IBM REPORT ON NESTLE

➢ Submitted to: Mm Tehreem

➢ Subject: International Business Management
➢ Section: BBA 7th B

➢ Submitted by
• Sana abid (21511051002)
• Isra Bibi (21511051013)
• Nayab Fatima (21511051015)
• Sidra Waheed (21511051018)

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 IBM REPORT ON NESTLE

Executive Summary

Nestle is one of the top FMCG companies in the world. Since its founding in Switzerland, it has spread
to more than 100 countries worldwide. It has been providing people with hygienic meals and a respectable
standard of living all across the world. It operates branches and subsidiaries in more than 70 countries.
Condensed and powdered milk, infant meals, chocolate, cheese, instant coffee and tea, sauces, and frozen
goods are among its offerings. Its beginnings may be traced back to 1866, the year Henri Nestlé formed a
company in Switzerland to produce the first infant formula, and the year the Anglo-Swiss Condensed Milk
Co. was founded. They combined to become the Nestlé and Anglo-Swiss Condensed Milk Co. in 1905. The
first milk chocolate and the first instant coffee were both made by Nestlé and released under the brand
Nescafé in 1937. In addition to those companies, it also bought out a number of others, including Crosse &
Blackwell in 1960, Stouffer Corp. in 1973, Carnation Co. in 1984, and Ralston Purina pet foods in 2001. The
business has maintained its position as the largest food firm in the world thanks to acquisitions. Nestle faces
numerous difficulties, particularly external ones that seem to be becoming worse every day. But these also
bring with them opportunities that should be investigated. Because of its high-quality products, customer
loyalty, and trust, Nestle enjoys high reputation with consumers. Additionally, it has the potential to
collaborate and create alliances with other regional businesses in order to enhance their reputation in the area
in which they are headquartered. Dynamism brings new trends that must be embraced in order to succeed in
some markets. In order to keep ahead of the competition, businesses must think critically and develop plans.

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Table of Contents
1 Introduction .......................................................................................................................................5

1.1 Nestlé headquarter in Vevey .......................................................................................................5

1.2 Henri Nestlé ................................................................................................................................6
2 Financial data of Nestle ......................................................................................................................6

3 Joint Ventures of Nestle ......................................................................................................................6

4 Board of directors ..............................................................................................................................7

5 Nestle Mission and Vision Statement ..................................................................................................7

5.1 Mission Statement .......................................................................................................................7

5.2 Vision statement ..........................................................................................................................7
6 Nestle product line ..............................................................................................................................7

6.1 Powdered and liquid beverages ...................................................................................................8

6.2 Pet Care ......................................................................................................................................8
6.3 Health and Nutrition ...................................................................................................................8
6.4 Cooking.......................................................................................................................................8
6.5 Dairy Products ............................................................................................................................8
6.6 Confectionery..............................................................................................................................8
6.7 Water ..........................................................................................................................................8
7 Strategies of Nestle .............................................................................................................................9

7.1 Business level strategies of Nestle ................................................................................................9

7.2 Corporate Level Strategies of Nestle ......................................................................................... 10
8 Nestle international operations ......................................................................................................... 10

8.1 Starbucks Corp. Licensing Deal .................................................................................................... 10

8.2 Gerber Products Co. ................................................................................................................... 11
8.3 Purina Pet Care .......................................................................................................................... 11
8.4 Atrium Innovations Inc. .............................................................................................................. 11
8.5 Stouffer’s ................................................................................................................................... 11
8.6 Freshly ....................................................................................................................................... 12
8.7 The Bountiful Company .............................................................................................................. 12
9 Nestle modes of entry in international markets .................................................................................. 12

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9.1 Ratio of increase in income ......................................................................................................... 12
9.2 Enter emerging markets ............................................................................................................. 12
9.3 Small niche ................................................................................................................................ 12
9.4 Customization ............................................................................................................................ 13
9.5 Autonomy to local branches ....................................................................................................... 13
9.6 Buying small companies ............................................................................................................. 13
10 Sustainability at nestle ...................................................................................................................... 14

10.1 Promoting nutrition and health................................................................................................. 14

