Tag: nestle

  • Nestlé Makes Bold Move: CEO Dismissed Due to Workplace Relationship Scandal

    Nestlé Makes Bold Move: CEO Dismissed Due to Workplace Relationship Scandal

    Nestlé, the powerhouse behind iconic brands like Nespresso and KitKat, has initiated a leadership shakeup following the dismissal of Laurent Freixe as CEO. This significant change comes after an inquiry into an undisclosed romantic relationship between Freixe and a subordinate, which was found to contravene Nestlé’s code of business conduct.

    A New Era at Nestlé Begins

    With impressive swiftness, Nespresso CEO Philipp Navratil has stepped into the role of CEO, assuming leadership of the multinational food and beverage giant. The board acted decisively, launching its investigation under the watchful eye of chairman Paul Bulcke and lead independent director Pablo Isla, with support from outside legal counsel. Bulcke expressed gratitude for Freixe’s contributions, emphasizing that the company’s values must remain at the forefront. “This was a necessary decision. Nestlé’s values and governance are strong foundations of our company,” he stated.

    A Veteran’s Journey at Nestlé Comes to a Close

    Freixe’s tenure at Nestlé began in France back in 1986. He played a vital role in guiding the company through tumultuous periods, including the subprime and euro crises. Before his recent promotion to CEO, he led the firm’s Latin America division and was appointed to the top job just last September, tasked with tackling sluggish consumer spending affecting Nestlé’s food and household goods.

    As concerns grew over Nestlé’s performance, evidenced by a nearly 25% dip in its share price over the past year, the company seeks stability amid a tricky economic landscape. Nestlé shares managed a slight gain, closing up 0.13% at 75.49 Swiss francs on the Swiss stock exchange, but the pressure remains on to deliver strong results.

    Profit Slump Signals Urgency for Change

    In late July, Nestlé announced a disappointing 10.3% decline in first-half profits, impacted heavily by lackluster consumer spending in China, despite passing on rising cocoa and coffee prices to its customers. As Navratil embarks on this new chapter, he is determined to steer the company toward recovery and growth. “The board is confident that he will drive our growth plans forward and accelerate efficiency efforts,” Bulcke affirmed, while Navratil embraced the company’s strategic vision and vowed to “drive the value creation plan with intensity.”

    Navratil’s journey with Nestlé spans over two decades, beginning in 2001. He has worn many hats, including leading the coffee and beverage sector in Mexico from 2013 to 2020, prior to becoming chief executive of Nespresso last July. The world will be watching closely as he takes the reins at Nestlé, but it’s hard not to wonder: will this experienced executive brew the perfect recipe for success amid the complexities of modern retail?

    Freixe’s dismissal isn’t an isolated incident in the corporate world. He joins a notable list of executives who have faced similar fates for relationships deemed inappropriate within their organizations. The likes of Bernard Looney at BP and Steve Easterbrook at McDonald’s have experienced the swift exit in the wake of such breaches, reminding the industry that corporate governance is still very much in focus.

    Questions & Answers

    What led to Laurent Freixe’s dismissal from Nestlé?
    Freixe was dismissed following an investigation into an undisclosed romantic relationship with a subordinate, which violated Nestlé’s code of business conduct.

    Who is taking over as CEO of Nestlé?
    Philipp Navratil, previously the CEO of Nespresso, has been appointed as the new CEO of Nestlé.

    What challenges is Nestlé currently facing?
    Nestlé is grappling with sluggish consumer spending in key markets such as China and has reported a 10.3% decline in first-half profits, prompting a need for rapid recovery and growth strategies.

  • Nestle Halts Production Of Vegan Kitkat Amid Rising Costs And Declining Sales

    Nestle Halts Production Of Vegan Kitkat Amid Rising Costs And Declining Sales

    Nestle, the multinational food and beverage company, has announced its decision to cease production of its vegan KitKat range after a four-year span. This decision is attributed to the escalating production expenses and declining sales figures.

    Background and Production Details

    The vegan KitKat, identified as KitKat V, was conceived at Nestle’s confectionery research and development center located in the UK. The product was initially launched in 2021 to serve as a plant-based substitute for the globally popular classic chocolate bar. However, the company disclosed that the manufacturing of this product necessitated the dedication of exclusive facilities, which escalated the operational costs considerably.

