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Implementing our growth strategy
Our purpose is unlocking the power of food to enhance quality of life for everyone, today and for generations to come. To achieve this, we pursue growth through rapid innovation, operational efficiency, and disciplined resource and capital allocation.
Our portfolio is diversified, both in terms of geography and category. We have products for people at all life stages that can be consumed as part of a balanced diet. We want to contribute to people's health through nutrition and aim to help people of all ages live better. Our innovation capabilities ensure we deliver products that meet consumer needs and preferences, and are good for the planet. Through digital technologies, we are able to be more agile and make better and faster decisions.
Driving organic sales growth
Organic sales growth is key to our growth ambition. Our portfolio is geared to deliver sustained mid single-digit organic sales growth based on investment in attractive categories and regions, impactful innovation and execution discipline. Our knowledge of local consumers coupled with our scientific and technological expertise help us deliver innovations that support business growth, while meeting consumer needs. We also see many opportunities for growth through cross-fertilization between categories and geographies.
In addition to core innovation activities focused on food safety, taste, nutrition and sustainability, we have intensified research in high-growth categories, such as early-life and therapeutic nutrition, alternative proteins, and coffee and systems technology. Ecosystem building and business model innovation are also increasingly a focus of our categories.
Alongside innovation, we continue to optimize our portfolio to focus on stronger brands and products.
Innovating across life stages and health needs
The foods and beverages people consume play a pivotal role in their overall health. From pre-conception to early life, through to childhood, adulthood and old age, we aim to meet people's nutritional and health needs throughout their lives.
Nestlé has deep roots in infant nutrition. For years, we have researched the composition of nutrients and bioactives present in breastmilk as well as the role of probiotics in nutrition and health. Exploring the interaction between these different components, Nestlé experts discovered a proprietary probiotic strain, B. infantis, that unlocks beneficial aspects of six human milk oligosaccharides (HMOs). This led to the launch in 2023 of our proprietary blend, Sinergity, for use in infant formulas to support immunity and gut health.
As we continue our tradition of supporting children's health, we also need to consider an aging population that is living longer. Under our R+D Accelerator initiative, we developed the Nestlé Goodnes range of products in 2023 to support healthy aging. It helps optimize people's energy levels, restore their sleep quality and improve their focus through patented nutritional blends. The products were piloted in France, Singapore and the UK. Additionally, we launched the Nestlé N3 range in China that helps people maintain their overall health and well-being as they age.
Expanding alternative proteins
In 2023, we added to our plant-based portfolio by launching a range of vegan alternatives to fish filets, nuggets and fingers that stand out for their strong nutrition credentials, as well as their great taste and texture that is close to white fish. Garden Gourmet launched Marine-Style Crispy Filet and Marine-Style Crispy Nuggets in Europe, and Harvest Gourmet launched Crispy Fish-Free Fingers in Asia.
We also continued to explore new concepts for dairy alternatives. Made with a blend of oat and fava, the new natural bliss beverages are a good source of high-quality protein. Our teams chose fava beans because of their many health benefits and good taste.
In addition, we combined the goodness of milk with plant-based ingredients in our new Nido Milk & Soya instant powder launched in Central and West Africa and in our Bear Brand Doble Protein powdered beverage piloted in the Philippines. Both products are highly nutritious and affordable.
Nestlé is exploring emerging technologies like animal-free dairy beverages made with precision fermentation, which led to a pilot for Cowabunga in the United States.
Making innovation faster and more efficient
We are using AI and data science to complement our R&D capabilities and manage complexities during innovation. Our new recipe optimization tool uses advanced algorithms to help product developers better manage tradeoffs between ingredients, nutrition, cost and sustainability, while still meeting consumer expectations.
In the development of the new Nescafé Dolce Gusto Neo coffee system, our experts optimized the manufacturing process through virtual simulations before applying technical settings on the physical machine. This helped them make quick and efficient decisions to manage the complex interaction between coffee, paper packaging material and the machine to ensure the perfect coffee cup for consumers.
Grown by only 59 Colombian farmers and developed to create a unique tasting experience, the new Nespresso N°20 encapsulates over 20 years of expertise.
Improving efficiency with digital technologies
Digitalization is enabling better and faster decision-making, in addition to improving cost efficiencies. We are harmonizing our data framework to be able to take advantage of different technologies, like AI.
The Nestlé Supplier Portal, a global digital collaboration platform, supports quality document management, sustainability data collection and supplier performance management. With over 7000 active suppliers in over 40 markets, it covers almost three-quarters of our direct material spend.
Leveraging always-on analytics
We are responding to fast-changing consumer needs in real time, using data to streamline our business processes. Our strategic procurement decisions are more informed, as we increasingly leverage advanced statistical modeling with machine learning and automated price-trend analytics. And by deploying new marketing analytics capabilities at scale, we are building data foundation pipelines that automatically refresh our marketing effectiveness models for faster and smarter investment decisions.
In 2023, we spent 68% of our media budget digitally and acquired 308 million first-party data records. We are on track to meet our 2025 goals of 70% and 400 million respectively. Using AI, this data helps our brands reach target audiences more efficiently and deliver more relevant, personalized messages online.
Accelerating e-commerce
Our ambition for 2025 is that a quarter of our sales come from e-commerce. This will have a significant impact on all markets, brands and roles. To support this, we launched an e-commerce academy that offers personalized learning paths. Over 1500 employees were trained and certified in 2023.
We have also launched our own eB2B platforms in key markets such as Brazil, India, Mexico and Vietnam, and have partnered with other leading platforms, such as the eB2B platform BEES.
Delivering novel technologies
Thanks to our strong global capabilities, we continue to develop exciting innovations that can be applied across different products, brands and categories.
One of our latest unique science-based innovations is Nestlé N3 milk, which offers new nutritional benefits. Made from cow's milk, it has all the essential nutrients found in milk, including proteins, vitamins and minerals. In addition, it also contains beneficial prebiotic fibers and has a low lactose content and over 15% fewer calories.
Using a proprietary technology, we use specialized enzymes to break down lactose, a sugar found in cow's milk, while generating prebiotic fibers. Clinical studies showed that the fibers promote the growth of multiple types of bifidobacteria, delivering gut microbiome benefits in healthy adults.
up to 3x
beneficial bifidobacteria growth
N3 milk was first introduced in 2023, in a range of powdered dairy products in China, tailored to meet the dietary needs of local consumers. The N3 range includes a full cream and a skimmed milk product, both high in protein and perfect for the whole family. To support specific needs for healthy aging, the range includes two products with vitamins, minerals and probiotics to support bone health, muscle growth and strength, and immunity.
N3 milk will be introduced in other product categories later, enabling us to support health and well-being across life stages.
The N3 milk products are the result of development work done by experts at R&D Nutrition, R&D Singapore, R&D Beijing and Nestlé Research.