- Published on January 27, 2022
Mark Schneider Chief Executive Officer at Nestlé | Rethinking Business Growth to Drive Value2 articles Follow
Nestlé is launching a novel initiative to help address community-level challenges
Nestlé’s culture is built on connection and collaboration; our leaders visit and engage with operations everywhere. Yes, we have formal reporting and are no strangers to a PowerPoint deck, but at all levels, we also go straight to the field to learn on-the-ground . That’s something I expect of my team and of myself. And that’s how (pre-COVID) I was able to spend time in Côte d’Ivoire, Ghana, and Nigeria learning the on-the-ground details of our cocoa sourcing and community support.
Some of the places I visited were considered “off the grid” back home, but being there gave me an entirely new perspective. Even in rural areas with limited infrastructure, I met local Nestlé teams who were supporting education, advising cooperatives, and working with farmers to improve growing practices. Even “off the grid” wasn’t off the grid for Nestlé. That’s one key reason that we can be a force for good in communities like the ones I visited. My trips to these communities, and the tireless work of our local teams together with local farmers, have led us to our latest undertaking: helping farm families in our cocoa supply chain reach a living income.
Last year, I shared my vision for how Nestlé can support a just transition. We’re committed to helping farmers transition to regenerative practices that will have a positive impact on the environment and community. Part of our vision of Generation Regeneration is that farmers won’t bear the cost of changing practices alone. We’re accelerating this effort first in cocoa, a crop that requires long-term efforts to address root causes of inequity and child labor risks.
Our efforts over many years have helped, but more is needed. We are launching a holistic approach to getting kids in school, accelerating farmer income and supporting families. We expect our new initiative to triple our annual investment in cocoa sustainability, to more than $1 billion over the next decade. More importantly, our fresh approaches are designed to make lasting, positive change. We believe these three key criteria for our program can help transform cocoa farming:
1. Innovate: Use Incentives Differently
When I first visited a community school in Cote d’Ivoire, I met the mother of a recently enrolled student. She told me that she was happy to have her daughter in school… as long as their income could afford it. It was a rational calculation for them, and it made our mission clear. We could help support positive outcomes for the families by offering immediate incentives for keeping children in school. Now, our income accelerator program provides financial incentives to families that help them build their income and keep their children in school.
The program rewards cocoa-farming families for practices that help them increase their incomes and benefit the environment and community.
The program rewards cocoa-farming families for practices that help them increase their incomes and benefit the environment and community. Those incentives start building long-term changes. Ultimately, those changes contribute to better farmer income, sustainability, and social impact, while providing farmers and their families an immediate financial benefit.
Incentive payments also contribute to gender equity because we divide payments equally between the farmer and the farmer’s spouse. That split creates more ways that the money is reinvested in education and community benefits.
2. Collaborate: Build solutions together, grounded in local realities
Solutions must be localized. At Nestlé, that’s a principle we apply in main ways. Our R&D facility in Abidjan, for example, emphasizes seedling research for local conditions rather than only “importing” solutions that may not be appropriate in the local context. The facility also works closely with regional universities and startups to ensure that it’s grounded in the local innovation ecosystem. By the same token, our approaches for social impact and sustainability stem from our local teams, as well as on-the-ground partners and subject matter experts.
Our teams in West Africa help bring together community leaders, government, cocoa farmers, suppliers, and other stakeholders. We engage in our work collaboratively, relying on insights from every player to tackle problems together and adapt in real-time based on what we learn.
3. Scale: Design approaches to be self-sustainable
What will make this change last? This was one of our core questions as we designed the program. Nestlé conducted a pilot program in 2020 to test our theory of change. We found that farmers in the program increased their adoption of key practices like sustainable agroforestry and pruning. Previously fewer than 18% of farmers maintained these practices, but with program support and incentives, more than 80% did. Those practices help farmers meaningfully increase their incomes and resilience season after season.
Another key element of scale is ensuring that this progress can transparently reach our consumers. We will remodel how we source cocoa to achieve full traceability and segregation of our chocolate products from origin to factory. I believe that segregating our cocoa will help our consumers take full confidence in their chocolate. That full traceability can be the basis for truly transforming the standard for sourcing. Several small companies have helped begin this journey for our industry, and improving traceability at scale can bring historic positive change for the industry.
While Nestlé’s past efforts have had a positive impact and helped protect more than 145,000 children through monitoring and support, we now need to take the next step to achieve our ambition. Nestlé plays a unique role, both because of our global presence and due to our experience providing daily nutrition to families across every income level in 190 countries. We have an understanding of the day-to-day reality of these families. To us, these communities aren’t numbers in an annual report—they’re real people that we’re engaging with every day. Supporting a sustainable future for cocoa, in both environmental and social impact, makes business sense, but it’s more than that. It’s about helping a generation of children access education and grow up in a safe and healthy environment.
These new approaches can help improve lives, lift communities, and change the cocoa-farming industry for the long term. We embark on this new era of our journey with hope, humility, and a commitment to continue to learn every step of the way.
Read more on the approach we’re taking in helping farm families in our cocoa supply chain reach a living income:
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Mark SchneiderChief Executive Officer at Nestlé | Rethinking Business Growth to Drive ValuePublished • 1d2 articlesFollowToday we’re announcing an innovative approach to help the farm families in our cocoa supply chain reach a hashtag#LivingIncome. Last year, I shared my vision for how Nestlé can support a just transition. Part of our vision of Generation Regeneration is that farmers won’t bear the cost of changing practices alone. We’re accelerating this effort first in cocoa, a crop that requires long-term efforts to address root causes of inequity and child labor risks. Our hashtag#leaders visit and engage with operations everywhere. Yes, we have formal reporting and are no strangers to a PowerPoint deck, but at all levels, we also go straight to the field to learn on-the-ground. Here’s more on how my trips to these communities, and the tireless work of our local teams together with local farmers, led us to this approach: https://lnkd.in/eYdfUZVBhashtag#SupplyChainhashtag#sourcinghashtag#purpose