Nestle ceo Mark Schneider warns that the business must get ready for the storm as supply

chain
challenges are expected to intensity amid the global coronavirus pandemic.

In a video message delivered to nestle global workforce, the chief executive of the world's largest
food and beverage company said it is Nestle special responsibility to keep supplies following to
consumer globally.

The covid-19 situation has evolved further and we are dealing with a significant global challenge, he
observed. We would like to remind you of the special responsibility that a company like ours has at
the time. food and beverage products are essential to peoples lives. in moments like these our
purpose and values matter a lot to the people and communities we serve.

Schneider recognised the challenging personal and family situations many of the company's workers
are facing and paid particular tribute to front-line employees and factory workers. your commitment
and your dicipline are critical at this time to maintain business continuity. it is our priority to support
you in this important endeavor.

outlining the company's priorities to manage the coronavirus crises first and foremost Schneider
stressed that the health of the nestle workforce is crucial. the safety of all of us is paramount. we
can only make positive contributions and live our purpose and values if we stay healthy and avoid
spreading the virus.

Business continuity, he continued is key in this period unprecedented global disruption. Schneider
warned that the situation could give rise to significant challenges within the company's supply chain.

We need to focus our efforts on securing supplies, manufacturing and logistics every step of the way.

nestle is taking a number of actions to prepare for increased disruption to its operations and supply
chain. a spokesperson for the company elaborated we have a duty to ensure that much-needed
food, pet food and beverage products are available around the world. to achieve this, we are
working closely with our supply chain, distribution and retail partners. we are assesing the situation
on a day to day basis.

currently, most of the company's factories remain operational, the spokenperson told
foodnavigator. in some countries, we have paused production on a temporary basis due to
restrictions on movement introduced by governments. we are also repurposing resources in some
locations to ensure we meet evolving demand.

extra safety precautions have been introduced at nestle sites. in addition to our normal strict
hyginene standards, we have put in place additonal safety measures in our factories, office and
distribution centers- this includes providing personal protection equipment and the implementation
of social distance measures.

schneider cautioned that covid-19 pandemic couls mean supplies of ingrediants and materials are
interrupted. he called on procurement teams to begin stockpiling essentials.

for those areas that are not affected yet, get prepared by building inventories of critical supplies and
products. please get ready for the storm to hit because hit it will, the chief executive warned.

the current situation has brought some challenges for sourcing raw materials and nestle is working
to mitigate this. however, the company spokersperson downplayed concerns over any immediate
impact.
 there are some challenges brought about by the present situation for sourcing and raw material-
but we are working hard to amange this. overall, we dont't see a major impact on the supply chain at
this stage.

schneider concluded with a rallying call that emphasised nestle's 'resilience' and commitment to
continuing to serve the communities in which it operates.

https://www.foodnavigator-asia.com/Article/2021/04/12/Affordability-and-versatility-Nestle-
Malaysia-underlines-plant-based-strategy-with-health-concerns-trumping-sustainability-for-now?
utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright

Nestle malaysia has pegged product affordability and versatility as its main plant-based strategies
amid the official launch of the firm's first ever plant-based production facility in the Asean region.

The firm believes that, for now, it is consumer health concerns that will drive the category in the
country, but noted that sustainbility and ethical considerations were gaining traction.

When we last spoke to Nestle malaysia CEO Juan Aronols about the firm's plant-based plans earlier
this year, the facility had just been completed. Based within Nestle Malaysia's Shah Alam complex,
which itself measures 82,000 square metres, the Plant- Based Meal Solutions (PBMS) facility was
officially launched last week on April 7.

In addition to officially opening our site, we have also unveiled the Harvest Gourmet consumer
product range which will soon be available in retail stores and on e-commerce platforms - these will
complement the Out Of Home offerings we have already started to introduce to our HORECA
partners, Aranols said during the launch event.

these products are made with simple and natural meat-free ingrediants such as non-GMO soy,
wheat, beetroot, carrot and coconut oil amongst many others and do not contain any artificial
preservatives.

