Nestlé highlights innovation, digitalization and sustainability in 2019 Annual Report

SWITZERLAND – The Swiss food and beverage giant, Nestlé has published its Annual Report for 2019 highlighting the company’s continued focus on innovation,digitalization and sustainability as key ingredients to continued business success.

While the company closed its 2019 financial year with a 1.2% rise in total sales to CHF 92.6 billion (US$94.72bn) and an organic growth of 3.5%, Nestlé said that innovation continues to give the company a competitive advantage.

In order to keep pace with rapidly-changing consumer preferences, the company noted that it has changed its approach to innovation and has made processes quicker, enhanced rapid prototyping and created accelerators.

In 2019, the company funded 50 additional fast-track innovation projects leading to product launches within 6 to 12 months.

Nestlé said that it has significantly reduced the average duration of centrally-led research and innovation projects adding that its innovation strength remains rooted in its scientific expertise and the ability to leverage research findings across different product categories.

Advancing as a digitally enabled and data-powered business

Alongside a strong innovation engine, the food and beverage company noted that digitalization has been vital for its continued evolution.

With digitalization covering all aspects of Nestlé’s business, from supply chain management to production to marketing and sales, the company said that the strategy has enabled it to increase its focus on becoming faster, more agile and more consumer-centric.

In 2019, Nestlé’s e-commerce sales grew by 18.5% to account for 8.5% of total sales, firmly establishing the firm as the leading edge of the food and beverage industry.

The company says that it is moving to connect with consumers in a relevant and personalized way, having ensured that 20% of all its consumer contacts were personalized.

Nestlé has set an objective of reaching reach 40% by the end of 2020. To support this, Nestlé has also built a network of more than 25 e-content studios.

“These studios create impactful and locally relevant content with speed and efficiency, producing market- and consumer-specific communication materials in less than 48 hours,” the company said.

Nestlé has also managed to transform operations by further digitalizing its supply chains and manufacturing with a goal of creating a competitive edge through data, artificial intelligence, automation and predictive analytics.

At the end of 2019, 100 Nestlé factories were equipped with ‘collaborative robots’ that interact with humans in a shared space or work safely in close proximity.

Creating Shared Value

As part of the company’s pledge to achieve zero net greenhouse gas emissions by 2050, which Nestlé launched in 2019, the company said that it has accelerated its climate change efforts to transition to a low-carbon economy.

The company adopted the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and further supported farmers and developed a series of initiatives in agriculture to reduce carbon footprint related to sourcing of raw materials.

The company says that it will continue to work with farmers and other climate conscience initiatives to mitigate and adapt to risks associated with climate change.

Nestlé noted that it has also continued to work towards a waste-free future. In 2019, the company inaugurated its Institute of Packaging Sciences, dedicated to the discovery and development of functional, safe and environmentally-friendly packaging solutions.

Other sustainability initiatives included the launch of more sustainable packaging across its product portfolio and engaging in initiatives to support local recycling infrastructure and community-based waste management systems

This included launching innovative paper packaging materials, increasing the use of recycled plastic in its water brands and introducing new bulk delivery systems.

Looking ahead to 2020, the company had earlier noted that it expects continued growth in these initiatives and further acceleration in 2021/2022 towards sustainable mid single-digit growth.

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