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
G4-EC7, Procurement practices G4-DMA, Supplier environmental assessment G4-DMA, G4-EN33, Supplier assessment for labor practices G4-DMA,
G4-LA15, G4-HR10, Animal welfare G4-DMA, G4-SO9, G4-SO10
Dairy
Dairy is our single biggest category by volume, with 15 million
tonnes of fresh milk and milk derivatives bought in 2014 4
through and sourced from Tier 1 suppliers.
Fresh milk and milk derivatives are used as ingredients in a
range of our foods and beverages, including ice cream,
beverages, confectionery, infant nutrition and culinary items.
Fresh milk: our ‘milk district’ model
To ensure a regular supply of high-quality fresh milk, we work
in true partnership with local farmers. This forms the core of
our milk district model, which was first used in the 1870s and
is still operating in 31 countries, including Brazil, Chile, China,
India, Mexico and Pakistan. An integral part of our Farmer
Connect programme, this approach helps us develop shorter,
more sustainable supply chains and drive positive change
through direct relationships with farmers and farming
communities.
Nestlé sourcing staff work with supply chain support
workers in the field to help about 352 000 dairy farmers who
supply our factories directly, many of whom are located within
our milk districts. With close links to farmers around the world,
Nestlé can provide facilities to support rural development
through its supply chain.
Nestlé milk districts benefit milk farmers and their families,
while milk and derivative products play an essential role in
customer nutrition. Milk contains good quantities of first-rate
protein, and is also an important source of energy, protein,
calcium, magnesium and phosphorus, as well as many
essential vitamins and trace minerals.
Sourcing safe, high-quality milk, a key ingredient for Nestlé,
is a chief priority, and procurement directly from farmers and
co-operatives makes traceability easier. To ensure quality, we
have an assurance plan with training and manuals detailing
good farm practices for each district; farms are assessed
regularly to ensure that these requirements are met.
How the milk district model works
Milk is supplied daily by farmers to our collection centres,
directly to our factories, or to contracted third parties. Often,
we collect milk in trucks that go around to small dairy farms.
The price paid varies according to the quality of the milk. Milk
is highly perishable so, in some cases, we also provide the
necessary storage and cooling infrastructure to maintain a
constant supply of high-quality milk to our factories, many of
which are located in the heart of our milk districts.
Our milk district model brings us close to the farmers on
whom we rely for quality milk – from small-scale producers to
large dairy farms – which means we understand the practical
problems that affect their businesses, and ours, over the long
term. Each farming environment has different individual,
regional or national characteristics and challenges, so we don’t
impose a one-size-fits-all approach; the relationships we build
with farmers enable us to identify their particular issues and
we work together to resolve them.
These challenges influence quality milk supply, responsible
sourcing and environmental sustainability. Our approach
means that whether it’s an individual farmer with one cow in
Sri Lanka or a large farming business in the United States,
every litre of milk we purchase will meet our stringent quality
and safety standards.
Our fresh milk is collected using our milk district model
First used in the 1870s in Switzerland, this involves the provision of:
1
Milk collection operations
that monitor quality and
safety from farm to factory
3
Transportation
and infrastructure
We ensure a secure
route to market. This
includes the storage and
cooling facilities needed
to keep milk fresh
5
Prompt payment
to farmers
10 100
Nestlé sourcing and
supply chain support
staff work in the field
Farmers provide us with
anything from less than
6 litres to more than
litres of milk
per day
5 000
2
Technical, animal
husbandry and
veterinary support
Technical assistance schemes for
dairy farmers are present in 96%
of the countries where we source
fresh milk
4
Financial assistance
39 600
Farmers benefited
from a total of CHF
36 million of financial
assistance in 2014
Nestlé’s milk report for 2015 is published in April 2016, which falls out of scope of the 2015 CSV reporting cycle.
The 2015 figure for amount of milk purchased will be published in the 2016 CSV report.
4 Nestlé’s milk report for 2015 is published in April 2016, which falls out of scope of the 2015 CSV
reporting cycle. The 2014 figure is, therefore, the most recent year for which we have complete data.
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