Organizational Governance

Q&A:
How Partnerships Are Helping Nestlé Create Shared Value

It’s been a busy year for Nestlé – joining various initiatives and making strategic investments aimed at everything from boosting recycling infrastructure to developing bio-based packaging to improving consumer eating habits. We spoke with Nestlé’s President of Corporate Affairs, Paul Bakus, ahead of his appearance this week at SB’17 Detroit, to learn how the food giant is leveraging partnerships to achieve its many sustainability goals.

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It’s been a busy year for Nestlé – joining various initiatives and making strategic investments aimed at everything from boosting recycling infrastructure to developing bio-based packaging to improving consumer eating habits.

We spoke with Nestlé’s President of Corporate Affairs, Paul Bakus, ahead of his appearance this week at SB’17 Detroit, to learn how the food giant is leveraging partnerships to achieve its many sustainability goals.

Earlier this month, Nestlé Waters North America announced it was joining the How2Recycle label program; today, it announced a $6 million investment in the Closed Loop Fund to augment recycling infrastructure in the U.S. How will these efforts help Nestle reach its sustainability goals?

Paul Bakus: The $6 million investment in the Closed Loop Fund is just the latest in Nestlé’s efforts to enhance quality of life and contribute to a healthier future. Since 1994, Nestlé has reduced the plastic content of its water bottles by over 60 percent. Just last month, we reached a critical milestone in our use of recycled plastic content (rPET) in our water bottles, announcing 9 out of 10 of our California-based Arrowhead Mountain Spring Water bottles incorporate 50 percent post-consumer recycled plastic content. As a result, 1.8 billion bottles have been kept from landfills. Finally, we announced in March that we are teaming up with Danone and Origin Materials, a Sacramento-based startup, to accelerate development of 100 percent bio-based PET bottles at commercial scale.

This week, Nestlé Purina is also announcing its support of The Nature Conservancy’s reThink Soil initiative, a national, collaborative effort to help farmers improve soil health on croplands across the United States, by committing $1 million over five years. How does this initiative align with Nestlé Purina’s purpose/strategy?

Each Nestlé business creates shared value in ways that address its own specific priorities. As one example, Nestlé Purina and The Nature Conservancy have built a strong partnership over the last couple of years. Last year, Nestlé Purina’s support enabled the Conservancy to build upon decades of work along the Wabash River in Indiana, a critical tributary of the Mississippi River Basin, to reduce nutrient and sediment flow by installing wetlands and woodlands at key junctures. Nestlé Purina is further supporting the Conservancy’s work by contributing to the reThink Soil effort, which helps provide farmers additional best practices, information and incentives necessary to advance soil health, and in turn, secure their livelihoods and protect natural resources. Healthy soil is of critical importance to Nestlé and Nestlé Purina as it is the foundation for growing the high-quality ingredients for products that nourish people and pets. By partnering with other collaborators with the same soil health goal, we hope this improves the foundation of agricultural productivity for many generations to come.

Nestlé in the U.S. is about to release its 2016 Creating Shared Value report. The report shows 23 of its 52 CSV Commitment objectives completed, including five completed one year or more ahead of schedule. Of those that were not completed, why were they particularly challenging? Of all of the objectives, which have been most impactful to the business?

PB: The 52 objectives indicated in the report have varying target completion dates, ranging from 2016 to 2020. Largely, we achieved our 2016 objectives, plus as you reference, we completed five ahead of schedule. Some are more challenging than others, like our continuous journey to reduce sodium and sugar from our products. Taste is our number one priority, and maintaining the taste our consumers know and love is one of the biggest challenges we face when reducing sugar and salt. But we continue this important work because we are committed to helping improve the health of Americans. While we haven’t quite reached our 10 percent goals, we are proud of the 9 percent reduction in sodium compared to 2013 levels, equivalent to a reduction of 570 tons of salt, and the 6 percent reduction in sugar compared to 2013 levels.

For individuals and families, we’re committed to providing more of the choices they’re looking for. This year, we reformulated 1,830 products with nutrition or consumer preference in mind. We’re making changes across our most popular brands, including removing artificial colors and flavors, simplifying ingredient lists, and adding more options that are no GMO, gluten-free, or made with organic ingredients.

Nestlé is hosting the Good Food/Agriculture pavilion in the Activation Hub in Detroit this week – what types of discussions/activities will be taking place/what can attendees expect throughout the week?

PB: We are excited to host a robust line up of speakers and participants in our booth during the week. Partners include The Nature Conservancy, The Soil Health Institute, The Soil Health Partnership, Field to Market, Ducks Unlimited, Procter & Gamble, Quantis and the Closed Loop Fund, among others. Discussions will range from what healthy soil and sustainable agriculture look like, to how we can leverage the power of partnerships to solve some of the complex challenges facing our recycling infrastructure. We encourage attendees to stop by the booth to learn how Nestlé is delivering on our purpose and to pick up a copy of our 2016 Creating Shared Value report. We’re serving Nescafé Taster’s Choice coffee and Nestlé Toll House cookies, both emblematic of our rural development efforts through the Nescafé Plan and Nestlé Cocoa Plan.