Working with thousands of farmers across the globe, Nestle’s success has been built on the back of its farmers. In this View from the Top, Hannah Binns speaks to UK and Ireland responsible sourcing manager Robin Sundaram about how the firm is keeping its producers at its core.
Keeping farmers at the heart of Nestle’s business and incorporating regenerative agriculture is key for Robin Sundaram, the man in charge of responsible sourcing for the firm.
Mr Sundaram said he had discovered the importance of working from the farmer up, right from the start when he took on the role in 2013.
He said: “I attended a talk about the future of farming at the House of Lords with three farmers but they were the only farmers in the room of 150 people.
“It was a lightbulb moment and I realised we would never make any changes if farmers are kept on the periphery.”
Purchasing 1 per cent of the world’s agricultural output and working with more than 200,000 dairy farmers, as well as cocoa and coffee producers, the global giant has committed to becoming net zero by 2050, with its current greenhouse gas footprint twice the size of Switzerland.
A roadmap, with a heavy focus on sustainable sourcing and regenerative agriculture, as well as logistics and transportation and reusable and recyclable packaging, is hoped to help the business achieve its ambition.
Nestle UK and Ireland has enjoyed a ‘tactical’ relationship with First Milk for more than 15 years, using milk from Cumbrian and Scottish cows to produce confectionary and coffee products.
But this underwent a revamp in 2016, the same time as the milk market crashed.
“As we are reliant on milk as a main ingredient, I questioned why we had monthly price negotiations and thought it would be more strategic to fix the price for six months, affording more certainty to farmers as well as helping us price forecast,” Mr Sundaram said.
This meant the milk price remained at 27ppl for an entire year when most farmers were receiving about 18-20ppl.
Nestle also simplified its approach to rewarding farmers’ environmental and social interventions, establishing a points-based system.
“Our milk plan includes a base price, calculated from an average price of three processors with a premium, with an additional sustainability bonus,” he said.
The milk price is now fixed for three months rather than six to allow farmers to benefit from price rises more quickly.
Mr Sundaram added Nestle UK and Ireland was also looking to establish a regenerative approach to its wheat supplies.
“Various industries have different demands on natural assets so we are looking to find ways which would enable farmers, non-governmental organisations (NGOs) and private individuals and academics to work together and achieve these environmental goals," he said.
“We will make sure everything is science-based but it all starts with farmers, who will deliver this work alongside their agricultural practises, so if we do not get their buy-in, then it will not work.”
This week, First Milk, Nestle and Agricarbon announced the launch of a pioneering soil carbon capture project which will carry out intensive soil carbon analysis to quantify the soil carbon sequestration on its journey to net zero.
Selling one billion products globally every day, the Covid-19 pandemic has impacted Nestle’s operations as it had to streamline and adjust factory lines and purchase personal protection equipment, while staff absences rose due to illness.
Consumers have been drinking more coffee, eating breakfast at home and there was an increased demand for pet food as pet ownership grew.
“We also switched types of product to meet demand, for instance swapping production of four-fingered Kit-Kats, usually an impulse buy at petrol stations and corner shops, to two-fingered Kit-Kats sold in packets of seven in supermarkets," he said.
Global sales for Nestle amount to 85 billion Swiss Frank, with a £3bn ambition in the UK and Ireland.
“While we may not be the biggest market in terms of sales, we are at the forefront in terms of value to society factors,” Mr Sundaram added.
“When it comes to sustainability, a lot of NGOs are based in the UK, as well as a very advanced retail industry with high expectations,” he said, adding ‘social sustainability’ was also important to them.
Nestle had established a Wild Hearts initiative for schools to help coach employability skills, as well as a women in agriculture programme and next generation farmer programme.
Robin Sundaram’s experience at Nestle spans 25 years, gaining insight into the farm to fork process through various supply chain roles within the business.
Prior to Nestle, Robin came from a strong retail background, working first for Marks & Spencer and then Safeway.