Speaking to FoodNavigator-Asia after the launch, Aranols added that affordability will be a very
crucial part of product strategy for this range, revealing that burger patties for example have a
recommended retail price of RM17.30 (US$4.19) per packet of three, putting each burger patty
around the RM5.77 (US$1.40) range.

All the other products have an RRP of RM15.60 (US$3.78) per pack.

I think the price is pretty comparable for the quality/ content- price point is important to use as only
with the provision of good value to consumers will be it be possible for us to grow this category fast,
he told us.

there are other plant-based products out there too which are mostly imported and rather expensive,
but we need to make prices affordables so these can be available to all Malaysia families- this is the
key to driving growth.
Another key factor here will be versatility coupled with locatiozation - according to nestle malaysia
business executive officer food business unit Geetha K.Balakrishana, the aim is to localise as much as
possible with these products.

we are working hard to localise in term of recipes -e.g. making chargrilled pieces into satay, and
minced meat into meatballs to be cooked as rendang.

it's really all about localization as this is very important to show consumers how these can used in
everyday local dishes and how these products are versatile enough to do so.

Just five plant-based RTC products have been launched under the Harvest Gourmet brand for now:
Stir Fry Mince, Ground mince, Chargrilled Pieces, Sensational burger, and Schnitzel, but the firm has
a 'long list of projects' in the works when it comes to making plant-based combinatons with local or
other asian recipes, according to Aronols.

https://janio.asia/articles/ecommerce-online-shopping-malaysia-covid-19/

Spending habits also changed after the MCO was implemented. People began saving more amid
increased uncertainty over job security and income, and have instead been purchasing primarily
essential goods like groceries, household supplies and even health supplements. Foot traffic to most
physical stores reduced significantly and non-essential businesses were ordered to cease operations
during the MCO lockdown periods.

But things aren’t all grim. Malaysians have been spending more time online and have shown more
willingness to purchase items online now. In fact, two-thirds of them are now more comfortable
with online shopping as shown in a September 2020 poll.3 Changes in behaviour such as needing to
work from home or exploring new hobbies while staying at home also present new opportunities for
eCommerce.

https://www.malaymail.com/news/money/2021/03/29/nestle-malaysia-remains-focused-on-
driving-business-to-meet-long-term-goals/1962100

KUALA LUMPUR, March 29 — Nestle (Malaysia) Bhd expects the Covid-19 pandemic will weigh
significantly on the market throughout the first half of 2021, although the progressive rollout of
vaccines will have a positive bearing on the health crisis.

https://www.thestar.com.my/business/business-news/2020/05/07/nestle-seen-focusing-on-
boosting-e-commerce

https://fifthperson.com/2021-nestle-malaysia-agm/

https://www.klsescreener.com/v2/news/view/702421/Affin_Hwang_says_Nestle_not_immune_fro
m_2020_blip_projecting_5_2021_earnings_growth

https://www.thestar.com.my/metro/metro-news/2021/07/27/two-new-flavours-for-coffee-brands-
ready-to-drink-series
https://www.minimeinsights.com/2021/04/28/nestle-malaysias-new-ready-to-drink-rtd-lively-tea-
to-debut-in-may-2021/

https://www.foodnavigator-asia.com/Article/2021/06/22/Looking-LIVELY-Nestle-Malaysia-s-new-
adaptogen-enriched-teas-tap-traditional-ingredients-for-stress-management

nestle malaysia's new adaptogen-enriched teas tap traditional ingredients for stress management

https://www.bursamalaysia.com/market_information/announcements/company_announcement/a
nnouncement_details?ann_id=3142912

From external and internal analysis, consumers are demanding healthier and
natural products due to the high intensity of the health-conscious awareness in the society.
Nestlé recognise the growth of tea consumption and stress levels in this modern society.
Nestlé believes that the time has now come to offer a range of innovative and refreshing
beverages that combine the stimulating benefits of the traditional herbs and fruits in a
modern, comfortable, exciting and delightful way! In May 2021, new ready-to-drink Lively
Tea is launched by Nestlé to help people reflect, refresh and recharge! In sugar, it is also
much lower than other tea-based beverages. Nestlé Malaysia's new range of adaptogen-rich
teas is intended to use traditional natural ingredients to attract stressed consumers to their
attention. As a result, Nestlé has meet its 'Good food, good life' mission and focus their
efforts on ensuring that their product brands enable healthier lives. This is also an opportunity
for Nestlé to meet the dietary habits and taste preferences of consumers.

