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-PR2, Product and service labelling G4-DMA, G4-PR3, G4-PR4, Compliance G4-DMA (Product responsibility)
In 2015, we focused on increasing awareness and
preventive measures in our facilities and upstream supply
chain, as well as technology-related improvements utilising
state-of-the-art detection systems. As part of our drive to
improve foreign body elimination, the main Standard for
Foreign Body Management that applies globally within Nestlé
was revised and issued in September 2014, and the
accompanying guideline was issued in March 2015.
Maggi noodles in India
In March 2014, the food regulatory authority in the Indian
State of Uttar Pradesh informed Nestlé India that it had
found monosodium glutamate (MSG) in samples of
Maggi noodles, which had a ‘No Added MSG’ declaration
on the label. In India, there are no restrictions on the use
of MSG in food, but food manufacturers that add MSG to
their products must declare this information on the
product packaging. Nestlé India appealed against the
findings of this analysis and the authorities ordered
further tests by a Government-accredited laboratory in
Kolkata.
In April 2015, the laboratory reported that it had also
detected MSG in the samples it tested. In addition, it
found that lead 1 levels in the test samples exceeded the
permissible limit. In June, Nestlé India decided to take
the product off the shelves nation-wide in view of the
developments on this issue and concerns around the
product, which had led to an environment of confusion
for the consumer.
In August, the Bombay High Court ordered that the
Maggi noodles be retested in three different independent
laboratories in India. Test results received from all three
laboratories in October showed that all of the 90
samples, covering six variants, were clear, with lead
much below the permissible limits.
We have always maintained that Maggi noodles are
safe. Nestlé India conducted more than 3500 tests,
representing in excess of 200 million packs in both
nationally and internationally accredited laboratories, and
all reports confirmed that lead results were well below
the permissible limits.
In early November, test results of newly manufactured
Maggi noodle samples were received from the three
laboratories, again with lead results well below
permissible limits. Soon afterwards, Maggi noodles were
reintroduced to market for sales to recommence.
Food safety and quality is Nestlé’s top priority and
consumer trust is of paramount importance to us. The
India Maggi noodle case is a good learning opportunity.
We will further improve our communication and
proactive collaboration with all stakeholders, including
the regulatory bodies, to deliver the best nutrition, quality
and trusted products to our consumers.
Vendor management and upstream
supply chain quality
Our Vendor Audit Management (VAM) system covers the
process from audit planning through to audit completion, with
key features including automatic audit requests, visibility of
past audits and follow-up of corrective actions. A new process
has been established in close collaboration with our
Procurement and Supply Chain team (Vendor Site Validation
process). The deployment of this new verification step
guarantees the purchase and delivery of materials to our
factories from approved vendor sites only. This allows us to
integrate our processes from vendor audit to material delivery
at the factory gate, emphasising once more that quality builds
across the value chain. In 2015, the new Vendor Site Validation
Process was implemented in 100% of our factories on GLOBE 2 .
Looking ahead, we will be facing increasing challenges in
our supply chains, including raising consumer expectations,
and tighter regulations, and ethical and environmental
sustainability requirements, as well as the risk of food fraud.
To build preparedness for these new challenges, our long-term
initiatives in 2015 have included collaborating with the SSAFE
initiative and United States Pharmacopeial Convention to
improve the assessment and management process of food
fraud; establishing the Nestlé Adulteration Prevention process;
and leading the creation of the Consumer Goods Forum–
Global Food Safety Initiative Task Force on End-to-End Value
Chain Traceability. Altogether, these initiatives aim to protect
the trust that consumers place in our products and brands,
and further heighten this trust by developing our capacity to
offer consumers the credible and accurate product information
that they demand.
Quality in distribution and retail
To help reduce inventory in the supply chain, we have
introduced new metrics to track our efficiency in the release
decision process. Our On-Time Usage Decision (OTUD) system
measures the ability to respect planning and includes a
complementary indicator to assess if the correct targets had
been established. At the end of 2015, the OTUD score was
91%, slightly higher than in 2014. However, the key
performance indicator for correct target setting was 82%,
a significant increase from its introduction in 2013.
In March 2015, we introduced a standard on Product Quality
on Retail Shelf to ensure that the desired and preferred quality
is achieved at the point when a consumer decides to purchase
our products. Retail quality checks have been successfully
conducted in many markets covering a wide variety of product
categories, with engagement from all relevant functions,
including Marketing, Sales and Supply Chain. In 2014–2015,
90% of markets had established cross-functional projects for
quality defect reduction on the retail shelf.
1 Lead is a naturally occurring substance in raw materials. Read more about Nestlé’s
monitoring of lead here.
2 Non-GLOBE factories (by nature of the project), joint ventures (China) & Nestlé non-food
factories (e.g. Nestlé Skin Health) are excluded.
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