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Dairy

Dairy is our biggest raw material by volume. Milk and milk-derived ingredients are used in many of our products, including dairy and infant nutrition products, as well as in ice cream, beverages and confectionery. Milk is an important ingredient in nutrition, as it contains large quantities of first-rate protein, and is also an important source of energy, calcium, magnesium and phosphorus, as well as many essential vitamins and trace minerals.

CSV - Responsible sourcing - Dairy - traceable dairy

91%

of dairy traceable in 2019

CSV - Responsible sourcing - Dairy - dairy responsibly sourced

86%

of dairy responsibly sourced in 2019

CSV - Responsible sourcing - Dairy - traceable milk

99%

of fresh milk traceable in 2019

CSV - Responsible sourcing - Dairy - milk responsibly sourced

85%

of fresh milk responsibly sourced in 2019

Our dairy supply chain

Our milk is sourced from many countries around the world, from small-scale backyard farmers to professional dairy farms. Each farming environment has different individual, regional or national characteristics and challenges, so our approach is not one-size-fits-all.

The challenges each farm faces can affect the quality of the milk supply, as well as responsible sourcing and environmental sustainability. However, our approach ensures that whether the producer is an individual farmer with a single cow or a professional family farm, every liter of milk we purchase meets our stringent quality and safety standards as well as our Responsible Sourcing Standard (pdf, 2.4Mb).

To identify and understand the challenges farmers face and implement solutions, we assess practices at farm level and drive actions using our Theory of Change model.

Find out how the Theory of Change works in practice.

Our approach to sourcing dairy sustainably

We have two complementary approaches to sustainably sourcing dairy: the Dairy for You initiative and the Sustainable Dairy Partnership collaborative model.

Our Dairy for You initiative

Our Dairy for You initiative has two key objectives:

  • To continuously improve our sourcing operations, notably with respect to milk quality, traceability, animal welfare, environmental footprint, women and youth in agriculture.
  • To transparently share our achievements and progress with key stakeholders, including consumers.

This initiative encompasses three areas:

  • Quality – delivering full milk traceability and ensuring food safety.
  • Agriculture – supporting dairy farmers, applying best practices and standards and improving animal welfare.
  • Environment – caring for water, steering toward a net-zero future in our dairy value chain and using recyclable or reusable packaging.

Every year, in our direct milk sourcing operations, we train farmers and help them adopt better practices that increase productivity and incomes. In 2019, more than 84 000 farmers delivering to Nestlé received technical assistance from us, of whom 8400 were women and 1500 were aged under 30.

Nearly 3000 dairy farmers in 12 countries also participated in our agripreneurship program in 2019. Agripreneurship is aimed at developing the next generation of farmers who have the dynamism and mindset to develop their farms into successful businesses. More than 400?of the dairy farmers participating in our agripreneurship activities in 2019 were under 30 years old.

Sustainable Dairy Partnership

In 2019, Nestlé continued to support the development of the Sustainable Dairy Partnership (SDP), a collaborative effort to change how sustainability is managed in the dairy value chain. The SDP provides a streamlined sustainability approach for customers and suppliers, allowing dairy processors to report their progress in a standard way. The SDP is based on the 11 sustainability indicators defined by the global Dairy Sustainability Framework. The model also includes tools for verification and reporting.

The sustainable maturity of a company includes five stages:

  1. Committing to sustainability.
  2. Identifying relevant issues, benchmarking and establishing plans.
  3. Reporting progress.
  4. Verifying improvements and gradually widening the scope of sustainability.
  5. Becoming a leader in the sector.

Transparency

To hold our suppliers and ourselves accountable as well as driving industry-wide transparency, we have published the list of our Tier 1 dairy ingredients suppliers (pdf, 1Mb)?and the list of our fresh milk suppliers in our supply chain, along with their country of origin.

Using technology to help farmers and transparency

Digital technology has the capacity to transform the dairy industry. We have digitized the traceability of our milk, from farm to factory, using a new tool called Global Milk Solution, which includes payroll, GPS tracking and route optimization to ensure transparency and transport efficiency. We are currently piloting more features for this solution, including calculating the greenhouse gas (GHG) emissions per farm or liter of milk to track the progress of our continuous improvement journey.

In parallel, we are also testing the use of blockchain technology to provide increased transparency on origin and sustainability data. In 2019, we started working with OpenSC (a platform founded by WWF Australia and Boston Consulting Group Digital Ventures) and one of our major dairy suppliers to pilot the use of blockchain to help quantify, verify and share information relating to the environmental impact of our dairy supply chain in New Zealand.

Monitoring practices at farm level

Based on requirements, we carry out risk assessments of the dairy farmers involved in our supply chain against our Responsible Sourcing Standard (pdf, 2.4Mb), focusing on animal welfare, labor practices and environmental impact. Our farmers are assessed by independent auditors such as SGS. Since the beginning of our assessment program in 2013, we have carried out more than 1349 farm assessments in 30 countries, identifying opportunities and areas for improvement. With input from our external stakeholders, the assessments also help us identify remediation and capacity-building activities.

