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Innovating fast to ensure long-term growth

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Innovation is at the heart of Nestlé. Ever since Henri Nestlé invented Farine Lactée to save the life of a child, we have been dedicated to enhancing people’s lives. It is a cornerstone of our success and key to our strategy. For more than 150 years, innovation has helped us build competitive advantages and continuously evolve our business, product and solution portfolio. Our expertise in understanding the relationship between nutrition and health at every life stage is unmatched and vital to supporting our growth. We identify global trends and translate them into new products that consumers crave. To sustain growth, we strive to?ensure these innovations have a positive impact on society and the environment.

Keeping pace with the consumer

Our world is rapidly changing: demographic, environmental, technological, consumer and business trends heavily impact supply and demand in the food and beverage industry. We must anticipate and adapt to shifting consumer needs, expectations and perceptions across all ages.

Our approach to innovation has changed to ensure our products are better differentiated and more consumer-centric. To increase our agility and speed to market, we have:

  • Simplified our innovation processes by reducing the number of internal approvals.
  • Shortened timelines for the translation of science into innovation, on average by 30%.
  • Funded 50?additional fast-track projects leading to launches within 6 to 12 months.
  • Enhanced rapid prototyping capabilities.
  • Created R&D accelerators where project teams (including internal staff, students and start-ups) can rapidly translate ideas into prototypes for testing.
  • Lowered capital investment for market entrance by manufacturing on highly flexible pilot lines.

At a glance

Nestlé operates the world’s largest science and innovation network in the food and beverage industry.

CHF 1.7??billion invested in research and development

25 R&D centers

30% of sales from products innovated or renovated in the last three years

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Creating competitive gaps through science-based innovation

Long-term scientific research projects help us understand the impact of nutrition on health at all ages. We aim to deliver customized and personalized nutritional solutions. Our work spans from nutrition for the first 1 000 days (including maternal nutrition) to cellular nutrition for healthy aging. We translate this research into products that offer meaningful benefits and drive growth.

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Leveraging science across categories

We leverage fundamental research across all product categories in areas such as food safety, analytical sciences, material sciences and packaging sciences. Results from life science research can be applied to both our human and Purina PetCare businesses. Examples include research in microbiome, immunology, food allergy/ sensitivity and cellular nutrition.

Our category-focused Product Technology Centers translate the results of fundamental research programs into relevant innovations. These are then adapted to different regions and markets by our application groups and innovation centers in high-growth markets.

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Innovating through collaboration

Collaborating with external partners is vital to quickly respond to complex challenges such as plastic waste. We engage with an open approach, which increases our access to disruptive ideas, technologies and business models. For example, in 2019, we launched the Nestlé R&D Accelerator based in Lausanne, Switzerland. It allows our employees and experts to collaborate with students, researchers from leading universities, suppliers and start-ups.

These teams have access to our R&D expertise and select infrastructure such as labs, kitchens, and bench- and pilot-scale equipment. Over six-month periods, they work to translate ideas into prototypes that can be tested commercially. With 1 400 square meters, the accelerator is one of the largest of its kind in the food and beverage industry. It combines our expertise and the knowledge of our academic and industrial partners with the entrepreneurial creativity of students, entrepreneurs and start-ups.

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Boosting local innovation

We remain a largely decentralized organization. Most of our 2 000 brands are locally managed. This allows us to be close to consumers across the 187?countries where we operate. To enhance our ability to identify unmet consumer needs, we are expanding our network of regional incubators and adding accelerators to each of our development centers. These efforts will generate innovations that address local challenges and can be important economic growth drivers.

In Sub-Saharan Africa we launched an R&D innovation challenge targeted at start-ups and universities across six countries. The challenge aims to discover environmentally friendly packaging solutions, sustainable solutions for transport of cocoa plantlets, affordable nutrition and new routes-to-market.

In China we launched an open innovation challenge to encourage the development of environmentally-friendly packaging solutions with Qinghua University in Beijing. This will enable us to engage with China’s research community.

In Switzerland we joined forces with universities ETH Zurich and Ecole Polytechnique Fédérale de Lausanne (EPFL) and Swiss companies Bühler and Givaudan to launch the Future Food Initiative. This focuses on research in the area of ancient grain varieties and plant-based food and beverages.

Read more in Our stories: Dialing up innovation

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Advancing sustainability

Our innovation priorities are shaped by our purpose and commitment to Creating Shared Value. This means that in addition to advancing nutrition, health and wellness, we focus on:

  • Reducing plastic waste. We are supporting the development of food-grade recyclable packaging and alternative, biodegradable packaging materials.
  • Making nutrition affordable. We are applying our expertise to ensure that healthy, nutrient-fortified products are available at lower price points.
  • Promoting sustainable consumption. We are reviving ancient ingredients and developing nutritiously-balanced dairy and meat alternatives with less environmental impact.
  • Mitigating and adapting to climate change. We are working to better manage our carbon footprint and encourage sustainable-by-design approaches across our value chains.
Downloads

The Annual Report contains our Annual Review including Creating Shared Value highlights, the Corporate Governance & Compensation Reports and our Financial Statements

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