    As of now, the company has halted all production lines for the global Vegan KitKat version. A representative from Nestle shared this news, further highlighting that the remaining stock of this product will continue to be available in Tesco and Sainsbury’s stores until the current stock is exhausted.

    Global Trends for Plant-Based Products

    Nestle’s decision aligns with the observed deceleration in the demand for plant-based products worldwide. Market analysts have noticed a shift in consumer interest from processed alternatives to fresh produce. This change is propelled by consumers questioning the health benefits of plant-based options, which were previously regarded as healthier alternatives.

    The future of the vegan KitKat brand remains clouded in uncertainty. Nestle has not yet disclosed whether it might reconsider the revival of this brand should there be a resurgence in demand.

    Questions & Answers

    What led to Nestle discontinuing its vegan KitKat range?
    High production costs and diminishing sales were the primary factors that led Nestle to discontinue its vegan KitKat range.

    What was the vegan KitKat range?
    The vegan KitKat, labeled as KitKat V, was a plant-based alternative to the traditional chocolate bar. It was developed at Nestle’s research and development center in the UK.

    Is there a possibility for the revival of the vegan KitKat range?
    Currently, Nestle has not indicated any plans for the revival of the vegan KitKat range. However, the potential for reconsideration exists if there is a substantial increase in demand.

  • Nestlé Expands Maggi Seasonings To Uk And Malaysia Amid Rising Global Air Fryer Trend

    Nestlé Expands Maggi Seasonings To Uk And Malaysia Amid Rising Global Air Fryer Trend

    In a strategic move to capitalize on contemporary culinary trends, global consumer goods conglomerate Nestlé has launched its renowned Maggi seasonings in the United Kingdom and Malaysia this year. This step is part of a wider global expansion strategy for the popular brand.

    Modern Cooking Trends

    Nestlé’s decision to introduce Maggi seasonings to new markets is a calculated response to the rising global popularity of air fryers, particularly in the United States. The company’s CEO, Laurent Freixe, has noted that nearly two-thirds of American households now use air fryers as part of their daily cooking routines. Nestlé’s expansion aims to cater to this shift in consumer lifestyle and preferences.

    New Air-Fryer Range

    The first range of products that Nestlé will bring to these new markets includes air-fryer recipes for chicken and vegetable wraps. These will feature a variety of flavors, such as ‘Cheesy’, ‘Paprika & Garlic’, and ‘Tex Mex’ for the chicken wraps, and ‘Fajita’, ‘Street Taco’, and ‘Kebab’ for the vegetable wraps.

    Prior and Future Launches

    The UK and Malaysia launches follow the brand’s earlier entry into the markets of Mexico and Chile. These new markets will also benefit from Maggi’s online platforms, which offer a range of air-fryer recipes that consumers can easily replicate at home.

    In a previous collaborative effort, Nestlé Professional and the KitKat team launched the first chocolate beverage maker, proving the company’s constant innovation in the food and beverage sector.

    Questions & Answers

    What is Nestlé’s reason for launching Maggi seasonings in the UK and Malaysia?
    The launch is a strategic move by Nestlé to cater to the rising popularity of air fryers in home cooking, particularly in the US.

    What products will Nestlé introduce in these new markets?
    Nestlé will introduce a range of air-fryer recipes for chicken and vegetable wraps with a variety of flavors.

    Has Nestlé launched Maggi seasonings in other markets before?
    Yes, prior to the UK and Malaysia launches, the Maggi brand was introduced in Mexico and Chile.

  • Vietnam Health Inspectors Call for Probe into Possible Misleading Nestlé Milo Advertisements

    Vietnam Health Inspectors Call for Probe into Possible Misleading Nestlé Milo Advertisements

    A recent inspection has cast a shadow over Nestlé’s bold claim that its products are “proven to help children.” The provincial Department of Health revealed on Thursday that this assertion, prominently featured on packaging and in marketing materials, was misleading and lacked substantiating evidence.

    While the specifics of the violations remain under wraps, Nestlé Vietnam has yet to respond to these findings. The global food powerhouse based its claim on a study conducted in partnership with the National Institute of Nutrition. However, the institute contradicted Nestlé’s narrative earlier this week, stating that the study showed no significant effectiveness in improving the nutritional status of students after three months.