The next issue is enforcement by government. During covid-19, restrictions to

reduce movement implement by government has affected Nestlé’s factory operation.
Although The National Security Council (NSC) has allowed manufacturing industries to
continue to operate during the pandemic of covid-19, the restrictions implement by
government is tighten the standard operating procedures (SOPs). There are strict instructions
from the government that manufacturers must ensure minimum utilization of workers and
rotation of workers must be implemented to reduce their risk of Covid-19 exposure. This will
cause Nestlé’s has limited workforce in their factory operations. In addition, government also
raise the penalty as they realise that have employers who violating the SOPs and gambling on
the safety and health of their own workers. Due to the impact of Covid-19, expenses
amounting to RM62mil was invested by Nestlé’s into pandemic relief efforts and
comprehensive measures to preserve employee safety and operational continuity. Since the
beginning of the COVID-19 outbreak, Nestlé have put in place strong safety and health
procedures across all work areas and improved communications for all staff to ensure they
are protected from the virus. This is the strength of Nestlé as Nestlé is looking to protect its
employees well during the outbreak of pandemic. Again, Nestlé has achieved its mission to
protect its employees especially the front-liners working in the factory when posed with a
crisis such as COVID-19.

Besides that, from internal analysis, Nestlé Malaysia implement rural development
projects that aim to improve the quality of life for local farmers while also ensuring a steady
supply of responsibly obtained raw materials. The COVID-19 pandemic revealed an even
higher importance in the enhancement of local raw ingredients for Nestlé in 2020. Demand
for local raw ingredients, notably chilli, rice and coffee beans, remained strong and
consistent. They remain steadfast in their mission to contribute to the development of thriving
communities, to help shape a more sustainable future for all. However, if the quality of the
harvest is not good, it will affect the quality nestle product and resulting in high amount of
losses for Nestlé. Moreover, rural worker in farm mostly is foreign worker. Foreign worker in
in the agricultural and plantation sectors have a high risk as potential Covid-19 clusters. If
they exposed to covid-19, it will cause a shortage of raw material. Inconsistency of harvest
will cause Nestlé need to find other resource to replace the raw materials. Therefore, working
closely with farmers in their supply chain is an opportunity and threat for Nestlé to secure a
high-quality supply of ingredients while fostering community development.

Lastly, Nestlé is leading the industry’s way into a greener future from internal
environmental analysis. In the report of the Break Free From Plastic Movement 2020, Nestlé
was one of the three largest polluters of plastic in the world. They also mention that Nestlé
retaining their spots as the world’s worst plastics polluters for the third year in a row. As a
result, their reputation will be affected and consumer will not support their product.
Therefore, Nestlé try to reduce their plastic packaging. This is will not only make their
product more environmental, also save their cost in packaging, the revenue will also increase.
In addition, Nestlé also failed to work to achieve water efficiency and sustainability across
their operations. In 2020, Nestlé was fined RM90,000 for excessive release on industrial
effluent. This will be a threat of Nestlé as it faced much negative effect on its reputation after
received financial penalties. Nestlé takes this problem seriously and is driving solutions for a
greener future by treat the water they discharge effectively and reduce their water
consumption. At their Shah Alam factory, they use a Direct Potable Reuse System (DPRS),
to reduces water usage by 25% at non-production areas. This will be a great opportunity for
Nestle to strengthen its position in order to lead the industry towards a greener future.
Lawsuits will have an impact on the company's goodwill and brand image. If Nestlé takes this matter
seriously and administers the conditions of the agreement between the two parties correctly, this
will be a fantastic chance for Nestlé to strengthen its relationships with other brands in order to
reach a common aim.