10.2 Climate action ........................................................................................................................... 14
10.3 Waste reduction ........................................................................................................................ 14
10.4 Protecting nature ...................................................................................................................... 14
10.5 Water stewardship .................................................................................................................... 15
10.6 Human rights ............................................................................................................................ 15
10.7 Caring about our people & communities................................................................................... 15
11 Nestle political risk ........................................................................................................................... 15

12 International logistics of Nestle ......................................................................................................... 16

12.1 Reducing GHG emissions through rails .................................................................................... 16

12.2 Distribution Channel................................................................................................................. 17

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GOOD FOOD GOOD LIFE

1 Introduction

N
estle is one of the top FMCG company in the world. It was established in Switzerland and
is now found in more than 100 nations across the world. It has been delivering hygienic
food and assuring a decent living for people all over the world. They have been promoting
their products by meeting the demands of every age group of consumers. Nescafe, Gourmet, Kit Kat,
Maggi, Nestea, and many more well-known brands are among them (Nestle, 2012). It had to develop
marketing tactics for its products while considering the preferences and tastes of customers living in
various nations. Nestle had a difficult time establishing its position because ethnocentric goods were
already readily accessible in the home nations. To learn more about new nations' business environments
before going global, they have embraced the global culture. By expanding the line extensions of one
brand in particular, it has been concentrating on its brands and entering the market. By providing its
products and opening its stores in public spaces for brand reinforcement, nestle maintains its market-
leading position. Nestle has prioritized and spent money on research and development projects. The
secret to Nestle's success is their use of foreign direct investment to operate in several nations.

1.1 Nestlé headquarter in Vevey

Two different Swiss businesses that would ultimately come together to become Nestlé were
established in 1867, giving origin to the business. Charles A. and George Page, two brothers from Lee
County, Illinois in the United States, founded the Anglo-Swiss Condensed Milk Company in Cham in
August of that year. Henri Nestlé created a milk-based infant meal in September at Vevey, and he
quickly started promoting it. Both corporations quickly extended their operations across Europe and the
US in the next decades. (Henri Nestlé retired in 1875, although the business continued to be known as
Farine Lactée Henri Nestlé under new management.) Anglo-Swiss began producing infant meals with
milk in 1877 and in the following year the Nestlé company added condensed milk.

Nestlé Headquarters in Vevey, Vaud, Switzerland

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It is the largest publicly held food company in the world, measured by revenue and other metrics,
since 2014Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee
and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine
of Nestlé's brands have annual sales of over 1 billion CHF (about US$1.1 billion) including Nespresso,
Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has 447 factories, operates
in 189 countries, and employs around 339,000 people. It is one of the main shareholders of L’Oréal, the
world's largest cosmetics company.
1.2 Henri Nestlé

As a result of the acquisition of the Fabrique de Produits Maggi SA (established 1884) and its holding
company, Alimentana SA of Kempttal, Switzerland, the firms combined in 1905 to form the Nestlé and
Anglo-Swiss Condensed Milk Company, which they kept using until 1947. Maggi was a well-known
producer of soup bases and associated products. The current name of the business was chosen in 1977.
The corporation had plants running in the United States, the United Kingdom, Germany, and Spain by
the turn of the century. Government contracts during World War I increased the need for dairy products,
and by the end of the war Nestlé's production had more than doubled. After the war, government contracts
dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly,
streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products,
with chocolate the company's second most important activity.

The company has been associated with various controversies, facing criticism and boycotts over its
marketing of baby formula as an alternative to breastfeeding in developing countries (where clean water
may be scarce).

2 Financial data of Nestle

3 Joint Ventures of Nestle

Joint ventures include:

• Cereal Partners Worldwide with General Mills (50%/50%)

• Beverage Partners Worldwide with The Coca-Cola Company (50%/50%), closed in 2018.
• Froneri with PAI Partners (50%/50%)
• Lactalis Nestlé Produits Frais with Lactalis (40%/60%)
• Nestlé Colgate-Palmolive with Colgate-Palmolive (50%/50%)
• Nestlé Indofood Citarasa Indonesia with Indofood (50%/50%)
• Nestlé Snow with Snow Brand Milk Products (50%/50%)
• Nestlé Modelo with Grupo Modelo
• Dairy Partners America Brasil with Fonterra (51%/49%)
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4 Board of directors
The board is composed of:

