Sustainability is biggest challenge, says Nestle

Sustainability is the biggest challenge for Nestle, according to its CEO Paul Grimwood.

Speaking at the 2010 IGD Convention this week, Grimwood highlighted dramatic climate and population change forecasts and water scarcity.

Grimwood revealed calls to its business relating to sustainability had risen from 15% to 50% last year.

“It’s interesting to see that even in recessionary times people are starting to care about what really matters – food, environment and family,” he said.

Grimwood said it was important for Nestle employees to be doing the right thing.

He said Nestle sourced and marketed throughout the world and, as a result, aimed to be at the leading edge of health and sustainability.

The company’s model was an overarching one, he said, but decisions were taken locally.

Grimwood stressed the importance of balancing growth and sustainability. Nestle is creating shared value by focusing on water management, rural development and nutrition, he said.

Grimwood reported on Nestle’s cocoa plan in the Ivory Coast. It plans to invest £65m in the scheme over the next 10 years, educating farmers and providing them with cocoa plants, which are more disease resistant and provide better yields.

In coffee, meanwhile, Nestle has a Nescafe plan and is working with the Rainforest Alliance. It aims to double direct deals with farmers, said Grimwood.

In palm oil sourcing it has partnered with the Forest Trust and is aiming to source 100% sustainable palm oil by 2015.

Grimwood said Nestle was able to drive the sustainability agenda in its own organisation. Only 1% of all waste is sent to energy recovery but husks and grounds previously sent to landfill are now powering 30% of the energy needs at two factories, he said.

In an ECR initiative, Nestle has partnered with United Biscuits to take trucks off the road. Packaging has also been reduced by 12.6% this year, he said. Initiatives included replacing plastic with recyclable card and reducing the size of Easter egg packaging.

Grimwood said Nestle had invested in plants and removed carbon. In the production of Nescafe Cappuccino it has reduced the amount of water and waste and benefited from reduced milk costs by supplying recycled waste to farmers for use as fertiliser.

Grimwood reported total water usage was reduced by 27% in 2009.

“The environmental opportunities are very, very significant,” he said. “It’s essential to take action for a sustainable future.”

Grimwood said money from energy savings and packaging reductions has been reinvested back in the business.

“Nestle follows this model globally. It’s a virtuous circle, which works for us and can work for you. You don’t need to be a Tesco, Sainsbury’s or Nestle for this to work better – you should all be looking to create that virtuous circle of investment. If you do that, we will build a world that’s sustainable and fit for all our futures,” he said.