This afternoon (18.30 CET), the London Overseas Development Institute is holding a public discussion on the role of technology in improving the productivity and efficiency of African agriculture.

Sir Gordon Conway, Professor of International Development, Centre for Environmental Policy, Imperial College London; Dr Christie Peacock, Chief Executive, Farm Africa; and Jim Sumberg, Research fellow, Institute of Development Studies are heading up the panel.

Part of a series on Agricultural futures in Africa, the event will explore how innovations should be generated: by formal scientific research, farmer-to-farmer communication, or an intermediate approach.

Considering the significant investment Nestlé has made has made over the past 12 months in improving the quality of raw materials we source in Africa – specifically cassava, cocoa and coffee - I will be watching the webcast with interest.

Last month we released the first of our higher-yielding, disease resistant cocoa crops – propagated at our Regional Development Centre in Abidjan, Cote D’Ivoire - to three farming cooperatives, who we are also training in improved farming techniques as part of the Cocoa Plan.

So far the signs have been very promising, but it will take sustained commitment from Nestlé and the farming cooperatives we work with to make this new method of sourcing a long-term, commercially viable success.

As this Guardian article notes, a similar project undertaken by the newspaper group, the African Medical and Research Foundation (Amref) and Farm-Africa in Katine (a rural sub-county of north-east Uganda) experienced a setback recently when cassava farmers did not fully benefit from new agricultural techniques because of poor weather conditions and not enough supervision.

The challenge for our Cocoa Plan therefore lies not only in staying on the cutting edge of plant science to create the best possible quality crops, but also to ensure that the farmers who receive these are equipped with the knowledge and tools to optimise their output and given the incentive to apply them.

On Thursday 24 June, more than 1,000 global leaders from business, governments, civil society, and academia are expected to attend the two-day United Nations Global Compact Leaders Summit 2010 in New York, of which Nestlé is a Patron Sponsor.

The largest ever UN business event on the issue of corporate responsibility, its size reflects the ambitious scope of its agenda. Priorities are those issues ‘central to corporate leadership today and essential for the achievement of sustainable markets’, with focus on what is being done to support the achievement of the UN Millennium Development Goals (MDGs).

Some of my colleagues will be attending, using our second MDG report - released to coincide with the summit - to share Nestlé’s experiences of assessing its actions in relation to these time-bound targets.

As someone still very new to the company, the report was one of the first projects I worked on, and it was an eye-opening introduction to the scale of Nestlé’s operations. For example, I didn’t know that it is the world’s largest direct buyer of coffee, purchasing 780 000 tonnes a year, or that it annually spends more than CHF 20 billion on raw materials.

I initially found it hard to understand how a business of this size can make a real impact at local level, but one of the case studies that really stood out was Community Empowerment through Livestock Development and Credit (CELDAC).

This initiative involves Nestlé working in partnership with the UN Development Agency to enable female dairy farmers in rural Punjab, Pakistan improve their livelihoods by providing them with training in primary livestock management and milk production and giving them access to microfinance. A main cause of economic difficulty for these women is when their animals succumb to treatable illnesses, which happens frequently. This is because there are few vets in the region, and as these are predominately men it makes contact with female farmers problematic.

When something like this makes you begin to appreciate the complex local or cultural nuances of any particular development challenge, the idea of representatives from big organisations meeting at big events to talk about the ‘bigger picture’ may seem a little removed from problems on the ground.

However that would be to overlook the existing local engagement, experience, and capacity for technical implementation that businesses with a global reach can offer specifically national and local initiatives, and the transformational effects these partnerships can set in motion.

Through CELDAC, 3,000 women have already been trained in basic veterinary skills by certified female ‘Master Trainers’, and equipped with kits comprised of medical instruments, medicines, and vaccines – not only building their capacity to rear livestock more effectively, but enabling them to become socio-economically empowered. So successful is that project that it has been taken up as a case study of public private partnerships at Harvard Kennedy School.

