1. The Sustainable Agriculture Initiative of Nestlé
S A I N
The Sustainable Agriculture Initiative of Nestlé
SWISSCAM
Comité de Meio Ambiente e Sustentabilidade
Sao Paulo - August 13, 2004

2. CT-Agriculture Tasks
Support sourcing of agricultural raw materials at qualities & safety, quantities and timing needed
Elaborate corporate agricultural policies and ensure their implementation
Identify opportunities for competitive sourcing of agricultural raw materials
Secure the required agricultural knowledge and competence within the Group
Provide technical assistance to NOCs and their suppliers (milk, coffee, cocoa, fruit, vegetables etc.)

3. Challenges Evolving towards Nutrition, Health and Wellness Company
Changing business environment
manufacturing strategies
Consumer concerns
food safety issues
Consumer expectations
manufacturer liability
new quality thinking
Increasing food requirements
growing population
limited natural resources

4. Consumer needs & expectations
ethics, fair trade
labor issues, rural life,
politics ...
Social Responsibility & Personal Values
???
perceived quality
environment,
technologies (GMOs),
animal health & welfare ...
tangible quality
Function
Conscience
Convenient
Safety
Access / Affordability

5. Challenges Help ensuring tangible quality & safety and
Identify relevant perceived quality criteria linked with agricultural raw materials
optimize related sourcing
support sustainable agricultural production methods (ecological - economical - social criteria)
elaborate with Markets, SBUs, CT-Units specific SAIN strategies with strict business focus, e.g. Mexico, B-C&B, B-CCB, CT-QM

6. Challenges in supply chain
Transparency, traceability from farm to table needed to avoid negative effects on:
NEMS ...
SAIN
Input
Providers
Farmer
Trade
Processor
Food
Industry
Trade
Retail
Consumer
quality & safety
efficiency & productivity
consumer perception
company image
branded products
???
ethics, fair trade
labor issues, rural life,
politics ...
environment,
technologies (GMOs),
animal health & welfare, ...

7. Food Industry Initiative mainstream agriculture
Integrated strategy
SAIN
Nestlé
Key raw materials
Direct sourcing
Preferred suppliers
Company internal Network
Countries
Agr. supply chain
Food Industry Initiative
support sustainable
agriculture in general
mainstream agriculture
pre-competitive

8. SAI Platform members Campina Danisco Dole Ecom Efico Findus Fonterra
Friesland Coberco
Groupe Danone
Kraft
McCain Europe
McDonald’s
Nestlé
Neumann Kaffee Gruppe
Sara Lee
Tchibo
Unilever
VOLCAFE

9. SAIN - Milk Achievements SAI - working group promoted GAP programs
Australia, China, France, Holland, UK, Pakistan ...
CT-IP target setting projects
US, Chile, Panama, Peru, Spain, France ...
SAI - working group
elaborate position paper, good agricultural practices

10. SAIN - Coffee Assist in production where direct sourcing China Vietnam
Mexico
Philippines
Colombia
Malaysia
Brazil
Ivory
Coast
Indonesia
India
Thailand
Purchasing on the market :
Direct procurement (partly) :

11. Example coffee Thailand
Key elements:
Quality assurance • Knowledge sharing
Traceability • Public Private Partnership;
communication of needs i.e. quantities & qualities
• train local producers
• PPP program
• plant genetic
• government program
• good agr. practices
• financing (third party)
• income diversified
• quality control
• quality payment
• Nestlé managed
• final quality control
• Third parties
Farm
Input
Farmer
Buying
Station
Transport

12. SAIN / SAI in coffee SAI-Coffee working group
Ecom, Efico, Kraft, NKG, Sara Lee, Tchibo, Volcafé
elaborate position paper, guidelines
pilot projects
Common Code for the Coffee Community (4C)
started via the DKV and GTZ
create code on sustainability and indicators - all stakeholders
4C and SAI objectives are complementary
UNCTAD & IISD - Coffee Sustainable Partnership (SCP)
open discussion forum - all stakeholders
complementary to SAI and 4C - collaborate; supported by International Coffee Organization

13. Nestlé Road Map Understand what enables sustainability
Set up tools to make sustainable performance tangible
KPIs for supply chain
Joint studies with Universities and R&D
Implement measurement & management system in supply chain
Collaborate in SAI working groups (Coffee, Milk, Cereals ...)

14. Elaborate sustainability indicators
Lead by University Bern - study indicators at farm level
collaboration of: SHL
Example: milk supply in N.E. China (smallholders <1ha)
Actual
Optimised

15. Conclusions Practices / Processes Indicators
"There is no reason to prophesy the future, except in
order to be very well prepared to face the future" (Pericles)
Practices / Processes
standards
Indicators
trends
Performance Measurement System
competitiveness