From premiumization to e-commerce

Bernard Meunier, Nestlé's Head of Strategic Business Units, explores the global trends fuelling a regenerative approach
drinking coffee
Nestlé's Head of Strategic Business Units, Marketing and Sales, looks at three key global market trends and how they can fuel a regenerative approach.

I've always been passionate about agriculture – my father manufactured and sold farm equipment. I spent my youth in the fields with him, demonstrating machinery to farmers. As a kid, I wanted to grow up to be a farmer.

As a kid, the demanding nature of farm work made a lasting impression on me.
Bernard

That passion stayed with me working in the food business – bringing a viewpoint that goes all the way back to the farm and to agriculture, while also embracing perspectives from billions of consumers across countries and cultures.

plantlet

As a kid, the demanding nature of farm work made a lasting impression on me. The pressure to produce intensively – sometimes focusing on single crops and depleting soils – has hurt ecosystems and farmers themselves. That's one reason behind the agricultural CO2 emissions that have contributed significantly to the climate crisis. It is with this key challenge in mind that we're undertaking an effort at Nestlé to advance regenerative food systems that provide needed food for billions while helping to protect, renew, and restore our planet and communities. Thankfully, this ambition is deeply compatible with the consumer trends that will define the future of our industry.

Our approach to advancing regeneration is embedded into three of 2021's most business-critical trends for food and consumer companies:

Affordability: Grounded in economic realities

The health and economic impacts of the past 18 months have changed the way many households manage their budget. Making quality food accessible and affordable is a core part of our mission at Nestlé, and, now more than ever, it's something that the market demands.

I've seen time and again the misconception that affordability is at odds with regeneration – quite the opposite. Regeneration can't be only for niche product, reserved for a privileged few. These practices must truly function at-scale to be part of the solution to the climate crisis. Fortunately, we couldn’t be better positioned to do so.

couple drinking a cup of coffee

Nestlé is the largest coffee company in the world.

Every second more than 5,500 cups of Nescafé are enjoyed globally

Just consider: every second more than 5,500 cups of Nescafé are enjoyed globally. And even with that incredible scale and ensuring accessibility, Nescafé supports farmers on the journey to regeneration. Every year, Nescafé supports around 100,000 coffee farmers on critical sustainability practices like improving crop quality, diversifying crops for better soil care, and reducing their environmental footprint through efficient irrigation methods. And our view of regeneration doesn't stop with the soil. The Nescafé Plan also provides trainings to empower women and young farmers in economic planning, record keeping, and entrepreneurship.

 

Premiumization: The drive for luxury can support supply chain equity

While at first glance, increasing premiumization may seem in opposition to the need for affordability, the past year has shown us they go hand-in-hand. Many of us have gotten creative in how to make our time at home feel special and joyful – that can mean cooking with premium culinary ingredients, an indulgent dessert, or a special product that warms your heart.

Incoa

Our Incoa chocolate bar has regularly been given as a gift among our Nestlé teams, since each bar comes with a deeper planet and community story: Incoa uses forgotten parts of the cocoa plant rather than adding sugar, while supporting the communities of Nestlé Cocoa Plan farms. As consumers invest in premium, single-origin, and traceable products, farmers can see more premium payments and incentives for the investments that they make in ingredient quality and regenerative practices. Along with training and investment support, some premium trends can support increased profitability and improved livelihoods for farmers around the world.

Digitization: Modern delivery means incredible precision

Finally, a market trend that's been growing for a decade but has reached hyperdrive in the last 18 months: the flood of information, purchase decisions, and actions happening in the digital environment. Digital goes beyond e-retail. At-scale, this fundamental change touches every aspect of our lives right now.

The clarity and visibility of digital systems can help make us leaner and more efficient with less stock, less waste, and better use of resources.

In the agricultural industry, digital tools are contributing to bringing smallholder farmers industry information, weather pattern planning and insurance, and market prices for their products.

sustainable home delivery

The clarity and visibility of digital systems can help make us leaner and more efficient with less stock, less waste, and better use of resources in our journey to reduce environmental harm while developing regenerative practices. In Chile, Nestlé Purina launched a pilot for a bulk delivery system of our Purina Dog Chow products in partnership with Algramo, a social company that uses an electric bike to deliver the petfood to the consumer's front door, dispensed into a reusable and refillable container. Imagine the impact this could have if scaled to more products and countries.

Zoegas coffee

Even in the case of longer product journeys like our Zoégas coffee in Sweden, digitization is changing the role of regenerative practices. With IBM blockchain technology, consumers can scan the QR code on the packaging to follow the coffee journey from a farm in Brazil, Rwanda, or Colombia to Helsingborg where the beans are roasted. The data includes information about farmers and time of harvest, as well as the roasting period. While these may be small scale examples today, they allow us to see where digital tools bring consumer experience together with regeneration.

While companies like ours are deeply immersed in food and business trends, it's critical that we also embrace these commercial changes as an opportunity for transformation. Nestlé has an essential role to play in meaningfully contributing to climate solutions, while also helping to feed billions of people. As a food company present in 186 countries around the world, our view of climate action is clear – it is both our responsibility and a business imperative. In meeting the needs of our consumers, we can also contribute to a better and more regenerative food system – not only for our end-buyer, but throughout our supply chains. The next generation of food systems depends on it.