CELDAC’s success shows what strong multi-agency partnerships can achieve.  It doesn’t matter whether these are formed in the middle of Manhattan or in rural Pakistan, it’s the will to communicate and work collaboratively wherever you are in the world that counts.

You can download the Nestlé and United Nations Millennium Development Goals 2010 report here.

 

Nestle_UN _MDG_2010.pdf (1.64 mb)

Last week I was delighted to attend the official handover ceremonies of cocoa plantlet nurseries to three farming cooperatives across Côte d’Ivoire, in the latest stage of The Cocoa Plan.

The Enterprise Cooperative of Yamoussoukro (ECOYA), Agricultural Cooperative of Zoukougbeu (CADZOU), and the Association of the Women Producers of Coffee and Cocoa cooperative (AFPCC), belong to a group of six local contracted co-ops who are distributing higher yielding, disease resistant plants to farmers.

Developed by the Nestlé R&D Center in Abidjan, a total of 140,000 of these 'super cocoa trees' have already been established in plots of 20,000 each at seven cocoa nurseries, including one in Abidjan. As the rainy season is just starting, June is the perfect month for young plantlets to find the right soil, so it was high time for the first generation to be released.

Yamoussoukro was the first city to celebrate this event. Alphonse N' Goran, Chairman of ECOYA, gave me and my Nestlé colleagues - Cheikh Mboup, Head of Agronomy, R&D, and Kam-Rigne Laossi, Project Manager, R&D - a very warm welcome. Speaking to the various village heads and the members of his cooperative, he declared that Nestlé was offering them ‘a cocoa for the future’.

The second stage handover took us to Daloa. We were greeted by members of CADZOU and Local Director of Agriculture Kouaho Assi, who said that the issue of ageing cocoa plantations in Côte d’Ivoire underlines the importance of this project for the future of the country’s cocoa culture.

The village of Divo, located in South Bandama, 150 km from Abidjan, was our final stop. Agathe Vanié, President of the 600 women-member AFPCC cooperative and organiser of the event, gave a moving speech in which she described the cocoa nursery as “the most beautiful of all presents”.

Agathe said The Cocoa Plan symbolised a revolution for the women of South Bandama, as it has finally enabled them to fight for their right to possess plots of land. Like most of her colleagues, Agathe has never been to school, and so does not know how to either read or write. She says she holds this project dear because she believes it will help her village to move out of poverty.

Agathe encouraged all the villagers to stop selling their plots of land and to join The Cocoa Plan: “We have to fight so that it becomes a success," she said. “The land we have is our only wealth.”

There are more than 500,000 small farmers in Côte d’Ivoire, the majority of whom are not motivated to produce premium cocoa, which is declining in both quantity and quality. For me, seeing The Cocoa Plan in action shows that while it is not a quick fix for the many issues facing the cocoa farming communities we work with, it is providing people with the incentive to improve their industry, and a real reason to feel proud of it.  I think that is an excellent start.

You can see my pictures from the three ceremonies here.

 

I was pleased to be invited to speak at the Society for International Development’s annual conference in Washington D.C. recently.

'Common ground on foreign aid: deepening the dialogue', included a broad-based audience of more than 500 people actively engaged in the field of international development. My co-panelists included Jon Ortmans from the Kauffman Foundation/Global Entrepreneurship Week, Michael Levett from CDC Development Solutions and Robert Mosbacher, Jr.of the Overseas Private Investment Corporation. The audience for my session primarily consisted of entrepreneurs who do business at the local and community levels.

One of the most interesting things I took from the discussion was the degree to which they thought of Nestlé as only a chocolate company. They didn’t realise that we are the world’s largest food and beverage company, and I sensed their genuine surprise at the extent of our engagement. Not only were they interested to learn that we produce some of the USA’s best-known brands, including Lean Cuisine, Gerber and Purina, but also that because of our global commitment to Creating Shared Value, we are still able to provide a lot of support to communities at local level, particularly in our three focus areas of nutrition, water, and rural development.