    Study Results Raise Eyebrows

    The examination focused on the effects of physical education combined with Nestlé Milo barley milk among 576 primary school students in Ninh Binh, conducted between June 2022 and March 2023. The study concluded that not only did the product fail to enhance nutritional status, but it also showed no improvement in cognitive abilities. Yet, it did highlight that physical activities paired with Nestlé Milo contributed positively to certain physical fitness parameters, including speed, strength, endurance, flexibility, and dexterity—proving that some gains can indeed be made at the gym.

    The National Institute of Nutrition has urged Nestlé Vietnam to reassess all communications and advertisements in light of the inspection results. It warned that any misleading information linked to the institute risks immediate removal.

    Previously, on May 15, Nestlé defended its claims, asserting that it relied on the study’s findings and had ensured compliance with relevant legal provisions before promoting its product benefits.

    Wider Implications for the Industry

    This revelation comes amid heightened scrutiny of the food and health supplement industries, with authorities uncovering numerous cases involving fake milk products, subpar health supplements, and dubious cosmetics. The tension has ramped up considerably, with several celebrities drawing fire for misrepresenting the merits of milk and functional foods.

    In response to these issues, on May 22, the Ministry of Health launched 15 inspection teams dedicated to examining pharmaceuticals, cosmetics, traditional medicines, milk, functional foods, and medical equipment nationwide over the next month. It’s a significant step forward in ensuring consumer safety, even if it means ruffling a few feathers in the process.

    Perhaps in this era of wellness hype, a little honesty could go a long way—who knew that sometimes, the truth packs the biggest punch?

    Questions & Answers

    What has the recent inspection revealed about Nestlé’s claims?
    The inspection found that Nestlé’s claim of being “proven to help children” was misleading and lacked sufficient evidence, leading to scrutiny from the provincial Department of Health.

    What did the study conducted with the National Institute of Nutrition conclude?
    The study indicated that Nestlé Milo barley milk did not effectively improve the nutritional status or cognitive abilities of students but noted some improvement in physical fitness through combined physical activities.

    What actions has the Ministry of Health taken in light of these findings?
    The Ministry of Health has established 15 inspection teams to investigate various health-related products and their advertisements across the country, aiming to uphold consumer safety amidst rising concerns about misleading marketing practices.

  • Nestle takes full control of Chinese confectioner Hsu Fu Chi

    Nestle takes full control of Chinese confectioner Hsu Fu Chi

    Nestle has acquired the remaining 40 per cent ownership in Chinese confectionery company Hsu Fu Chi for an undisclosed sum, after purchasing 60 per cent in 2011.

    Hsu Fu Chi, founded in 1992 by the Hsu family, is a well-known confectionery brand in China. Nestle acquired its original stake for $1.7 billion.

    The acquisition reportedly leverages Hsu Fu Chi’s distribution network to expand Nestle’s snacking and confectionery operations in China.

    “This move combines Hsu Fu Chi’s efficient operations and entrepreneurship with our proven innovation and renovation capabilities, accelerates the development of the Hsu Fu Chi brand and further reinforces Nestle’s presence in China,” said Nestle Greater China region CEO Zhang Xiqiang in a statement sent to Just Food.

    “It also demonstrates our long-term commitment to China and enhances our ability to grow our portfolio of international and local brands in this dynamic market.”

    Nestle announced its action plan last year, which included targeted investments in important categories as well as incremental cost savings of at least US$2.83 billion.

  • Nestle launches protein shots for US weight-loss drug users

    Nestle launches protein shots for US weight-loss drug users

    Nestle is launching protein shots in the United States which it says help suppress appetite for people looking to shed pounds, the latest effort by the world’s biggest packaged food maker to tap the booming market for weight-loss products.

    The manufacturer of Kit Kat chocolate bars and Nesquik shakes says its drink sparks a natural reaction in the body which is similar to, but far less powerful than, highly in-demand drugs for weight loss like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.

    The weekly weight-loss injections mimic an intestinal hormone called GLP-1 and curb people’s appetite, promoting a feeling of fullness.

    The shake, called Boost Pre-Meal Hunger Support, is to be consumed up to 30 minutes before a meal and is aimed at people taking GLP-1 drugs or other weight-loss medications. The roll-out started last month.

