Creating Shared Value for Primary Producers
Nestlé sources the agricultural materials for its products from around the globe, directly purchasing much of these supplies from over half a million farmers. This practice of large-scale direct procurement has enabled Nestlé to form relationships with an estimated 111,800 primary producers and offer free technical assistance to encourage improved agricultural techniques. This assistance does not oblige farmers to sell their finished produce to Nestlé but has resulted in a higher crop quality mindset in the area. The program has reduced environmental impacts, enabling farmers to receive a higher price for their goods whilst securing for Nestlé a healthy environment and a reliable source of good quality primary products, both essential to the future success and growth of the company. Producing communities which have benefited from this assistance span the globe from China, Côte d’Ivoire to Columbia. Primary products obtained in this way include milk, cereals and cocoa.
Another unique way in which Nestlé creates shared value involves coffee producers in Thailand. Here, at no cost and with no future obligation for farmers to sell their coffee to Nestlé, the company provides free coffee plantlets of more productive varieties to help farmers improve their plantations. These new varieties are developed by Nestlé Research and are more resistant to disease, produce better yields and an enhanced taste. Together with good farming practices, such progress will help farmers improve production and increase their income, whilst ensuring Nestlé a supply of high quality green coffee in the future.
Under the Nestlé Pakistan-United Nations Development Programme (UNDP) partnership, and in accordance with our Creating Shared Value activities, 4000 women agricultural advisors have been trained in rural Pakistan. Their role is to provide advice to local dairy farmers about animal health, breeding and fodder production. This has helped raise the quality and value of the milk produced which in turn increases the health and economy of the local community and provides Nestlé with high quality fresh milk, a product that along with cocoa and coffee is one of the core raw materials used in Nestlé products.
Nestlé is aware of the complicated issues surrounding child and forced labour in cocoa growing regions. As part of its Creating Shared Value initiative and in partnership with The International Cocoa Initiative, an affiliation of companies, labour unions and non-government organisations, Nestlé is working to eliminate child trafficking and the worst forms of child labour. Nestlé is also funding a three-year sustainable cocoa project in the Côte d’Ivoire with the goals of combating child labour, improving school attendance, improving cocoa farmers incomes, protecting the environment and increasing HIV awareness.
