop a supply chain that meets our
social, environmental and ethical requirements. It also helps
towards establishing consistent and fair pricing, improved
yields and reduced environmental impacts.
Additionally, Farmer Connect places an emphasis on
supporting farmers through activities, such as local sourcing
and assistance, farmer training, developing alternative income
streams and supporting women and young farmers. A key part
of this is agripreneurship, which nurtures farming skills and
business management. Around 10 900 sourcing and support
staff help us to deliver this assistance to farmers locally.
Number of farmers supplying directly to Nestlé
2015 760000
2014 695000
2013 686000
Number of direct sourcing staff
2015 1200
2014 1290
2013 1 200
Number of supply chain support staff
2015 9 700
2014 12 100
2013 11 400
The Sustainable Agriculture
Initiative Nestlé
SAIN is part of Farmer Connect. Through SAIN, we disseminate
and promote good agricultural practices and standards,
technical assistance schemes, and in-kind and financial support
instruments. These practices help farmers to achieve higher
yields, sell more of their produce and increase their income, so
that they can support their families and grow their businesses,
while meeting the highest sourcing standards.
Number of countries covered by SAIN programmes
2015 52
2014 51
2013 48
Farmer Connect markets covered by SAIN programmes (%)
2015 97
2014 100
2013 100
Improving the quinoa
supply chain
We have been sourcing quinoa in South America since 2009
for use in our Nestum 8 Cereals. However, there were
numerous supply chain problems: transparency was partly
lacking, there were quality issues and costs were high. In
addition, the grain had to be mechanically scarified, there were
challenges with the drying process and there were no local
grinding facilities.
Working with the Institute of Agricultural Research (INIA) of
Chile on the Sweet Quinoa Project, we sought to test different
high-yielding cultivars that required no pre-processing prior to
grinding. Since 2014, we have also trained 15 smallholder
farmers in Chile on good agricultural practices, such as weed
management, irrigation, plant protection, fertiliser application
and harvesting. This training is part of a three-year programme
financially supported by Nestlé and the Chilean Government. In
addition, we are working with a local supplier that produces
quinoa flour, as well as contracting directly with farmers and
providing advice on agricultural practices.
Thanks to these initiatives, we have achieved major
improvements in the quinoa supply chain. We now have full
traceability from farm to factory, yields have been double the
average, new technologies have improved the production
process, water and energy savings have been made and we
have better control of costs. We now aim to develop an
appropriate weed management strategy with business partners
and government agencies to help drive further improvements.
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