    “You get an increase in natural GLP-1 which helps in controlling the feeling of hunger. So this dose has a significant effect on satiety,” Stefan Palzer, chief technology officer at Nestle, told Reuters.

    The shots, sold for US$10.99 for a pack of four on Amazon.com and at some CVS stores, contain 10 grams of whey protein, 45 calories, 1 gram of sugar, and are fat-free. They are advertised as promoting a “Natural GLP-1 response to a meal.”

    Palzer said they could also help people maintain their reduced weight.

    Lora Heisler, chair in human nutrition and director of research at the Rowett Institute, said it was unclear if the shot could make a real long-term difference for people trying to lose weight.

    “I believe that this protein shot can help release a bit more GLP-1, but you can also possibly have a similar sort of release with a glass of milk,” she said.

    Earlier this year, Nestle started selling a new, $5 line of frozen pizzas and protein-enriched pastas in the United States designed for people taking weight-loss drugs.

    Analysts estimate the obesity drug market could be worth as much as $150 billion per year globally within a decade.

    When US retail giant Walmart said last year it saw a slight pullback in food consumption when people took the medication, it sparked a selloff in shares of companies including Nestle.

    The shot, whose formula Nestle has patented, is not intended to replace weight loss drugs and is less powerful than them, Palzer said.

    Nestle says the product is based on a mix of peptides which are digested quickly, giving the consumer an amino acid spike that then controls hunger.

    Whey protein micro-gels help people digest more slowly, meaning they interact much longer with receptors in the intestine that are releasing the GLP-1 hormone.

    In 2021, Nestle said 26 people with type-2 diabetes participated in a randomised study, consuming either a low-dose whey protein microgel or a placebo of water, followed by a meal designed to produce an adequate spike in glucose.

    One week into the study, participants who had been taking the whey protein were given the placebo, and those who had been taking the placebo were given the whey protein.

    Results showed that during the two hours after the meal, glucose levels were reduced by 22 percent in the whey-protein group compared with the placebo group. There was also a positive effect on the hormone GLP-1.

  • Nestle’s Smithtown factory gets a $32 million overhaul

    Nestle’s Smithtown factory gets a $32 million overhaul

    Food and beverage giant Nestle has invested $32 million in its Smithtown factory, aiming to boost the site’s manufacturing line.

    The funding will also introduce state-of-the-art technology and support an increased production capacity.

    James Garley, the site’s factory manager, said the investment reflects Nestlé’s commitment to support local manufacturing.

    “Over the next 12 months, the project will inject an estimated $20 million into the local economy and support almost 200 jobs as we construct a new building to house Milo production,” explained Garley.

    The Smithtown factory – which has been operating for over 100 years – manufactures Milo, Nesquik, Malted milk, and Nescafe mixes.

    “It’s a complex project, but the team will work to ensure the facilities continue to deliver the choc-malt crunch of Milo Australians have loved for generations,” Garley concluded.

    The upgrade is due to be completed by the end of this year.

  • Nestle begins work on ‘companion products’ for weight loss drugs

    Nestle begins work on ‘companion products’ for weight loss drugs

    Nestle on Thursday said it has started work on products to “companion” weight loss drugs like Novo Nordisk’s game-changing Wegovy, hoping to cash in on their growing popularity.

    The Swiss food giant’s CEO Mark Schneider said Nestle had not seen any impact from such drugs on sales so far, referring to the threat they pose to the packaged food industry that has spooked investors in recent weeks.

    Nestle shares fell this month after Walmart, the world’s biggest retailer, said it saw a slight pullback in food consumption with people taking appetite-suppressing drugs.

    “We’re working already on a wide range of products that could serve as companion products,” Schneider said during an earnings briefing, noting that some supplements can help with the “loss of lean muscle mass” and “rapid regain of weight”.

    “The largest parts of our portfolio will not be affected” by this new breed of weight loss drugs, he said.

    Globally, Nestle’s biggest businesses are coffee and pet care, while frozen food, confectionary and ice cream make up 15 per cent of sales.

    “We’re watching this carefully and will keep you updated,” Schneider said.

    Wegovy has been shown to help patients reduce body weight by around 15 per cent when used along with exercise and lifestyle changes. It is so far available in the United States, Norway, Denmark and, as of late July, Germany.