• Paul Bulcke, chairman and former CEO of Nestlé

• Andreas Koopmann, former CEO of Bobst
• Beat Hess, former legal director/general counsel for ABB Group and Royal Dutch Shell
• Renato Fassbind, former CEO of DKSH and former CFO of Credit Suisse
• Steven George Hoch, founder of Highmount Capital
• Naina Lal Kidwai, former CEO of HSBC Bank India, country head for HSBC in India
• Jean-Pierre Roth, former chairman of the Swiss National Bank
• Ann Veneman, former United States Secretary of Agriculture and director of UNICEF
• Henri de Castries, former CEO and chairman of AXA
• Eva Cheng, former executive vice president of China and Southeast Asia for Amway
• Ruth Khasaya Oniang’o, former member of the Parliament of Kenya, current professor at
Friedman School of Nutrition Science and Policy
• Patrick Aebischer, former president of École Polytechnique Fédérale de Lausanne

5 Nestle Mission and Vision Statement

5.1 Mission Statement
“Nestlé is the world's leading nutrition, health and wellness company. Nestle mission of "Good
Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide
range of food and beverage categories and eating occasions, from morning to night.”
5.2 Vision statement

“To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder
value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred
products.”Nestle product line

6 Nestle product line

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Infants, young children, individuals who are concerned about their health, and athletes who desire
a performance boost are all served by Nestlé’s diverse product lines. Because Nestlé R&D has always
concentrated on developing products with micronutrient fortification to address deficiencies, they can
aim to develop an additional product line with a range of milk products that cater to the management of
elderly health thanks to their expertise in the field and in the food and nutritional sciences.

6.1 Powdered and liquid beverages

The powdered and liquid beverages segment includes coffee, cocoa, malt beverages, and tea
categories. This business features major brands such as Nescafé, Nespresso, and Milo. It is the
most selling segment worldwide.
6.2 Pet Care
Pet care segment includes major brands such as Go Cat, Lucky Dog, Pro Plan, Purina ONE,
Gourmet, and Merrick, among others. They are the second in most selling products in product
line of Nestle.
6.3 Health and Nutrition
The nutrition business segment includes infant formula and baby food. In addition, Nestlé Health
Science (NHSc) is engaged in medical nutrition, consumer care, and vitamins, minerals, and
supplements.

6.4 Cooking
The prepared dishes and cooking aids segment offers a wide range of daily staples – from
bouillons, soups, ambient, and chilled culinary products – to frozen food and pizzas. Through
brands including Stouffer’s, Maggi, and Buitoni, the company is focusing on renovating its
product portfolio with more natural, tasty, and healthy ingredients.
6.5 Dairy Products
The milk products segment offers dairy products under the Nido brand. In addition, the
company’s coffee creamer business is based on constant innovation with a market‑leading brand,
“Coffee Mate”. With regards to ice cream, the company offers a wide range of indulgent
products, from affordable prices to premium offerings.
6.6 Confectionery
The confectionery segment includes the global brand – KitKat – and a large portfolio of
much‑loved local brands. The company is continuously focusing on innovation to provide
consumers with healthier options.
6.7 Water
Nestlé waters business segment includes Nestlé Pure Life – the world’s biggest bottled water
brand, which provides affordable healthy hydration in many markets worldwide. International
sparkling water brands such as Pellegrino and Perrier added new natural, fruit‑flavoured
offerings and aluminum can format to cater to surging consumer demand for flavoured water.

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Company’s Revenue generated from its Products

