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S A I N The Sustainable Agriculture Initiative of Nestlé SWISSCAM Comité de Meio Ambiente e Sustentabilidade Sao Pau

S A I N The Sustainable Agriculture Initiative of Nestlé SWISSCAM Comité de Meio Ambiente e Sustentabilidade Sao Paulo - August 13, 2004. CT-Agriculture Tasks. Support sourcing of agricultural raw materials at qualities & safety, quantities and timing needed

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S A I N The Sustainable Agriculture Initiative of Nestlé SWISSCAM Comité de Meio Ambiente e Sustentabilidade Sao Pau

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  1. S A I N The Sustainable Agriculture Initiative of Nestlé SWISSCAM Comité de Meio Ambiente e Sustentabilidade Sao Paulo - August 13, 2004

  2. CT-Agriculture Tasks • Support sourcing of agricultural raw materials at qualities & safety, quantities and timing needed • Elaborate corporate agricultural policies and ensure their implementation • Identify opportunities for competitive sourcing of agricultural raw materials • Secure the required agricultural knowledge and competence within the Group • Provide technical assistance to NOCs and their suppliers (milk, coffee, cocoa, fruit, vegetables etc.)

  3. Challenges • Evolving towards Nutrition, Health and Wellness Company • Changing business environment • manufacturing strategies • Consumer concerns • food safety issues • Consumer expectations • manufacturer liability • new quality thinking • Increasing food requirements • growing population • limited natural resources

  4. ethics, fair trade labor issues, rural life, politics ... Social Responsibility & Personal Values tangible quality Consumer needs & expectations ??? perceived quality environment, technologies (GMOs), animal health & welfare ... Function Conscience Convenient Safety Access / Affordability

  5. Challenges • Help ensuring tangible quality & safety and • Identify relevant perceived quality criteria linked with agricultural raw materials • optimize related sourcing • support sustainable agricultural production methods (ecological - economical - social criteria) • elaborate with Markets, SBUs, CT-Units specific SAIN strategies with strict business focus, e.g. Mexico, B-C&B, B-CCB, CT-QM

  6. SAIN NEMS ... Challenges in supply chain • Transparency, traceability from farm to table needed to avoid negative effects on: Input Providers Farmer Trade Processor Food Industry Trade Retail Consumer quality & safety efficiency & productivity consumer perception company image branded products ??? ethics, fair trade labor issues, rural life, politics ... environment, technologies (GMOs), animal health & welfare, ...

  7. SAIN Nestlé • Key raw materials • Direct sourcing • Preferred suppliers Company internal Network Countries Agr. supply chain Integrated strategy Food Industry Initiative support sustainable agriculture in general mainstream agriculture pre-competitive

  8. SAI Platform members Campina Danisco Dole Ecom Efico Findus Fonterra Friesland Coberco Groupe Danone Kraft McCain Europe McDonald’s Nestlé Neumann Kaffee Gruppe Sara Lee Tchibo Unilever VOLCAFE

  9. SAIN - Milk • Achievements • promoted GAP programs • Australia, China, France, Holland, UK, Pakistan ... • CT-IP target setting projects • US, Chile, Panama, Peru, Spain, France ... • SAI - working group • elaborate position paper,good agricultural practices

  10. SAIN - Coffee • Assist in production where direct sourcing China Vietnam Mexico Philippines Colombia Malaysia Ivory Coast Indonesia Brazil India Thailand Purchasing on the market : Direct procurement (partly) :

  11. • train local producers • PPP program • good agr. practices • financing (third party) • quality control • quality payment • final quality control • plant genetic • government program • income diversified • Nestlé managed • Third parties Example coffee Thailand • Key elements: • Quality assurance • Knowledge sharing • Traceability •Public Private Partnership; communication of needs i.e. quantities & qualities Farm Input Farmer Buying Station Transport

  12. SAIN / SAI in coffee • SAI-Coffee working group • Ecom, Efico, Kraft, NKG, Sara Lee, Tchibo, Volcafé • elaborate position paper, guidelines • pilot projects • Common Code for the Coffee Community (4C) • started via the DKV and GTZ • create code on sustainability and indicators - all stakeholders • 4C and SAI objectives are complementary • UNCTAD & IISD - Coffee Sustainable Partnership (SCP) • open discussion forum - all stakeholders • complementary to SAI and 4C - collaborate; supported by International Coffee Organization

  13. Nestlé Road Map • Understand what enables sustainability • Set up tools to make sustainable performance tangible • KPIs for supply chain • Joint studies with Universities and R&D • Implement measurement & management system in supply chain • Collaborate in SAI working groups (Coffee, Milk, Cereals ...)

  14. Optimised Elaborate sustainability indicators • Lead by University Bern - study indicators at farm level • collaboration of: SHL • Example: milk supply in N.E. China (smallholders <1ha) Actual

  15. Conclusions "There is no reason to prophesy the future, except in order to be very well prepared to face the future" (Pericles) • Practices / Processes • standards • Indicators • trends • Performance Measurement System • competitiveness

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