  • Nestle revamps coffee sustainability plan as climate challenges mount

    Nestle revamps coffee sustainability plan as climate challenges mount

    Food giant Nestle pledged on Tuesday to spend over 1 billion Swiss francs ($1.01 billion) by 2030 on efforts to source coffee sustainably, more than double its previous pledge, as challenges linked to climate change pose particular risks for the bean.

    Study after study has shown that by 2050 roughly half the land currently used to grow coffee, especially that of the high-quality arabica variety, could be unproductive thanks to rising temperatures, drought and disease.

    Multinationals are meanwhile facing increased reputational and legal pressure from consumers and governments alike to clean up their global supply chains in the fight against climate change.

    The European Commission has proposed several laws aimed at preventing and, in the case of forced labor, banning the import and use of products linked to environmental and human rights abuses.

    Nestle, which has already pledged to source all its coffee sustainably by 2025, said it is now also aiming, by that date, for 20% of its coffee to be grown using ‘regenerative’ agricultural practices.

    These include planting cover crops to protect soil, using organic fertilizers to improve soil fertility, and increasing the use of agroforestry and intercropping to preserve biodiversity – all to halve greenhouse gas emissions by 2030.

    The company, in a statement announcing its plan to double spending on sustainable coffee sourcing, said it is “committed to supporting farmers who take on the risks and costs associated with the move to regenerative agriculture”, and will provide programs aimed at helping them improve their income.

    A major coffee report published last year said there is little evidence efforts by the world’s top coffee roasters and traders to prevent human rights and environmental abuses are having any impact, with most farmers operating at a loss and unable to produce sustainably.

    The coffee sector is valued at $200 billion-$250 billion a year at the retail level, according to the report, but producing countries receive less than 10% of that value when exporting beans, and farmers even less than that.

    Around 125 million people around the world depend on coffee for their livelihoods, while an estimated 80% of coffee-farming families live at or below the poverty line, according to non-profit organisations Fairtrade and Technoserve.

  • Nestle to stop sourcing from Indonesian palm oil producer AAL

    Nestle to stop sourcing from Indonesian palm oil producer AAL

    Food giant Nestle plans to stop sourcing from subsidiaries of Astra Agro Lestari (AAL), a major Indonesian palm oil producer accused by environmental groups of land and human rights abuses.

    The move comes as multinationals face increased reputational and legal pressure from consumers and governments to clean up their global supply chains in the fight against climate change.

    Nestle, maker of KitKat chocolate and Nespresso coffee, told Reuters that following a recent independent assessment, it instructed its suppliers to ensure palm oil from 3 subsidiaries of AAL no longer enters its supply chain.

    It did not specify the claims again AAL other than to say it had been on its ‘grievance’ list for several months.

    The Swiss-based group expects it will not be using any palm oil from the AAL subsidiaries by the end of the year.

  • Nestle launches Milo flavoured KitKat

    Nestle launches Milo flavoured KitKat

    It’s official, the KitKat team is launching its biggest collaboration ever with the NEW KitKat packed with MILO – an iconic pairing bringing KitKat and MILO together for the ultimate Aussie break.

    Set to satisfy all chocolate-lovers, KitKat packed with MILO combines the classic crisp wafer and smooth milk chocolate Australians know and love, with a delicious MILO choc-malt fudge filling. The new range will be available in three mouth-watering formats for your break – block, bar and chunky – each boasting a memorable MILO flavour.

    Nestlé Head of Marketing (Confectionery), Joyce Tan said: “We’re beyond thrilled and proud to announce KitKat’s biggest ever collaboration with KitKat packed with MILO.”

    “We know KitKat lovers are passionate about how they eat their KitKat and similarly, MILO fans have unique ways of enjoying their hot or cold MILO. So now, we can’t wait to see how Aussies enjoy their KitKat packed with MILO!”

    KitKat packed with MILO is available from late July available in three formats: KitKat packed with MILO Block (170g, RRP $5.00), KitKat packed with MILO Bar (45g, RRP $2.00) and KitKat Chunky packed with MILO (47g, RRP $2.00. You can also pre-order now at www.kitkat.com.au/milo

  • Nestle buys New Zealand honey brand

    Nestle buys New Zealand honey brand

    Nestlé has added to its portfolio of health-focused assets with the acquisition of New Zealand business The Better Health Company.

