Dairy supply chain
Dairy ingredients are widely used across our portfolio and are our largest source of GHG emissions. These include dairy and infant nutrition products, as well as ice cream, beverages and confectionery.
The key challenges that arise in our dairy supply chains relate to greenhouse gas (GHG) emissions - including methane - and animal welfare. We are committed to addressing these in collaboration with farmers and suppliers.
Our approach to sourcing dairy
We source dairy in two ways.
- Dairy ingredients such as milk powders, whey or lactose are bought from dairy cooperatives or suppliers
- Fresh milk is sourced directly from farmers before being processed in Nestlé factories. We work with over 130 000 dairy farmers directly in 25 countries
Our overall dairy strategy is driven by our Dairy Plan and our Responsible Sourcing Core Requirements. These initiatives play an essential role in how we source and produce nutritious dairy ingredients as part of our road to net zero.
Our Dairy Plan, an integral part to our Net Zero Roadmap, is a holistic farmer-centric approach designed to reduce the environmental impact of dairy ingredients by lowering GHG emissions and advancing regenerative agriculture, supporting key ecosystems across the dairy value chain.
Key terms explained
Net zero
Nestlé has committed to reaching net zero greenhouse gas (GHG) emissions by 2050 at the latest. In 2020, we published our timebound plan, the Nestlé Net Zero Roadmap (pdf, 16Mb), which underpins our Group’s climate strategy and acts as our transition plan aligned with a 1.5°C pathway as validated by the Science-Based Targets initiative (SBTi). We will balance any remaining emissions through high-quality natural climate solutions. Read more about net zero.
Responsible sourcing
For Nestlé, responsible sourcing means improving the traceability of our ingredients and monitoring how they are produced. This involves applying our environmental and human rights requirements - detailed in our Responsible Sourcing Core Requirements (pdf, 2Mb) - at the different stages of our supply chain. Examples of these requirements include that land and resources of Indigenous peoples and local communities are respected and that no deforestation and no conversion of forests and other ecosystems occur in our supply chain. Read more about responsible sourcing.
Net zero
Nestlé has committed to reaching net zero greenhouse gas (GHG) emissions by 2050 at the latest. In 2020, we published our timebound plan, the Nestlé Net Zero Roadmap (pdf, 16Mb), which underpins our Group’s climate strategy and acts as our transition plan aligned with a 1.5°C pathway as validated by the Science-Based Targets initiative (SBTi). We will balance any remaining emissions through high-quality natural climate solutions. Read more about net zero.
Responsible sourcing
For Nestlé, responsible sourcing means improving the traceability of our ingredients and monitoring how they are produced. This involves applying our environmental and human rights requirements - detailed in our Responsible Sourcing Core Requirements (pdf, 2Mb) - at the different stages of our supply chain. Examples of these requirements include that land and resources of Indigenous peoples and local communities are respected and that no deforestation and no conversion of forests and other ecosystems occur in our supply chain. Read more about responsible sourcing.
Our approach encompasses:
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Quality Delivering milk traceability and ensuring food safety, through the use of digital tools and third-party audits.
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Climate Aligned to our Net Zero roadmap, we work to accelerate the reduction of greenhouse gas emissions at scale in dairy farming by addressing the main sources of emissions and to accelerate solutions towards low carbon feed, manure management and circular economy models.
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Farmer livelihoods Working with our dairy farmers to help them continuously improve farm efficiencies through upskilling. For this we train farmers both technically and in financial literacy. As an outcome we see optimized productivity and improved incomes.
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Nature We support the transition to regenerative agriculture systems with multiple aims: improving soil health, and increasing biodiversity, building supply chain resilience and supporting farmer income.
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Animal welfare Our Responsible Sourcing Core Requirements lays out our sourcing requirements for our suppliers.
Key terms explained
Regenerative agriculture
In line with the Sustainable Agriculture Initiative Platform, Nestlé defines regenerative agriculture as an approach to farming which aims to conserve and restore natural resources, primarily soil, as well as water and biodiversity, while capturing carbon in soils and plant biomass, and to support farmers’ livelihoods. Examples of regenerative agriculture practices include reduced tillage and agroforestry. More information is available in our Nestlé Agriculture Framework (pdf, 19Mb). Read more about regenerative agriculture.
Regenerative agriculture
In line with the Sustainable Agriculture Initiative Platform, Nestlé defines regenerative agriculture as an approach to farming which aims to conserve and restore natural resources, primarily soil, as well as water and biodiversity, while capturing carbon in soils and plant biomass, and to support farmers’ livelihoods. Examples of regenerative agriculture practices include reduced tillage and agroforestry. More information is available in our Nestlé Agriculture Framework (pdf, 19Mb). Read more about regenerative agriculture.
Deforestation-free
Deforestation-free means that commodities in scope were assessed as produced on land that has not been subject to deforestation or conversion after a specific cut-off date that varies by commodity, but no later than December 31, 2020. Read more about deforestation-free.
Deforestation-free means that commodities in scope were assessed as produced on land that has not been subject to deforestation or conversion after a specific cut-off date that varies by commodity, but no later than December 31, 2020. Read more about deforestation-free.
Our Dairy Plan’s strategic initiatives
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Farmer Engagement Reward farmers to implement regenerative agriculture practices and reduce greenhouse gases.
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Low Carbon Feed Acceleration Partner with feed producers and dairy farmers to reduce a major source of on-farm emissions, with lower carbon feed and feed supplements.WATCH THE VIDEO
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Manure Management Help create circular economy models that convert agri-waste into profitable, low-emission byproducts.WATCH THE VIDEO
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Digital Services Marketplace Provide farmers with access to quality animal care services and technical support.
