Food giant Nestlé has published its 2022 annual report, in which it has re-iterated its ambitions around its 'Good for You, Good for the Planet' initiative, adding that it 'continued to deliver fast-paced innovations, advanced its digital capabilities and maintained its rigorous focus on strategic portfolio management'.
Nestlé reported group sales of CHF 94.4 billion (€94.7 billion) last year, a 8.3% increase in organic growth terms, while trading operating profit stood at CHF 13.2 billion (€13.24 billion).
As discussed in the report, here are ten ways in which Nestlé is seeking to position itself for the future.
1. Portfolio Management
Nestlé has said that it is taking a 'disciplined' approach to portfolio management, looking for products that are both a strategic and cultural fit, as well as offering attractive financial returns. For example, in 2022, the company acquired Seattle's Best Coffee brand from Starbucks, while it has also decided to explore strategic options for Palforzia, the peanut allergy treatment.
Nestlé acquired Palforzia through its takeover of Aimmune Therapeutics in 2020 – at the time, Nestlé Health Science CEO Greg Behar described the deal as bringing together "Nestlé's nutritional science leadership with one of the most innovative companies in food allergy treatment".
2. Innovation That Excites
Under the heading 'Innovating to unlock the power of food', Nestlé has said that it is working on a pipeline of 'highly differentiated innovations', which are tasty, nutritious, affordable, and sustainable. It added that last year, it was able to maintain the same time-to-market speed as in 2021, despite the market conditions.
Nestlé recently unveiled a new plant-based beverage developed from oats and fava beans, which the company described as a 'first-to-market' innovation.
3. Infant Nutrition
Nestlé is stepping up its development of 'science-based nutritional solutions' for infants, it said. The company recently launched infant formula with Nutrilearn Connect, a nutrient blend to increase brain myelination, and rolled out infant formulas with five human milk oligosaccharides (HMOs) to support gut health and immunity.
4. More Sustainable Coffee
The company said that it is seeking to 'bring the perfect cup of coffee to consumers in a sustainable way', praising its Nescafé Dolce Gusto Neo and Nespresso Vertuo Pop solutions – the former uses compostable paper-based pods, while the latter features units made from 35% recycled plastic.
It also plans to roll out compostable paper-based capsules that are retro-compatible with Nespresso Original machines. "You can compost the paper capsules or recycle the aluminium ones. We let the customer choose," Nespresso CEO Guillaume Le Cunff commented last November.
5. Plant-Based Expansion
Nestlé is capitalising on the market demand for plant-based products by launching new offerings across the entire food and beverage spectrum, it said.
Recent launches include Gerber Plant-tastic, soy-based Milo, KitKat V (rolled out to 15 markets across Europe after an initial pilot launch proved successful), Garden Gourmet Voie Gras, and Malher Huevo Más. Last year, plant-based products generated sales of CHF 1 billion for the business.
6. Accelerate Digitalisation
Nestlé said that it is building a 'seamless consumer experience and channel-less commerce system', by unlocking value via consumer data across geographies and categories. The company's e-commerce sales grew by 9.2% to account for 15.8% of total group sales.
As it continues its 'data-driven digital transformation', the business is confident of achieving 25% of sales through e-commerce by 2025.
7. Creating Shared Value
Making a 'positive difference to society' has long been part of the mantra at Nestlé, and in its annual report it said that it has 'not wavered' in that commitment, despite short-term challenges.
8. Net Zero Roadmap
Nestlé said that it its Net Zero Roadmap was 'strongly supported' by shareholders at its 2021 AGM, and the company added that it has already passed 'peak carbon', with greenhouse gas emissions below the 2018 baseline.
From 2024, the food giant plans to vote annually on a comprehensive report on its non-financial performance, including its climate-related agenda. Nestlé's commitment to advancing regenerative food systems supports this agenda, it added.
Its Nestlé Waters division recently announced plans to invest over CHF 100 million (€101 million) by 2030 in low-carbon logistics for its three international water brands – S. Pellegrino, Acqua Panna and Perrier.
9. Health Star Rating
According to Nestlé, it is the first company to disclose the nutritional value of its entire portfolio, via its Health Star Rating (HSR) system, which helps consumers make informed choices about the food and beverages they consume.
The HSR system is part of the group's commitment to increase transparency around its product ingredients, in line with its 'Good For You' pledge.
10. Making Nutrition Affordable
Nestlé said that it is aiming to provide lower-income consumers with 'high-quality food products that deliver nutritional value at an affordable cost'.
Most of the company's affordable and accessible offering is fortified with at least one of the 'big 4' micronutrients (iron, vitamin A, zinc, and iodine), while in 2022, it provided 129.2 billion fortified servings of affordable nutrition products.
In a note to shareholders, CEO Mark Schneider and chairman Paul Bulcke said, "For decades, our activities and products have aimed to make a difference to society in order to foster ongoing success. We have not wavered in that commitment in the face of short-term challenges this year."