    Financial terms were not disclosed. The Better Health Company (TBHC) is the company behind the supplement brand Go Healthy, as well as Egmont Manuka honey.

    Nestlé acquired the business from China asset-management firm CDH Investments and TBHC’s founding shareholders. CDH Investments first backed TBHC in 2016 when it became its majority investor.

    Demand for gold as an investment has grown at an average annual rate of 15% since 2001, but what impact is an ever-sharper focus on sustainable investing having on this most robust of asset classes? Invesco’s Christopher Mellor discusses the efforts being made to ensure ethical and environmental provenance for those looking to incorporate responsible gold into their investment mix.

    Gold has always been a popular investment – and why not? Long viewed as a good hedge against inflation and economic turmoil, the metal’s price has often tracked counter to market swings.

    Yet amid the continued enthusiasm for the precious metal, investors are also increasingly conscious about its provenance, with investment strategies intrinsically linked to environmental, social and governance (ESG) goals. Traditionally, investors could only gain exposure to gold by physically buying bars and coins, entailing delivery, storage and insurance costs. A recent development is the rise of gold exchange-traded commodities (ETCs), which remove the costs of physical ownership, but also present potential issues around ensuring environmental and ethical merits.

    The deal is the latest acquisition made by the world’s largest food company as it looks to take on more businesses centred on health and wellness.

    Paul Bruhn, the head of the Oceania business for Nestlé’s Health arm, said the Go Healthy and Egmont brands “complement our global portfolio of active lifestyle and health-and-wellness nutrition brands very well”.

    The transaction also includes a manufacturing facility in Auckland for minerals and supplements.

    Jennifer Chappell, the CEO of Nestlé’s business in New Zealand, said: “This will strengthen our presence not just in New Zealand, but more broadly across the region, with the Go Healthy brand which is already present in Australia, China, Singapore, South Korea and Vietnam, and the globally-known Egmont brand.”

    Last month, the Swiss food giant snapped up Brazil-based health foods and supplements business Puravida.

    In February, Nestlé made an acquisition in the area of “nutrition products” with a majority stake in US-based Orgain, a supplier of protein powders, snack bars and shakes.

    Last year, the group snapped up the vitamins and supplement brands of US-based The Bountiful Company in a deal valued at US$5.75bn. That transaction included the Nature’s Bounty, Solgar, Osteo Bi-Flex and Puritan’s Pride lines, as well as Bountiful’s private-label business.

    In May last year, we reported on a document issued among Nestlé executives the publication said stated more than 60% of the company’s mainstream food and drinks could not be considered healthy under a “recognised definition of health”.

    According to the FT, the presentation excluded from its analysis products in sectors such as infant formula, pet food, coffee and medical nutrition. In response, Nestlé issued a statement to say it is “working on a company-wide project to update its pioneering nutrition and health strategy”.

  • Nestle opens $90 million pet food plant expansion at Blayney

    Nestle opens $90 million pet food plant expansion at Blayney

    With the last two years seeing more people adopting pets, the Purina factory is now set to meet the growing demand for wet cat food in Australia and beyond thanks to the newly installed state-of-the-art high-speed manufacturing technology.

    As well, the Purina team has expanded to meet the increased demand, with 20 new jobs now created on site, creating cat favorites such as Felix, Fancy Feast, Pro Plan and Purina One.

    Nestlé Blayney Factory Manager Charlene De Wit said the new facility is a testament to Nestlé’s commitment to local manufacturing and support for the Central West community.

    “We are proud to produce quality Purina pet food for our much-loved furry friends across Australia and around the region, right here in Blayney.

    “Our expanded facilities will allow us to scale up production of single-serve wet cat food by over 120% – as well as the dry cat and dog food we already produce,” Ms De Wit said.

    The opening brings Nestlé’s total investment in the factory to more than $200 million over the past 10 years, as the business has increased production and developed new capabilities. The wet cat food facility, opened in late 2014, was developed to create premium products with the taste profile cats prefer, and the simplicity their owners prefer.

    The expansion will position Nestlé Purina as a key regional supplier, with both wet and dry pet food exported from Blayney to New Zealand, Thailand and Japan.

    The new facilities will also see a significant quantity of local ingredients used in production. More than 85% of raw materials used at the Nestlé Blayney factory will be sourced locally, including meats and grains.