7 Strategies of Nestle
Nestle uses two type of differentiation strategies one is business level strategy and other is corporate
level strategy.
7.1 Business level strategies of Nestle
Nestlé’s Differentiation Strategy: Nestle uses two separate types of differentiation strategies, one at the
corporate level and the other at the company level. Nestle’s corporate strategies: Nestle primarily
employs three business-level strategies: cost leadership, differentiation, and focus strategy. The
following are discussed:
1. Low-Cost Leadership Strategies
Leading producer of premium meals and drinks is Nestle. It buys raw materials of the finest
quality from a variety of market sources. Nestle was unable to maintain its low cost leadership
strategy in the industry because its cost of production is comparably higher than that of small-
scale businesses, but their business-level strategies are largely focused on achieving this goal
through cost-effective operations, quality assurance, and effective inventory management.
2. Differentiation Strategy
Nestle utilises differentiation strategy as its second business level strategy. The major goal of
this approach is to distinguish their products from those of their rivals and build a brand image
in the minds of their clients and consumers. More than 10,000 different products are produced
by Nestle under 8,500 different brand names, and the majority of these goods may be
distinguished from those of the competition based on their features, quality, ingredients,
packaging, pricing, labelling, and other characteristics. These goods uphold the high quality and
health standards to which they are produced. Additionally, the organisation promises to provide
genuine value for the consumers' money when these products are offered and promoted.
3. Focus Strategy
Focus strategy is the third corporate strategy. Nestle concentrates on differentiation and low-cost
leadership tactics in particular goods, brands, or operational areas, as we've already mentioned.
It is rumoured that it employs a targeted low-cost strategy to manage the high manufacturing and
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marketing expenses associated with its best-selling products. This tactic is employed to alleviate
the financial strain that these premium brands place on the company's overall profitability.
Additionally, rather than differentiating all of the items in the existing available brands, the
focused differentiation strategy focuses on making enhancements and changes to the quality,
ingredients, flavour, and other aspects for a specific product line.

7.2 Corporate Level Strategies of Nestle

1. Growth Strategy
Nestle is one of the leading manufacturers in foods and beverages. It has expanded its operations
in 130 countries with more than 500 production units and strategic relationships with thousands
of different suppliers around the globe, multiple of associates, partners and investors. All of these
achievements are the outcomes of its growth strategies. Nestle has made a tremendous growth
over the years in in all of its business units and segments. The current growth strategies of the
company can be divided into two types vertical and horizontal growth strategies.
2. Stability Strategies
When it comes to growing the business in unstable economic contexts or unfavourable
surroundings, poor industrial situations, or significant market saturation, Nestle not only needs
development strategies but also stability strategies. Under stability methods, Nestle waits for the
environment to improve before launching new commercial ventures. Any company expansion,
brand extension, or operational growth project is undertaken by Nestle.

3. Retrenchment Strategies
Retrenchment tactics are employed by Nestle to eliminate goods that do not significantly
contribute to its success but consume a considerable amount of its marketing budget, R&D
resources, and quality control resources. These tactics are the least popular choice for businesses.

8 Nestle international operations

➢ 6 Companies Owned (and 1 Major Licensing Deal) by Nestlé
Nestlé’s major strategic deals over the past five decades include producers of vitamins, baby
food, pet food, frozen food, and a meal delivery service—and even a giant licensing agreement with
Starbucks that dwarfs the size of many of its takeovers. More recently, the company has made no
secret of its desire to expand into healthier foods, as obesity becomes a bigger problem.

Early in 2021, it also sold for $4.3 billion its regional spring water brands, purified water business,
and beverage delivery service in the US and Canada. Additionally, Nestlé has stated an interest in
acquiring organic goods, which are becoming more and more well-liked among consumers who care
about the environment and their health.

8.1 Starbucks Corp. Licensing Deal

In Nestlé’s history, a licencing arrangement is among the most significant transactions
rather than an acquisition. It is one of the biggest—and possibly most profitable—deals in the

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history of the organisation, so we’ve included it in our tale. For the right to sell coffee branded
with the Starbucks logo in retail establishments other than Starbucks locations, Nestlé agreed
to pay Starbucks Corp. (SBUX) close to $7.2 billion in 2018.
This agreement only permits Nestlé to sell Starbucks products in physical stores; it does not
permit Nestlé to brand Starbucks products.

8.2 Gerber Products Co.

Nestlé purchased the 1927-founded Gerber Products Co. In 2007. Gerber was owned
by the pharmaceutical giant Novartis AG and had yearly revenues of around $2 billion at the
time of the acquisition. 14.4% of Nestlé’s overall revenue in 2020 came from its Nutrition and
Health Science division, which also sells Gerber. Before acquiring Gerber, Nestlé had a relatively
small footprint in the baby food industry in the United States. In order to grow the Gerber
brand, Nestlé has prioritised the creation of non-GMO (non-genetically modified organism) and
organic goods.

