Water Management of a Global Food and Beverage...

Name of chairman

Christian Frutiger, Nestlé S.A.Public Affairs Manager

Water Management of a Global Food and Water Management of a Global Food and Beverage CompanyBeverage Company

Academia EngelbergWater – Private or Public Good? Engelberg 12 October 2007

Name of chairman2 Academia Engelberg 2007: Water Management of a Global Food and Beverage Company - 12 Oct. 2007

Founded 1866 in Switzerland as a nutrition company

CHF 98 bn (€ 59 bn) sales in 2006(CHF 32 bn in emerging markets)

500 factories; about half in developing countries

265'000 employees worldwide

Strong portfolio of brands and innovations driving growth

Transforming into Nutrition, Health & Wellnesscompany

Nestlé: Largest Food & Beverage company


Pharma

Beverages

25 Brands with Sales over CHF 1 Billion

Chocolate, confectionery and biscuits

Prepared dishes and cooking aids Water

Milk products PetCareNutrition

Ice cream


COMPLIANCELaws, Business Principles, codes of conduct

SUSTAINABILITYProtect the future

CREATESHARED VALUEReduce poverty, Improve health

Empower people




Empower people




Empower people

“We believe that the true test of a business is whether it creates value for society over the long term"

Peter Brabeck-Letmathe, Chairman & CEO, Nestlé

Nestlé’s Concept of Creating Shared Value


Shared value creation analysisFood company value chain

• Agricultural supplier development

• Purchasing practices

• Sustainable agriculture

• Environmental, labour safety practices

• Better food safety standards

• Work force development

• Distributor development

• New/renovated products for nutrition, health & wellness

• Increased knowledge -Nutrition, health

• Bottom of the pyramid

• Public - Private partnerships

Agricultural sourcing

Manufacturing &distribution

Products & Consumers


Why is water a top priority for Nestlé ?

Food & Beverage sector needs clean water even more than others:

– To grow high quality raw materials

– To turn them into nutritious, safe consumer products

– To ensure that consumers can prepare them properly

– As a convenient, healthy product in bottles

Caring for water means

– protecting the future and

– creating value for the Company and Society


Clean Water: Vital for Nestlé


Significant savings in own operations

• Production volume nearly doubled • Water consumption down 29% • Waste water down 37%

• 47 billion litres saved in 5 years overall• 8 billion litres saved in 5 years in bottled water• 354 thousand tonnes packaging material saved

Value for Society: reduced impact on water availability/waste/packagingValue for Nestlé: risk and cost reduction


Improving operational water efficiency

• Consistent improvement, measured over time• ISO 14001 certification worldwide by 2010• Focusing on water-stressed areas

Value for Society: reduced impact on water availability/usageValue for Nestlé: risk and cost reduction

Water recyclingat Shuangchengmilk factory, China

Water recyclinglake at Chachengsaocoffee factory, Thailand


Pioneering waste water treatment

• First objective to minimise waste water• First treatment plant 1932• First to build treatment plants, before legislation

Nigeria: sharing knowledge with Ghanaian colleagues for 2007 Tema plant

Agbara plant, Nigeria: awarded "most environmentally proactive industry" in 2006

Value for Society: best in class waste water treatment facilities, skill transferValue for Nestlé: risk and cost reduction


Sensitising tomorrow's consumers

• Project WET: 500,000 teachers, millions of children in 26 countries

Project WET: worldwide water sensitisation programme for children

Value for Society: future generations sensitised to water issuesValue for Nestlé: building relationship with potential future consumers


Influencing better water management

• 850 agricultural extension experts helping 400,000 farmers to improve water and effluent management

• Coffee farmers: irrigation and post-harvest treatment techniques save up to 90%

Empowering 5,000 female agricultural extension workers in Pakistan, including water management

Biofuel from cow effluent helpskeep water clean and food hot in Shuancheng milk district, China

Colombian coffee technician teaching water management to Ethiopian farmers

Value for Society: knowledge sharing, improved agricultural water management practicesValue for Nestlé: quality supplies from motivated, enabled farmers


Improving community access to clean water

• Community engagement: 36 water related projects• Indian milk district water facilities reach 25,000 children• IFRC partnership: water and sanitation focus• Water and Peace: IFAPA project in Rwanda – 53’000 beneficiaries

Mozambique: clean water wells for 30’000 as part of IFRC partnership, scaled up by EU to over 160’000

LEAP and EcoLink – water management part of community development, South Africa

One of 71 clean drinking water facilities in milk district villages, Moga, India

Value for Society: clean water in water-poor regionsValue for Nestlé: quality supplies from motivated, enabled farmers


Future water management directions: Scaling up efforts in agriculture

• Building best practice repository, share with Sustainable Agriculture Initiative (SAI)

• Research into drought resistant plants• Incorporating water into all agricultural assistance

Water management as a major part of agricultural extension projects in Indian milk districts

Investigating research possibilities with drought-resistant coffee and cocoa

Water source protection techniques in Mexico

Value for Society: clean water in water-poor regions, knowledge sharingValue for Nestlé: informing future strategy, quality supplies from motivated farmers

Name of chairman

Influence of major food/beverage companies

in bn US$ (2006)in % of world food total

100%

340340

11’’070070

22’’930930

44’’660*660*All food & non-alcoholic drink,at consumer prices

of which:processed food and drink

20 top grocery retailers,turnover

20 top food & d. manufacturers,turnover

65%

8%

23%

Sources: various, UN WIDER; analysis EIR


UN Global Compact – CEO Water Mandate


CEO Water Mandate: A call for action

1. Direct Operations2. Supply Chain and Watershed

Management3. Collective Action4. Public Policy5. Community Engagement6. Transparency

A commitment to action in the spirit of helping to solve the global water crisis

Designed to assist companies in developing a comprehensive approach to water management :

Driven by The Coca-Cola Company (USA), Levi Strauss & Co. (USA), Läckeby Water Group (Sweden), SABMiller (South Africa), SUEZ (France), Nestlé (Switzerland)


Danke für Ihre Aufmerksamkeit!

www.nestle.com

Name of chairman

Additional water demand – biofuel targets

Water withdrawn:for 1 lt of biodieselup to 9,100 l

for 1 lt of ethanol from irrigated corn;up to 3,700 lt*

World 10% target (transport energy only): will require800 – 1,300km³ of freshwater per year

Sources: US Dept. of Energy/Berkeley University, 2006

Name of chairman

Household shortage? Investment challenge

•Investment for water distribution and sanitation 34 countries (source OECD)

•needed 2007-2025•US$ 1040 billion per year

•actual annual investment as of today•US$ 580 billion

Present water losses in

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