NESTLÉ SOUTH AFRICA: Utilising the Power of RE

RE – to return to a previous state. The long-held vision of society to reverse the impact of the climate crisis and global heating is characterised by these two letters. Reticent has been the approach of many companies. Rejection of that restraint has been the reply from conscious consumers. Now, they say, is the time to make a difference. In Africa – where agriculture, forestry, the oceans economy, and more are crucial sectors exposed to the impact of a changing climate – recognition of the problem is required. Big businesses, often criticised for bureaucracy and lengthy decision-making processes, have been in the spotlight for their response.  

Nestlé, the food and drink multinational headquartered in Switzerland, is delivering innovation and revolution, especially where overhaul of thought leadership is needed regarding sustainability. Saint-Francis Tohlang is Corporate Communications and Public Affairs Director for Nestlé’s ESAR (East and Southern Africa Region) market. He tells Enterprise Africa that the company is resolute in its focus on sustainability, and understands the responsibility on big business to lead.  

Revamping business ideals and creating shared values across the entire stakeholder network has helped to map the way forward. This approach is now being seared into the organisation’s culture, especially across ESAR which includes 23 country markets split into six clusters.  

A cornerstone in this new operational approach is utilising the power of RE – Rethink, Reuse, Repurpose. And the positivity realised across all elements of the business is real.  

RE NOW   

“In 2020, we launched the ‘RE’ Sustainability initiative and it’s all-encompassing in so many different ways,” begins Tohlang. “We have three pillars: Rethink, Reuse, and Repurpose. Thematically, it underpins our entire approach towards sustainability. It serves as a framework in terms of communication. We were pretty clear that we needed to create an accessible language when speaking on sustainability that is consumer friendly, simple, and understandable. But, more importantly, beyond creating that framework, what RE allows is for us to be focused and consolidate the many things we are doing on sustainability under one umbrella.”  

In April 2021, Nestlé became the first food company to join Polyolefin Responsibility Organisation (Polyco) in South Africa – a non-profit focused on making waste a valuable resource that works for the economy. These relationships will become vital as South Africa moves towards implementation of legislation in November which will force manufacturers to responsibly manage product packaging at end of the cycle, feeding materials including polyolefin plastic packaging back into the system.   

Mandy Naudé, CEO of Polyco was thrilled with Nestlé’s involvement. “We are excited to further our impact in growing the collection and recycling of polyolefin plastic packaging in South Africa, and to work closely with our members to support ending plastic waste in the environment.” 

The Rethink pillar holds all in place through a cultural, organisational reset. A total reimagination of business ethos and processes sets out a new, focussed direction that achieves new goals. “We must be sustainable by design,” stresses Tohlang.  

“It’s end-to-end, looking at business models and embedding sustainability at the very core of the concept. Not just a product, business process or approach. It’s about looking at fundamentally, how is this sustainable by design. We are rethinking our relationship with the environment, we are rethinking our business, we are rethinking the role that a private organisation plays in combating some of the environmental issues we face.”  

According to UN studies from the Intergovernmental Panel on Climate Change (IPCC), ramifications of the world’s warming by more than 1.5° C would be profound in sub-Saharan Africa. Heat waves, droughts, crop failures and resultant economic damage are likely in African regions within 15 degrees of the equator. If drastic action is not taken, rainfall in southern Africa could decrease by 20%, with consecutive rain free days set to increase. It’s a problem for all.  

Tohlang explains that the Reduce pillar of the company’s strategy surrounds a major lessening of the Nestlé impact on the environment.  

“It’s about efficiencies in our factories. Nestlé is going for zero environmental impact by 2030 and so that has to come bottom up from all of the different regions and markets where they all make a contribution so that collectively Nestlé globally can fully realise the vision.” 

Globally, the company which has 291,000 employees across 187 countries, has pledged net zero greenhouse gas emissions by 2050. Nestlé cites the climate crisis as one of the greatest risks to the future of its business and is therefore setting out a plan incorporating great urgency. By 2030, it will have halved its emissions, and by 2050 achieved total offset. Changes in production and the supply chain, alongside advanced agricultural techniques will be small elements of a big plan.    