8.3 Purina Pet Care

The Robinson-Danforth Commission Co., which subsequently became Nestlé Purina Pet
Care, was established in 1894. With well-known brands including Friskies, Pro Plan, and Felix,
the company now known as Nestlé Purina Pet Care has significantly increased its global sales
since joining Nestlé. 16.6% of Nestlé’s overall revenue in 2020 came from the Pet Care division.
Ralston Purina complemented the business’ aggressive growth strategy while also broadening
its customer base beyond its traditional emphasis on consumer food and drink.

8.4 Atrium Innovations Inc.

Atrium Innovations is a maker of vitamins and nutritional supplements. It started as a
subsidiary of a Canadian biotech company before being spun off in 2006. It was acquired in
2014 by an investment consortium led by private equity firm Permira Funds. As consumers
grew more health-conscious, Nestlé moved toward healthier brands and purchased Atrium in
2017. The deal boosts Nestlé’s participation in the vitamin and supplement market and serves
a dual purpose: It expands Nestlé’s overall business and helps it to market itself as a healthier
company.

8.5 Stouffer’s
In 1973, Litton Industries Inc., a defence contractor that had grown to include retail
goods like microwave ovens, sold Stouffer’s to Nestlé. Consumers liked frozen dinners at the
time of the acquisition, and Stouffer’s was a well-known brand. An early partnership between
Nestlé and Stouffer’s served as a model for further forays into healthier cuisine. Stouffer’s
introduced its popular Lean Cuisine brand of low-calorie frozen entrees in 1981.

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8.6 Freshly
In 2020, Freshly was acquired by Nestlé, which kept it operating independently with full
control over its subscription price and product line. Through its acquisition, Nestlé was able to
take advantage of the recent growth of meal delivery services like Blue Apron while expanding
its exposure to the expanding demand for nutritious meals.

8.7 The Bountiful Company

In the spring of 2021, Nestlé paid $5.75 billion to acquire The Bountiful Company’s core
brands, which included Nature’s Bounty, Solgar, Osteo Bi-Flex, and Puritan’s Pride. In order to
position Nestlé Health Science as a global leader in nutritional supplements, vitamins, and
minerals, the company plans to merge these brands into it. The deal is anticipated to be
finalised in the second half of 2021.

9 Nestle modes of entry in international markets

Nestlé encountered substantial obstacles to market expansion in the 1990s. The balance of
power was shifting away from large-scale producers like Nestlé and toward supermarkets and
inexpensive chain stores, notwithstanding the stagnant population in western countries. Nestlé made
the decision as a result to shift its attention away from mature areas like North America and its
domestic market in Switzerland and toward growing markets like India and China. The fundamental
reason for the company’s desire to increase its market share in emerging markets is that as the
population rises and market economies are favoured by the government, there are more lucrative
business options available to those with middle-class incomes.

International business strategies

9.1 Ratio of increase in income

As a person earns more money and has less time to prepare meals at home, they will
automatically switch to branded items, according to Nestlé’s strategy, which links the ratio of
income growth to use of branded food products.

9.2 Enter emerging markets

Selling goods that are appropriate for the local market, such as infant formula, milk, and
noodles, has helped the company create a sizable customer base in new areas before its rivals.

9.3 Small niche

Instead of using general or one-size-fits-all approaches, Nestlé concentrates its
marketing efforts on a variety of little niche sectors. Nestlé continues to pursue its objective of
controlling niche markets by securing at least 85% of the market share for each food product it
introduces. Nestlé has, for instance, captured up to 85% of the market for instant coffee in
Mexico, 66 % of the market for powdered milk in the Philippines, and 70% of the market for

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soups in Chile by employing this method, mouth & hair. To boost its profit margin, Nestlé
launches an upscale variation of the same brand when income levels climb in each niche
market.