Natural capital

Improving irrigation

Read how Nestlé is helping develop an inexpensive device to improve farm irrigation.

Working toward net-zero emissions

Our recent Climate Pledge to commit to net-zero emissions by 2050 will push us to seek new innovations to offset and inset our emissions. One way we can achieve this is through activities at source with our dairy suppliers.

In 2019, we launched a pilot project in Switzerland and Pakistan, aiming to tackle GHG emissions. The project included 46 farms in Switzerland and established emissions benchmarks, which were used to develop reduction roadmaps for each market. The approach will be rolled out to the remaining markets in 2020.

Reducing emissions for Dutch and German dairy farmers

In 2019, Nestlé and dairy ingredients supplier FrieslandCampina started a two-year project in the Netherlands and Germany to reduce GHG emissions. The aim of the project was to better understand how dairy farms can reduce their emissions, first by identifying emissions sources shared by all. This was achieved by using FrieslandCampina’s Carbon Footprint Monitor to identify current emissions, from cradle to farm gate. This covers emissions from using purchased goods (such as feed and fertilizer), from on-farm feed production (including from the use of fertilizers), from the cow (the emissions of methane due to the cow’s digestive processes), from manure management and from the use of energy. The project asks farmers to reduce those emissions that they can address immediately, for example by improving efficiency in the use of manure as a fertilizer, thereby reducing emissions of nitrous oxide. The farmers are assisted by experts to help them implement such measures successfully.

An improvement plan was successively drafted for all farms, identifying areas each farmer could address. During workshops and individual farm consults, farmers were enabled to put their plans into practice. Both Nestlé and FrieslandCampina expect the project to deliver more insights in 2020, specifically on how individual farm characteristics can have an impact on effective emission reduction.

Measuring soil carbon capture in European dairy farms

The International Panel for Climate Change has developed a methodology for carbon capture, enabling countries to report on their progress toward delivering the targets set by the Paris Agreement. However, at local and individual farm levels, estimating carbon capture in soil is extremely challenging. In 2018, seven progressive dairy and beef industry organizations in Europe joined forces with scientific experts in soil and lifecycle assessments.

The partnership specifically focused on two aspects:

  • Developing a ‘farm level’ methodology and guidance based on the latest science.
  • Enabling farmers to better understand and apply effective practices to maximize carbon capture in their unique soil type, geography and climate.

The partnership aims to release a draft lifecycle assessment methodology for dairy and beef in late 2020, before completing and publishing the final approach in 2021. Through this project, Nestlé is partnering with Arla Foods, FrieslandCampina, Fonterra, Danone, Mars and McDonald’s.

Animal welfare

Upholding rigorous animal welfare standards

We recognize and share our stakeholders’ concerns about the welfare of animals raised for food and the need to ensure sustainable animal production systems. Through our Responsible Sourcing Standard (pdf, 2.4Mb)?and our Nestlé Commitment on Farm Animal Welfare (pdf, 1.4 Mb), we are helping bring about positive change throughout our supply chains.

We are dedicated to eliminating from our global supply chain specific practices that are not consistent with the internationally accepted Five Freedoms.

In the case of dairy, we focus specifically on eliminating:

  • Painful practices, such as tail docking, dehorning and disbudding without the use of anesthesia and analgesia.
  • Confinement practices, such as permanent tethering.
  • The irresponsible use of antibiotics, in line with World Organisation for Animal Health (OIE) guidance.

In recent years, we have contributed to the stakeholder consultation process on the Business Benchmark on Farm Animal Welfare, a global measure of animal welfare standards in food companies supported by the nonprofit organizations World Animal Protection and Compassion in World Farming. In the 2019 report (published in February 2020), Nestlé was recognized in its efforts to progress animal welfare and was ranked for the first time in the Tier 2 category, with animal welfare ‘integral to business strategy.’ This is real progress on previous years, when we were ranked as Tier 3 (‘established but work to be done’), and is mainly the result of greater transparency. Find out more about what Nestlé is doing to improve animal welfare on farms and through our dedicated Nestlé Farm Animal Welfare Questions and Answers (pdf, 0.3Mb).

Monitoring cows’ well-being in Brazil

A pilot scheme launched in Brazil in 2019 is providing new levels of information on the health and well-being of dairy cows. Sensors – the bovine equivalent of a Fitbit – are placed on cows’ necks and provide farmers with 24/7 data on their animals’ condition and behavior: how much time they spend moving or resting, when and how often they eat or ruminate, their energy levels, when they are going to be ready for mating and more. The sensors can even indicate potential health issues 24 hours before they would show up in the milk supply, which is when a vet would be able to make the diagnosis.

The sensors have been tested successfully on 1250 cows. The technology is enabling farmers to see increases in yields and incomes as a result of reduced stress in the cows. And it’s not just the farmers who can follow the progress of their animals. A QR code on milk cartons enables consumers to scan and track the herds from which the milk originated and gain reassurance that the cows are healthy, less stressed and able to move naturally. This is good news for consumers and cows alike.

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