Using The Cocoa Plan as an example, as I described the research and development work Nestlé has undertaken to develop higher-yielding, hardier cocoa plantlets (young plants used for plant propagation) and the steps we’ve created to take them to local farmers:

• Hardier cocoa plantlets are brought to farmers so that they will get more yield on less land
• Farmers are trained in best practice techniques to improve yields and water management
• The supply chain is then improved with more streamlined collection and distribution, directly increasing farmers’ income

I think the examples I shared underscored that Nestlé isn’t just focused on the short-term, but that our investments are meaningful and long-term. We participate in multi-stakeholder engagement to enhance social and working conditions in cocoa farming regions by collaborating with organisations like the The World Cocoa Foundation, with the goal of driving our business and strengthening local communities in ways that are truly sustainable. I was proud to join in this productive discussion, and based on the feedback I later received from my fellow panelists and audience members, I believe people appreciated learning about the work we do and the merits of Creating Shared Value.

This evening, the non-profit organisation, International Development Enterprises (IDE) Cambodia, was awarded the first Nestlé Prize in Creating Shared Value for a rural development project which aims to improve the living standards of the Cambodian rural population by increasing agricultural productivity and income.

Since 2005, IDE Cambodia has developed a network of small rural entrepreneurs to become Farm Business Advisors (FBAs), selling a range of products and services to help small-scale farmers improve their farming techniques and income.

The FBAs are given training and business support by IDE to assist farmers to initiate, intensify, or expand market-oriented agricultural production.

Through this approach, farmers become more effective producers and marketers, thereby increasing their revenue. In turn, FBAs earn an additional income from selling their products and services at a profit.

 

Creating  Shared Value is right at the heart of this project.  If the farmers are successful, the FBAs are successful.  The system flourishes only if there is real value being created at the farm level so everyone in the project is heavily invested in the farmers’ success. 

 

Thanks to our commitment of CHF 500,000 (approximately, USD 475,000), IDE Cambodia will significantly expand this project and positively impact an additional 20 000 people in more than 4 000 rural households. This adds to the 4 500 farmers the IDE already supports in Cambodia.

More information about the CSV Prize can be found here.

The Nestlé Prize in Creating Shared Value is awarded every other year to an individual, NGO, or small business. 

This is to encourage and reward an outstanding innovation for improving access to and management of water, improving the lives of farmers and rural communities, or bringing improved nutrition to populations suffering from nutritional problems.

You can watch a film about IDE Cambodia here. Pictures of the project in action are also available here.  

 

On Thursday 27 May 2010, experts from a range of organisations including Nestlé, the International Business Leaders Forum (IBLF) and the UN Office for Partnerships, will meet at our second international Creating Shared Value Forum.

 

International thought leaders including Dr Robert E. Black, Chair, Department of International Health, Johns Hopkins University, Bloomberg School of Public Health, Dr Colin Chartres, Director General of the International Water Management Institute and Ruth Oniang’o, the Founder and Executive Director of the Rural Outreach Programme (ROP), Kenya, will convene in London to explore the development challenges certain to face businesses and global partners over the coming years.

We will also be announcing the winner of our first Nestlé Prize in Creating Shared Value.

 

This interactive event is an opportunity for you to listen to and engage with some of the world’s top experts in nutrition, water and rural development. Watch the live webcast and submit your question to the expert panel, or get involved by joining the live discussion we are hosting right here on the CSV Forum pages.

A programme of the day’s events is available on our main Nestlé website, where highlights will also be posted after the event.

 

Last week, we made a further step in our commitment to fight the major issue of deforestation, when José Lopez, Executive Vice President of Nestlé S.A, announced in Malaysia that we are entering a partnership with TFT (The Forest Trust).

Nestlé is partnering with The Forest Trust (TFT), a global non-profit organisation, to help the company build responsible supply chains by identifying and addressing embedded social and environmental issues. Nestlé is the first global consumer goods company to become a TFT member.