9.4 Customization
Nestlé’s worldwide brand identity is based on customization rather than universalism,
which implies that, from an internal perspective, it uses local ingredients and other
technologies that are in tune with the region where it is produced.
And a brand that is well-known worldwide.
Nestlé's transfer of products from local
farmers to manufacturers is greatly
hampered by the personalization of its
products. For instance, Nestlé adopted a
new strategy to deliver its products to local
warehouses that are convenient for local
farmers to use for the production of milk
because the infrastructure in Nigeria is
crumbling, the trucks are old, and the
political environment is unsuitable to carry
out the processes successfully.

Although this may appear to be an expensive option, the local farmers have increased their milk
supply and output by thrice, which Nestlé has determined to be beneficial in the long run.

9.5 Autonomy to local branches

Nestlé provides local branches located in many nations liberty to decide on price and
distribution. By expanding its product line to include tomato ketchup and wheat-based goods
like noodles and tofu, Nestlé has increased its growth. In order to serve all food items across
the region, Nestlé has expanded into 5 nations: Turkey, Egypt, Syria, Dubai, and Saudi Arabia.

9.6 Buying small companies

Nestlé is also buying local companies in China and adapting its own portfolio for the
Chinese market. Since many Chinese find coffee too bitter for their liking, Nestlé is working on
a new “formula” to offer Smoothlatte, a coffee drink that tastes like melted ice cream. The
company wants to be seen as a company that makes healthy food.

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10 Sustainability at nestle
Nestle believe in the power of food to enhance quality of life. They have sought to build their
business approach on decisions that are not just good for them and their shareholders, but for society
and the planet as well.
10.1 Promoting nutrition and health
They leverage their decades of experience and their R&D expertise to offer safe, affordable, and
sustainable, high-quality nutrition for people everywhere and across all life stages. They are committed
to developing products that are good for people and good for the planet. Their progress toward ever-
more healthy products is 124.6 billion numbers of servings of affordable nutrition with micronutrient
fortification in 2021. 5.1 % reduction in added sugars in Nestlé products since 2017.

10.2 Climate action

Nestlé is working hard to reduce its carbon footprint and achieve net zero by 2050 at the latest.
They are working together with farmers, industry partners, governments, non-governmental
organizations and their consumers to reduce environmental footprint. Their progress toward net zero
emission is 4 million tones greenhouse gas emissions CO2e reductions achieved through Nestlé projects
since 2018. By 2025, they will reduce absolute emissions by 20%, 63.7 % renewable electricity sourced
in 2021. 97.2% deforestation-free in the primary meat, palm oil, pulp and paper, soya and sugar supply
chains in 2021. By 2022, they will achieve and maintain 100% deforestation-free primary supply chains.

10.3 Waste reduction

Nestle is continually developing more sustainable packaging and committed to reducing waste
from packaging. Its vision is ambitious: a world in which none of Nestlé's packaging, including plastics,
ends up in landfill or as litter. They expect 95% of their packaging to be designed for recycling by 2025
and remain committed to achieving 100%. Their progress toward more sustainable packaging is 86.8 %
of their total packaging is recyclable or reusable. 80 % of their plastic packaging is designed for
recycling. 8.1 % reduction in virgin plastics since 2018.

10.4 Protecting nature

Almost all the raw materials they use as ingredients rely in some way on nature, so playing their
part in taking care of the environment is not only critically important for the planet, but a business
imperative too. That is why their aim to source half of their ingredients through regenerative agricultural
methods by 2030. Through their regenerative agriculture initiative and Forest Positive strategy, their
aim is not only to help reduce Nestlé’s impact on the environment but to boost nature and biodiversity
in supply chains and operations and help move them toward net zero. They are working to help
regenerate farmland and forests.100 % deforestation-free by 2022 for palm oil, sugar, and soya, meat,
pulp and paper primary supply chains and by 2025 for coffee and cocoa. 200 million trees Nestlé will
grow by 2030.

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10.5 Water stewardship

Their aim is to take a holistic approach to water stewardship that considers their operations,
bottled-water business, agricultural supply chains and the communities affected throughout. They
monitor water efficiency and the quality of the water they discharge. They will advance the regeneration
of water cycles to help create a positive water impact everywhere on their water business operates.
Nestle promotes and work with suppliers and farmers to implement better water management practices
in water-stressed areas. This aims to protect watersheds and helps to go beyond the conservation of
water sources to help regenerate and restore water cycles in the areas where they operate. They work
together with local and global stakeholders to address shared watershed challenges. Their progress in
water stewardship is 2.3 million m3 water use reduction in factories. 98 million m3 total water
withdrawals from all areas in 2021. 39.03 million m3 total water consumption in 2021.