    Ms De Wit continued, “We have an incredibly dedicated and highly skilled team here at Blayney. By bringing leading technology to our factory and continuing to use high quality ingredients in our product, we are even more confident that we will continue to enrich the lives of pets and the people who love them for years to come.”

    The Nestlé factory in Blayney began operations in 1989, and now features world-class facilities to manufacture brands such as Felix, Fancy Feast, Pro Plan, Supercoat and Purina One.

  • Nestlé pledges to improve sustainable farming practices, end child labour

    Nestlé pledges to improve sustainable farming practices, end child labour

    Nestlé today announced a new plan to tackle child labor risks in cocoa production. At the center is an innovative income accelerator program, which aims to improve the livelihoods of cocoa-farming families, while also advancing regenerative agriculture practices and gender equality. A cash incentive will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school and pruning among several others. Nestlé’s new plan also supports the company’s work to transform its global sourcing of cocoa to achieve full traceability and segregation for its cocoa products. As Nestlé continues to expand its cocoa sustainability efforts, the company plans to invest a total of CHF 1.3 billion by 2030, more than tripling its current annual investment.

    The income accelerator program (pdf, 11Mb) offers a novel approach to help support farmers and their families in their transition to more sustainable cocoa farming. The incentives will encourage behaviors and agricultural practices that are designed to steadily build social and economic resilience over time. With Nestlé’s new approach, cocoa-farming families will now be rewarded not only for the quantity and quality of cocoa beans they produce but also for the benefits they provide to the environment and local communities. These incentives are on top of the premium introduced by the governments of Côte d’Ivoire and Ghana that Nestlé pays and the premiums Nestlé offers for certified cocoa. This cocoa is independently audited against the Rainforest Alliance Sustainable Agriculture Standard, promoting the social, economic and environmental well-being of farmers and local communities.

    Cocoa-farming communities face immense challenges, including widespread rural poverty, increasing climate risks and a lack of access to financial services and basic infrastructure like water, health care and education. These complex factors contribute to the risk of child labor on family farms. Together with partners, including governments, and building on a promising pilot program, Nestlé’s new initiative sharpens focus on these root causes of child labor.

    “Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time,” said Mark Schneider, Nestlé CEO. “Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs and others in the cocoa industry, we can help improve the lives of cocoa-farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.”

    Creating cash incentives to grow income substantially

    The program rewards practices that increase crop productivity and help secure additional sources of income, which aim to close the gap to living income and help protect children. By engaging in these practices, families can additionally earn up to CHF 500 annually for the first two years of the program. The higher incentive at the start will help accelerate the implementation of good agricultural practices to build future impact. This incentive will then be leveled at CHF 250 thereafter as the program starts delivering tangible results. It is not paid based on the volume of cocoa sold and is inclusive to provide smaller farmers meaningful support, leaving no one behind. In a departure from normal practice, the program also offers financial incentives for the farmer’s spouse, who is typically responsible for household expenses and childcare. By dividing the payments between the farmer and the spouse, the program helps empower women and improve gender equality. Examples of practices that Nestlé is incentivizing include:

    • School enrollment for all children in the household ages 6-16;
    • Implementing good agricultural practices, such as pruning, which increase crop productivity;
    • Performing agroforestry activities to increase climate resilience, like planting shade trees;
    • Generating diversified incomes, for example through growing other crops, raising livestock such as chickens, beekeeping or processing other products like cassava.

    Payments will be delivered via a secure mobile service transfer that will ensure traceability directly from Nestlé suppliers to the intended recipient. Because cash flow throughout the year is often a challenge, cash incentives will be distributed when they are needed most. Based on feedback from farmers, this includes the back-to-school period and before the rainy season. Third parties, including International Cocoa Initiative and Rainforest Alliance, will work with Nestlé to monitor participation.

    Helping farmers implement sustainable, scalable practices

    Building on the positive results of an initial pilot in 2020 with 1,000 farmers in Côte d’Ivoire, in 2022 Nestlé will expand the program to include 10,000 families in the country, before extending it to Ghana in 2024. It will then assess the results of that test phase and adapt where necessary, before moving to reach all cocoa-farming families in its global cocoa supply chain by 2030.