“That means zero waste to landfill which we have already achieved in East and Southern Africa,” details Tohlang. “It’s about looking at opportunities to reduce water inefficiencies. In our Mossel Bay factory we have Zerau Water Technologies which is a flagship in the Nestlé world. We source milk from a farm and 80% of that milk is water. Through an evaporation process, we can extract the water from the milk and dry the milk solids as powder. We then reuse the water in our factory operations which has led us to 161 million litres of water savings per annum. We also draw less water from the municipality and the factory is situated in a water scarce part of the country.”  

In George, Nestlé is busy developing the Skimmelkrans project, a dairy farm with net zero carbon emissions. “We are confident it is the first in Africa,” says Tohlang. “By 2023 the initiative will be complete. We are focussing on a number of different interventions and it involves using the same factory where the Zerau technology is installed. It does give us a very interesting circular loop which is great.”  

Net zero is achieved through a multifaceted approach which removes the same amount of emissions from the atmosphere. Innovative soil work, water conservation, feed management and manure processing are some of the biggest reductions of greenhouse gases. Methane, one of the most harmful greenhouse gases that comes from the cattle and dairy farming industry, is reduced at Skimmelkrans by collecting manure during grazing and pressing, separating the solids and liquids, removing moisture. The solids are used in compost and the liquids for irrigation.  

This all feeds into the Repurpose pillar of the RE Sustainability initiative. “It’s about how we create more circular models and loops within our business. How do we ensure the true meaning of circularity – ensuring waste from one product is an input into another? That is a different process altogether,” says Tohlang.  

He highlights Project Indigo as another example where waste coffee grains from the company’s large coffee production process are used as a growth vehicle for a community mushroom farming project. Previously, spent coffee grounds would have been sent off to farmers as feedstock. “It’s now no longer waste but it is a benefit to the community.”  

FORTIFICATION  

In the ESAR market, Nestlé has identified the need for a range of affordable nutrition – products that provide genuine nutritional benefit with added vitamins and minerals, catered to regional requirements. Tohlang says that the most important factor behind this idea is providing good nutrition whilst ensuring flavour and taste is not lost and products continue to remain appealing to consumers.  

“We are, particularly in East and Southern Africa, focussing specifically on affordable and accessible nutrition. That is about developing products that are affordable, but are also fortified with the likes of iron, vitamin A and zinc as an example – to counter deficiencies that are so rife in Africa. Affordable accessible nutrition is not a product but a strategy.  Affordable nutrition is about nutrients in the broadest form not just fortification, but balancing energy, protein and fat to ensure we address not only the micronutrient needs of our communities but also the risks for chronic lifestyle conditions such as obesity. 

“You have to balance preferred taste with key nutritional concepts such as fat and added sugar. It remains a fine balance to address consumers’ taste preferences with optimal nutrition. We’ve made great progress focussing on removing trans-fatty acids, and reducing sodium, and added sugar in our products.”   The recipe for popular chocolate-malt drink MILO has been renovated and improvements have been made to the malts; added sugar has been reduced and iron fortification improved. We have also included zinc and vitamin A fortification whilst adding a cocktail of B-vitamins to improve the energy uptake for consumers at a cellular level.  

MAGGI Noodles, a key brand in the Nestlé portfolio, now has more fibre and less sodium in the sachets, but they have not compromised on taste. In fact, compared to 2005, a year’s production of MAGGI products already contains more than 12,000 tonnes less salt. have been ramped up – “it’s all part of our strategy to ensure good food for a good life.” says Tohlang.  

“We have an amazing network of very sophisticated R&D centres right across the world and they drive innovations from the product perspective. Apart from launching new products we are also driving renovation of existing products to remove trans-fatty acids and further reduce sodium and added sugars,” explains Tohlang.  

GROWTH INTO THE FUTURE 

In February, Nestlé announced its full-year results for 2020 from its HQ in Vevey, Switzerland. In a challenging year for all businesses, the company reported that organic growth reached 3.6% with real internal growth (RIG) of 3.2%. The outlook for 2021 was positive with a predicted ‘continued increases in organic sales growth towards a mid single-digit rate. Underlying trading operating profit margin with continued moderate improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase’. 

“In this unprecedented environment, we achieved our third consecutive year of improvement in organic growth, profitability and return on invested capital,” said Nestlé CEO Mark Schneider.  