10.6 Human rights

Human rights are inextricably linked to their shared future. By respecting and advancing them in our
value chain, they are building a foundation that contributes to a resilient future for planet and people.
Their silent issues are the areas they have identified as those human rights at risk of the most severe
negative impact on people through their activities or business relationships.

• Child labor and access to education

• Forced labor and responsible recruitment
• Living income and living wage
• Gender equity, non-discrimination and non-harassment
• Safety and health at work
• Freedom of association and collective bargaining
• Right to water and sanitation
• Indigenous Peoples and Local Communities' land rights
• Data protection and privacy
• Right to food and access to nutritious, affordable and adequate diets

10.7 Caring about our people & communities

As a food company with a global presence, they employ hundreds of thousands of people around
the world. Collectively, they work towards a clear, common goal: To be a force for good. Their health
and well-being are their priority and they bring their purpose and values to life through a diverse and
inclusive workforce that leaves no one behind. As well as they direct employees, they are equally
committed to the continued health, well-being and economic progression of the communities in supply
chain that provide them raw materials.

11 Nestle political risk

Nestlé has operations in more than 190 countries, so any change in the regulatory landscape can
cause a significant effect. Governmental rules and changes have increased the possibility of production
bottlenecks for multinational companies like Nestlé. Basically, the likelihood of regulatory changes that
could disrupt operations increases the more nations a corporation operates in.
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For instance, Nestlé’s plans were derailed by the Brexit issue (the United Kingdom’s decision to
leave the European Union). Workers in agriculture and food production were at risk from the change.
Europe is a significant market for Nestlé’s goods and earnings. Additionally, the entire UK food supply
chain has been hampered by the unpredictability of Brexit. Because of how disastrous the Brexit
upheaval has been, Nestlé has considered moving production from Newcastle and York to Poland. The
corporation lacks confidence in the nation’s future because Brexit is still up in the air. Therefore, it
makes more sense to relocate operations outside of this unstable environment.
Although political changes often affect the company, moving operations out of the country affects
the unstable environment for Britain. Losing Nestlé means a loss of over 300 jobs, impacting the already
controversial political British climate. Keep in mind, not many companies can impact political stability,
but Nestlé can.
Nestlé is also required to follow evolving food standards and laws. Every nation has its own unique
set of laws. Nestlé will be cut off if they don’t follow them; the items won’t be considered consumable
or buyable in the eyes of the government.

12 International logistics of Nestle

Every day, Nestle ships more than 140,000 tons of goods from more than 1600 facilities around the
world to consumer markets (Nestle Company, 2016). The majority of the company’s product
transportation and distribution is handled through a collaboration with outside logistic service providers
that make about 270 trips around the world every day (Nestle Company, 2016). The majority of product
transportation occurs between factories, distribution centers, and end customers.
The selection of the carrier used in the transportation of Nestle products is based on three main factors
namely:
• Reduction of greenhouse emissions
• Cost reduction
• Increasing efficiency
The company is focused on establishing the most sustainable modes of transport that reduce gas
emissions. Nestle is shifting from long distance transportation via roads into using sea and rails where
possible. This helps in cause cutting avoiding traffic reducing greenhouse gas and increasing efficiency.

12.1 Reducing GHG emissions through rails

• Through Marco Polo project, Nestle is shifting over 360,000 tons of water, cereal products from
roads to rail transportation. The model shift withdraw approximately 5000 trucks per annum by
taking advantage of the rail systems between France, Italy, US and Germany.
• Project Green Alpes was made for the distribution of Nestle raw materials and products between
France and Italy via train. The project reduced GHG emissions by 2.3 million per year.
• In Japan, Nestle has partnered with the logistics and shipper services providers to facilitate the
shifting into rail transport. This model was implemented on a full scale in 2011.

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 IBM REPORT ON NESTLE
12.2 Distribution Channel

Distribution Channel of Nestle

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