 

Starting with palm oil, we are studying our supply chains to determine a similarly ambitious target for the pulp and paper we use. Together with TFT, we have defined Responsible Sourcing Guidelines, a set of critical requirements to guide our procurement process and to ensure compliance with the Nestlé Supplier Code. The partnership will focus on assessing suppliers' performance with respect to these guidelines and on providing technical support to those who currently do not meet the requirements, but who are committed to achieving sustainability.

 

Our actions will focus on the systematic identification and exclusion of companies owning or managing high risk plantations or farms linked to deforestation. We have already set the goal that by 2015, 100% of the palm oil we use will be sustainably sourced. We’ve made strong progress towards this, with 18% of our palm oil purchases in 2010 coming from sustainable sources. We expect this to reach 50% by the end of 2011.

 

By setting critical requirements for our procurement process and checking compliance with our supplier code, we want to ensure that our products have no deforestation footprint.

Agriculture employs over one-third of the world’s working population and three-quarters of the world’s poorest people live in rural areas. We work directly with approximately 540 000 farmers around the world to help them to improve their productivity, protect the environment and increase their incomes. The wellbeing of the communities from which we draw our agricultural raw materials and source local labour is vital to our success as a business and to our shareholder value. Through rural development, providing local employment and encouraging sustainable production practices, as well as purchasing directly from small-scale suppliers and intermediaries, we not only seek to protect the supply and quality of our raw materials, but also to have a positive, long-term impact on the local economy and the living standards of rural communities.

• What are the key factors in rural development and the eradication of extreme poverty and hunger?
• How can the strengths of business be tapped more effectively and how can the weaknesses of business be best addressed?
• What can be done to promote better gender equality and to empower women?

Nestlé Equatorial Region and the East Africa Dairy Development (EADD) project have entered into a partnership which will see an elaborate collaboration between the two entities in the development of the dairy sector in Kenya, Uganda and Rwanda. This partnership is part of Nestlé’s commitment to the development of rural communities through its Creating Shared Value business principle. Through this project Nestlé works with stakeholders across the entire value chain; from farmer, the chilling plant, to the processing factory to help improve milk production in the region, thereby improving the lives of all the stakeholders in the dairy industry and simultaneously creating value for our shareholders. In order to help farmers in a more systematic way and share best practice, Nestlé will lead next month an EADD delegation to India to showcase one of its model milk districts, where thousands of farmers are benefiting from Nestlé’s expertise. The ultimate aim of this project is to provide market access to the farmers in Kenya through the purchase of powdered milk. Through this collaboration, Nestlé will be able to produce full cream powder enabling the company to export milk products to other COMESA (Common Market for Eastern and Southern Africa) countries increasing both availability and affordability in the region.

The World Bank has recently set up the Global Agriculture and Food Security Program (GAFSP), a multi-donor trust fund to improve food security and incomes in low-income countries through assistance to agriculture. This multi-lateral financing mechanism includes both a public- and private-sector financing window to provide grants, loans and equity investments aimed at raising agricultural productivity, linking farmers to markets, reducing risk and vulnerability, improving non-farm rural livelihoods, and providing technical assistance and capacity development. The fund’s founding donors, Canada, the Republic of Korea, Spain, the United States of America and the Bill and Melinda Gates Foundation have pledged initial contributions totalling $880 million.

Vertical farming, an idea first conceived in a Columbia University classroom in 1999 is slowly gaining traction. The Huffington Post has compiled images of some of the most innovative vertical farm designs around the world. Vote for your favourite!

Janne Nielsen presents a case study of Danper – an agricultural export company in Peru that has positively influenced the local community by embracing CSR.