“We remained focused on sustainability and set out our path to achieve net zero greenhouse gas emissions by 2050. This journey is expected to support future growth and be earnings neutral – it will generate value for society and our shareholders,” he added.  

For Saint-Francis Tohlang, growth in ESAR will be achieved through a relentless and ongoing focus on the pre-planned strategy including sustainability, technology, innovation, and consumer experiences, proving that success can be attained when concentrating on both business performance and environmental KPIs.  

“Sustainable growth is a key focus area for us. We want to accelerate and then sustain growth and that is the primary focus for the business in South Africa where Nestlé has been for 106 years,” he says.  

“We want to be a leader in terms of the circular economy principles in practice in a business. It’s one thing to talk about this but it’s a whole other thing to really demonstrate it and lead from a business perspective, demonstrating that it can be done to the benefit of all the different stakeholders. 

“We also want to look at the role Nestlé can play in terms of mitigating the far-reaching consequences of lacking food security. That is something in its infancy for Nestlé in our region but certainly something we want to concern ourselves with as a business.”  

Obviously, the business is bolstering its digital drive to ensure that it reaches as many consumers as possible. But, as well as achieving volume through scale, Tohlang is very focused on building interaction and creating true brand loyalty locally.  

“We are driving digitalisation within and making sure the business is future-fit. We want to focus on innovation but beyond the core. The core of our business is our products, but how do we move beyond just the product and provide amazing consumer experiences. We definitely want to continue on our diversity and inclusion journey. We are a Level 3 BBBEE company and that was a deliberate effort and a great achievement for a multinational. We absolutely want to continue on the transformational agenda.”  

This growth and development is reinforcement that the company’s ‘Good food, Good life’ mantra is being achieved. While needing constant attention and updating, a strategy is in place which is providing success.   

Going forward, after what has been a difficult period for the region, Nestlé has more innovation to add to its portfolio on the way. The burgeoning meat-free market has already demonstrated clear avenues for growth. In June, the company announced its intentions by launching the Harvest Gourmet range for restaurant customers. The burgers, schnitzels and chargrilled pieces are designed to bring the flavour and texture of meat, but made up entirely of plant-based ingredients that deliver protein and other nutritional benefits.  

“We really do have some exciting projects around sustainability and the circular economy,” reiterates Tohlang. “There are exciting innovations being worked on in the product range, and plant-based is indeed a key trend that Nestlé is looking to advance globally.”  

Even through the Covid-19 pandemic, this customer-conscious and inventive nature has been fostered internally and through the value chain.  

“We needed to recognise and bring to the fore our shared value philosophy of in some way making a difference whether it was through Covid relief measures, donations, product in kind, or anything else. Our East and Southern Africa CEO, Bruno Olierhoek, had a very interesting philosophy that we are only as strong as our weakest link, so across the entire value chain we needed to make sure we partner with suppliers as we have resources that they might not have access to. If a key supplier is struggling, that will definitely impact our business, so we have to make sure the weakest link is supported. It has created an interesting dynamic in our communities. Partnership with customers, suppliers, government has become vital through the pandemic,” says Tohlang.   

Business continuity at all levels has been important for driving revenue within the business. Without this, Nestlé could not push such an effective sustainability campaign – one which is more than just words and one which has already seen action on the ground resulting in benefits for all stakeholders.  

Importantly, the future success of the RE concept in the East and Southern Africa Region is the ability and willingness of big players to work collaboratively. Without this, the regenerative capacity needed to ensure long-term sustainability in the food production industry will not be realised. By placing RE at the forefront of thinking; and driving it through all tiers of business, across all regions, Nestlé is now on a journey towards deeper long-term health, fortified by shared values and powered by a circular loop mentality.  

“As the world’s largest food and beverage company, we remain cognisant that a sustainable circular economy cannot be realised without transformative actions,” Tohlang rounds off.  

“World-wide demand for food is growing and while eating habits and behaviours are changing, there is demand on food manufacturers to ensure that their production does not impact the planet. At the same time, agricultural supply chains face many challenges, from an aging farming population to the effects of climate change. At Nestlé, we want to help build a sustainable, long-term supply of ingredients by focusing on regenerative practices,” concludes,” he concludes.