Lastly, from internal analysis, Nestlé is working hard to safeguard the environment by
environmentally sustainable business practices. This will be an excellent opportunity for Nestlé as
focusing on sustainability can add brand value and save costs through plastic and waste reduction
initiatives. However, in the report of the Break Free From Plastic Movement 2020, Nestlé was one of
the three largest polluters of plastic in the world, resulting in a weakness for Nestlé. Nestlé retained
their spots as the world’s worst plastics polluters for the third year in a row. They indicate that
Nestlé is one of the companies that claim to work hard to address plastic waste, but instead they
continue to pump out harmful plastic packaging for single use. In addition, Nestlé is exposed to suits
and legal proceedings that involve environmental matters. For instance, Nestlé failed to work to
achieve water efficiency and sustainability across their operations. In 2020, Nestlé was fined
RM90,000 for excessive release on industrial effluent. These will undermine the company reputation
as well as drive customers toward competitors and subsequently affect the sales and profits of the
company business.

The next issue is enforcement by the government. The Malaysian government has tightened the
standard operating procedures (SOPs) that Manufacturers must ensure minimum utilization of
workers and rotation of workers must be implemented to reduce their risk of Covid-19 exposure.
This will be an enormous threat for Nestlé’s and cause limited workforce in their factory operations.
The government is also raising the penalty for employers who violate SOPs and risk their employees'
safety and health. Nestlé tries to prevent potential claims and suits by legal authorities. As such,
expenses amounting to RM62mil were invested by Nestlé’s into pandemic relief efforts and
comprehensive measures to preserve employee safety and operational continuity. Since the
beginning of the COVID-19 outbreak, Nestlé have put in place strong safety and health procedures
across all work areas and improved communications for all staff to ensure they are protected from
the virus. This is the strength of Nestlé as Nestlé is looking to protect its employees well during the
outbreak of pandemic. Again, Nestlé has achieved its mission to protect its employees, especially the
front-liners working in the factory when posed with a crisis such as COVID-19.

The next issue is enforcement by the government. The Malaysian government has tightened the
standard operating procedures (SOPs) that manufacturers must ensure minimum utilization of
workers and rotation of workers must be implemented to reduce their risk of Covid-19 exposure.
This will be an enormous threat for Nestlé as limited workforce in their factory operations and
amount of products that they produce is decreasing during Covid-19 pandemic. However, Nestlé
ensure their production operate continuity and supply is maintained. For instance, expenses
amounting to RM62mil were invested by Nestlé into pandemic relief efforts and comprehensive
measures to preserve employee safety and operational continuity. Since the beginning of the COVID-
19 outbreak, Nestlé have put in place strong safety and health procedures across all work areas and
improved communications for all staff to ensure they are protected from the virus. This is the
strength of Nestlé as Nestlé is looking to protect its employees well during the outbreak of
pandemic. Again, Nestlé has achieved its mission to protect its employees, especially the front-liners
working in the factory when posed with a crisis such as COVID-19.
 continuitivity and consistency to ensure the your production in consistency 的 operation。 make
sure 生产不中断

and the productivity of their productition decrease.

If Nestlé violate SOPs and risk their employees' safety and health, the factory close.

Nestlé tries to prevent potential claims and suits by legal authorities. As such, expenses amounting
to RM62mil were invested by Nestlé’s into pandemic relief efforts and comprehensive measures to
preserve employee safety and operational continuity. Since the beginning of the COVID-19 outbreak,
Nestlé have put in place strong safety and health procedures across all work areas and improved
communications for all staff to ensure they are protected from the virus. This is the strength of
Nestlé as Nestlé is looking to protect its employees well during the outbreak of pandemic. Again,
Nestlé has achieved its mission to protect its employees, especially the front-liners working in the
factory when posed with a crisis such as COVID-19.