Nestle Paper

Hunter Baird

Nestle Case Study

Nestle is one of the largest food and beverage companies in the world. According to their website, “In the 135-year life of Nestlé, our fundamental approach to business has been the creation of long term sustainable value for our consumers, customers, employees, shareholders, and society as a whole.” Their objective of creating shared value (CSV) allows them to build long term and beneficial relationships with their stakeholders, comply with all legal requirements and ensure all activities that the company undertakes are sustainable and result in value creation for both the company and society at large. They remain committed to achieving a healthy profit, but throughout the company it is preached that this should not come at the expense of long term, sustainable development.

In presenting the trends and issues outlined in this case to Nestle’s board, I would first emphasize the corporate mission of creating shared value. It must be of the greatest importance in order to achieve sustainable growth and development. Allowing the board to understand how helping suppliers and everything up and down the supply chain highlights the initiatives being taken to address the ever changing business environment.

Next I would elaborate on consumers’ preferences and the changes that have occurred. During the first decade of the 21st century, consumer preferences had focused on more responsible and sustainable production. Nestle is now being more visibly held accountable for all of its products upstream. In response to this the company collected information on consumers’ priorities. During this study, the company found that many consumers were apt to paying more for proven responsibly produced products. This research gave the company the evidence it needed to invest in increased transparency and accountability upstream in its supply chain.

Finally I would discuss economic sustainability and the impact on Nestle’s bottom line and the environment, as well as the producer. As stated in the case study, “the term sustainability had traditionally been used in a purely environmental or social sense, and several platforms and certification schemes had been built around this focus. But as Nestle team member Stefan Canz explained, ‘You can’t claim sustainability purely on a certification scheme when you don’t know whether the farmer sees better business in producing other crops such as rubber, or if he will go completely out of business the next year.’” There is competition not only for the producers’ existing goods, but also for them switching to more lucrative production with alternative production activities. I would close by tying it altogether and stressing the importance of creating shared value.

In order for Nestle to improve its supply chain and operations, they must use their technologies in an appropriate manner. As mentioned previously, Nestle’s strategy of creating shared value has the upmost emphasis. It builds around three core topics: nutrition, water, and rural development. Nestle has made great strides in helping its producers and farmers make better use of their land and water. Nestle has used their improved irrigation technology “to help producers reduce water usage dramatically.” However, weak systems for transferring and incentivizing these practices has not allowed these practices to be adopted on a wide-scale.