    Nestlé will help ensure farmers have the resources, training and social and financial structures to make lasting changes by:

    • Enhancing the existing monitoring and remediation system to help identify, prevent and address child labor risk and increase school enrollment;
    • Offering families training through the Gender Action Learning System and on household financial planning and entrepreneurship;
    • Organizing and training local groups to perform pruning and other beneficial agricultural tasks within a given cooperative each year;
    • Providing income diversification opportunities for farmers and their spouses;
    • Helping set up Village Savings and Loans Associations (VSLA), focused on women, to encourage savings and provide loans for small business opportunities.

    Feedback and input from farmers and farmer cooperatives, as well as ongoing data collection and evaluation by third parties, will be used to inform, modify and improve the program as it scales up to more communities. In addition, independent oversight will be provided by a multistakeholder strategic advisory committee managed by IDH-The Sustainable Trade Initiative, a leading foundation that works to improve the sustainability of international supply chains.

    Tracing all cocoa from origin to factory

    As part of the program, Nestlé will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory. This new effort will help transform the supply chain of Nestlé and the broader industry. Nestlé will introduce a range of products with cocoa sourced from this innovative program, offering consumers the opportunity to support the improvement of the families’ livelihoods and the protection of children. This will start with a selection of KitKat products in 2023.

    “Our actions can help catalyze change on an important topic that is so close to our hearts. They will drive accountability and transparency across the industry, at a time when customers, employees and communities increasingly expect companies to deliver on their shared values,” said Magdi Batato, Executive Vice President and Head of Operations. “By increasing traceability at scale, we will help build consumer trust in our products and respond to the growing demand for responsibly and sustainably sourced cocoa.”

    Today’s announcement builds on Nestle’s longstanding efforts to tackle child labor risks in cocoa production. The company has invested in sustainability through the Nestlé Cocoa Plan since 2009. Through a robust monitoring and remediation system (pdf, 3Mb) instituted since 2012, 149,443 children have been assisted to protect them against the risk of child labor, and 53

  • Nestle trims L’Oreal stake with $10 billion sale

    Nestle trims L’Oreal stake with $10 billion sale

    Nestle SA said on Tuesday it would cut its stake in L’Oreal to about 20% by selling shares worth 8.9 billion euros ($10 billion) back to the French cosmetics brand, moving to reduce the weight of the beauty giant on its books for the first time in 7 years.

    The Nescafe maker’s holding in the beauty giant has been subject of intense scrutiny over the years, and the Swiss company has maintained its interest was both financial and strategic, even when activist investor Third Point urged disposal in mid 2017. Since then, L’Oreal shares have more than doubled.

    Seeking to reduce the weight of its L’Oreal holding while maintaining a level above 20%, allowing it to consolidate the investment on accounts, Nestle approached L’Oreal two months ago, kicking off a flurry of negotiations that involved chairmen of both companies, according to a source with knowledge of negotiations.

    Following the deal, Nestle said it would own 20.1% of L’Oreal, down from 23.3% previously. L’Oreal, meanwhile, would buy back shares representing 4% of its capital and cancel them at the latest on Aug. 29.

    L’Oreal, which is paying 400 euros per share, said the deal will have an accretive effect on the company’s earnings per share of more than 4% in a full year. The beauty company is paying with cash and debt.

    As a result of the transaction, which is expected to close in the coming days, the Bettencourt Meyers family, will see their stake rise to 34.7% from 33.3%, but will not be required to launch a takeover offer, as normally required for passing ownership thresholds above one-third of the capital.

    L’Oréal stock ended Tuesday up 3.96% at 424.8 euros while Nestle gained 0.1% to 121.9 Swiss francs.

    The packaged foods maker also said its board had decided to buy back 20 billion Swiss francs ($21.6 billion) worth of its shares between 2022 and 2024, adding that it would adjust this program should it make sizable acquisitions.

    Nestle said it would terminate its current share repurchase plan by the end of the year, having bought back shares for 12.7 billion Swiss francs or almost two-thirds of the program volume.

    L’Oreal around four years ago underscored https://reut.rs/3GqHqcP its readiness to buy Nestle’s 23% stake if the Swiss shareholder was to sell it.

    Nestle in October 2019 closed the sale of its skin health business for 10.2 billion Swiss francs, as the group moved to ditch underperforming businesses.