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Collaborative Financing Engine Unlock funding through multi-stakeholder financing.
In 2025, dairy and livestock sourcing and farming-based interventions have delivered around 17.7% of our GHG net reductions versus 2018. Since 2018, we have reduced methane emissions by 20.1%1.
1 Emissions reductions are assessed relative to a baseline year prior to commencement of a project. These projects contribute to Nestlé's climate KPIs but are separate calculations and therefore not directly comparable. Projects are financed by Nestlé or co-financed with Nestlé's suppliers on farms, in supply sheds from which Nestlé is sourcing agricultural ingredients. Projects typically represent a change in farming practices and/or infrastructure investments. In a small number of cases, this includes preferential sourcing from low-carbon farms, including premium payments to farmers recognizing the improvements already made on these farms.
Learn more in the Environmental Disclosures section of our 2025 Non-Financial Statement (pdf, 18Mb).
Our Dairy Plan is supported by the Nestlé Institute of Agricultural Sciences and other external partnerships to help identify new, scientifically proven solutions which can help further accelerate the decarbonization of dairy in the future. We are growing our expertise in the areas of plant science, agricultural systems and dairy livestock.
The most promising solutions are tested on research farms before being deployed more broadly. The Institute works in close partnership with external partners including farmers, universities, research organizations, start-ups and industry partners.
Our teams look at how these solutions can be used alongside other approaches such as the management of the dairy herd, as well as efficient farm management.
Through our Dairy Plan, we have been working closely with farmers to implement practical, science-backed solutions that help reduce emissions while improving farm resilience.
Supporting dairy farmers to reduce emissions
In the U.S., we're collaborating with the dairy industry, including through our suppliers, who contribute to the industry's transformation. We joined the Innovation Center for U.S. Dairy's Net Zero Initiative in June 2021 to support dairy farmers across the country. Together, we support the implementation of new technologies and the adoption of environmental practices (pdf, 1Mb) that we expect will also be economically beneficial. The aim is for the industry to achieve net zero emissions, while optimizing water usage and improving water quality by 2050.
American farmers in our supply chain are already on board, like Jon Rebeiro, farm manager at Trinkler Dairy, which was our first demonstration farm in the U.S., who comments, "Today on the farm, we use more sustainable practices, all of our manure that's produced by the cows is either used to fertilize crops or it's dried and used for bedding."
In George, South Africa on the Skimmelkrans farm, cow manure is collected, pressed and separated into solids and liquids. The solids are released into the soil as compost, and the liquids into the pastures as irrigation, meaning less methane is released into the air. Skimmelkrans operates in a diverse ecosystem: from releasing manure back into the soil, to growing their own animal feed without having to buy large quantities from external feed suppliers. Climate interventions are also taking place in other farms in South Africa that are part of Nestlé’s dairy supply chain.
We are expanding collaboration with several of our leading dairy ingredient suppliers.
New Zealand-based Synlait Milk Ltd. recently joined Nestlé in a unique three-way partnership with its farmer suppliers to help fund innovative tools to reduce emissions on-farm. The partnership focuses on on-farm solutions that improve efficiency. These include wastewater management systems, lower emissions feed options, advanced soil testing, alternative fertilizers, and tree planting. In the model, Nestlé, Synlait and its farmer suppliers will co-invest in these solutions over a seven-year period.
Another example is the partnership with Fonterra where projects include planting native trees on marginal farmland for carbon capture purposes, reducing on-farm greenhouse emissions by, among other practices, optimizing the use of nutrient sources, including fertilizers.
Toward responsible sourcing and traceability
Independent auditors carry out assessments of the dairy farmers involved in our supply chain against our Responsible Sourcing Core Requirements, focusing on animal welfare, labor practices and environmental impact.
In 2025, 49.8% of our key ingredient volumes were responsibly sourced*. In particular, in dairy and beef (which is part of our meat, poultry and eggs ingredient category), we achieved a performance of 60.4% responsibly sourced in the same period.
*In scope for this KPI are Nestlé’s 14 key ingredients: cereals and grains; cocoa; coconut; green coffee; dairy (derivatives and fresh milk); fish and seafood; hazelnuts; meat, poultry and eggs; palm oil; pulp and paper; soy; spices; sugar; and vegetables.
Learn more in the Environmental Disclosures section of our 2025 Non-Financial Statement (pdf, 18Mb).
To drive industry-wide transparency, we have published the list of our dairy ingredients suppliers (pdf, 100Kb) in our supply chain, along with their countries of origin.
Digital technologies have the capacity to transform the dairy industry. We have digitized the traceability of our milk, from farm to factory, using a tool called the Global Milk Solution. It includes GPS tracking and route optimization for transparency and transport efficiency. We are currently piloting new tools including calculating GHG emissions per farm or liter of milk to track progress and ensure continuous improvement. We also monitor regenerative agriculture and animal welfare practices.
Supporting safe labor practices in dairy
Supporting fair, safe and healthy working environment for farm workers is a priority for Nestlé. For several years, Nestlé has collaborated with partners and stakeholders throughout our dairy supply chain on farm workforce development in United States dairy production.
The United States National Milk Producers Federation has also developed an on-farm evaluation tool to support farmers in understanding human resources and safety management best practices. The tool aids implementation of these best practices and tracks improvements over time.
Nestlé also funds multiple projects to engage dairy workers, managers and owners in collaboratively enhancing the farm working environment. The projects focus on building trust and help improve job satisfaction, worker safety and productivity.
