Plant products for healthier, high quality foods Pierre Broun Nestlé R&D Center Tours

Outline Nestlé and Global trends Nestlé / Food industry procurement requirements The importance of sustainability Quality and benefits of plant raw materials Translating plant science and working together

Nestlé and Agriculture Nestlé is a major consumer of plant raw materials Grains Milk Coffee Cocoa Fruit and Vegetable Sugar Oils Nestlé buys around 12% of the world’s coffee and cocoa

Procurement at Nestlé Raw materials breakdown Raw Materials Services & Indirect Materials (S&IM) Raw Materials Packaging Materials Raw materials breakdown

World groceries exports (2007) Source: Worldmapper Groceries include sugar, honey, cocoa, chocolate, tea, mate, coffee (a tea-like drink) and spices. Almost half of this category, when measured in US$, is oils from vegetables and meats. Net exports including commodities tend to come from more southern latitudes (2007).

World groceries imports (2007) Source: Worldmapper 62% of all territories have net grocery imports, which means that the remaining 38% meet their demands (2007). Net exports tend to come from more southern latitudes: Asia Pacific and South America. There are however anomalies such as the United States, Canada and France. Further, Southern Africa has neither large net imports, nor large net exports.The highest value of net grocery imports is to Japan. Imports to Japan are one and a half times the value of those to the second largest importer, China. Further,the population of China is ten times larger than Japan. So, per person living there, Japan imports (net) sixteen times more groceries than China.

Outlook: World Population 2050E Source: Worldmapper By 2050 it is estimated that the earth's human population will be 9.07 billion. 62% of the people will live in Africa, Southern Asia and Eastern Asia - numerically this is the same as if all the world's current population lived just in these regions. All numbers shown here are estimates - estimates are never perfect.

Are we living in unusual times?

Long term commodity prices Source FAO - USDA

Commodity price volatility reflects turbulent times Source: IFCN

Procurement concerns of food industry Pressure on raw material prices and sustainability of supply: shrinking arable land, increasing needs of growing population, competition from non-food crops Soaring demand in emerging countries, especially BRIC Increasing consumer demand for sustainable agriculture, environmental protection Increasing demand for high-end or functional raw mats (e.g. premium coffee) Increasingly diverse consumer segments: geographies, age, diets, socio-economic status

Contrasted consumer segments More health benefits Less environmental impact Premium quality More « natural » Older consumers Affordable, light, nutritious products More traditional ingredients Local recipes Younger consumers

Different product segments Luxury High end, exceptional quality for occasional indulgence Excellent quality / health benefit for differentiated product Convenient, frequent consumption Nutritious, affordable Premium Mainstream products Popular Positioned Products

Plant raw material requirements Reliable supply Sustainability Safety Consistent, high quality Process-friendliness Required or desired quantitative attributes Required or desired qualitative attributes

Reliability of supply: climate change (will) affect(s) raw material sourcing: e.g. coffee Arabica Robusta Optimum temperature (yearly average) 15-24° C 24-30° C Optimal rainfall 1500-2000 mm 2000-3000 mm Growth optimum 1000-2000 m 0-700 m Climate change is gradually changing the coffee producing landscape e.g. Temperature dependency of Ugandan coffee production Right: +2C increases

Sustainability: agriculture weighs strongly on water consumption in Life Cycle Analyses

CO2 footprint: Life Cycle Analyses further highlight the strong contribution of agriculture

Ingredient quality is compatible with sustainability and should not be compromised Quality can mean : Safety Ingredient impact on final product: taste, color, texture Nutritional value Processability, shelf life

Custom-made varieties can build a robust competitive advantage Variability Original population Selection of superior individuals Preferred « Bernardo » basil for Buitoni pesto Successive selection cycles

Nestlé major health benefit focus areas Protection Digestive Comfort Healthy Recovery Weight Management Performance Growth & Development Skin Health & Beauty Healthy Ageing

Translating food product requirements into plant science objectives (and vice versa) Food objectives Safety Sensory experience Health benefit Processability Naturalness Economic, social, environmental sustainability Plant science objectives No toxicity at and after harvest Rich in taste and aroma precursors High in health-beneficial compounds Stability, extractability through transformation Weigh GM vs non-GM solutions Higher productivity Higher abiotic stress resistance

How can this translation take place Two or three-way collaborations between academia, seed and food companies Public support for fully integrated projects until proof of concept Aim for proof of concept at pilot scale Consider the entire product life cycle Select for maintaining or improving quality while building sustainability Understand the consumer and the constraints of the supply chain

Creating Shared Value through plant innovation Sustainable supply Sustainable farming Industry benefits Producer benefits Price Quality label Quality Traceability Identity preservation Preferred commercial link Consumer benefits Consistent and superior products