Nestlé has teamed up with the Tanzania Coffee Research Institute (TaCRI) to help improve Tanzania’s coffee sector. In 2009, the partnership offered TaCRI scientist Damien J. Mtenga a one-year training programme on Somatic Embryogenesis (SE) – an accelerated propagation method of reproducing large numbers of high-potential plantlets. Thanks to this training at Nestlé’s R&D Centre in Tours, the TaCRI will continue to support the rapid multiplication of new improved varieties and distribute them to farmers.  This will ensure a good quality coffee production at an affordable cost, a healthier environment and a sustainable supply to consumers. Nestlé purchased more than 154 million USD worth of coffee from Africa in 2008. Sponsoring scientists like Mr Mtenga is part of Nestlé’s business strategy to create shared value along our value chains – shareholders, employees, farmers, consumers and the communities where we operate. As one of the world’s biggest buyers of coffee, Nestlé continues to ensure that this crop is produced in a sustainable manner and also produces value right through the supply chain, particularly for farmers. Over the last 30 years, at its R&D Centre in Tours, France, Nestlé has developed the expertise to propagate higher quality coffee plantlets that have helped to rejuvenate coffee plantations around the world.

Training opportunities for farmers in South Africa have been boosted under an initiative to increase the growth of vegetable crop chicory, used in Nescafé Ricoffy. Modelled from a successful initiative which started in India in 2004, over a dozen farmers have been offered the opportunity to farm chicory and learn through coaching and mentoring techniques to progress from small-scale to commercial farming level. Chicory – used in the Nestlé instant coffee mix – is often used as a caffeine-free coffee substitute. Johan Spies, Agricultural Services Group Manager for Agricultural Services in Nestlé South Africa said: “We need to motivate and train farmers, particularly emerging black farmers, in the skills of growing chicory.  In providing enough chicory from a sustainable source, plus giving farmers with no or little income some expertise and creating a market for the product at a good price – all highlights Creating Shared Value (CSV).” As part of the South African government's policy of land redistribution, black farmers have now been given the opportunity of farm ownership through an organised process.  This has necessitated the need for training opportunities for farmers with little practical farming and business skills to run sustainable farms.

Creating value for society while creating value for shareholders is Nestlé’s approach to CSR. As women are a major workforce at Nestlé – in farms, factories and offices – Nestlé has implemented a worldwide initiative to accelerate gender balance. This initiative includes giving our leadership teams the necessary background and best practice guidance necessary to increase gender balance,  Some reviewing human resources processes, and deploying locally adapted action plans in all markets. Nestle Japan, for example has run gender balance awareness workshops with more than 250 participants, including its entire management team, while 3 task forces (one each for sales, factories, and women and leadership) have been set up. Nestlé also has specific programmes targeted at women in the farming communities where the company sources its raw materials. The Village Women Dairy Development Programme in the Moga milk district of Punjab, India, focuses on advising female dairy workers on efficient water usage and other agricultural practices. Nestlé is also promoting cottage industries for women in South Africa and conducting nutrition education programmes for women in Nigeria. We would like to thank you for your continued support as we celebrate Women’s day today!

Nestlé today inaugurated the USD 100 million expansion of its milk processing facilities in Kejayan, Indonesia, which has now become one of Nestlé’s ten largest milk-processing plants worldwide. In one of the company’s largest investments ever in the country, Nestlé is aiming to double the Kejayan plant’s capacity to produce high quality nutritious milk products to meet the demand of Indonesian consumers. This will significantly increase Nestlé fresh milk intake from local dairy farmers to more than one million litres per day in the next few years from its present intake of approximately 620,000 liters per day. The Kejayan plant has always stood as a symbol of Nestlé’s commitment to Indonesia, particularly to the 30,000 dairy farmers of East Java, Indonesia who have been collaborating with the company for over 30 years. The expansion is expected to have a significant impact on the economic development of the surrounding area. An excellent example of creating shared value --  for society as well as shareholders.

The first edition of the Nestlé Prize in Creating Shared Value was a great success with more than 500 applications received from all over the world. Thank you to all participants for sending us their project applications! Applications received represented a broad range of approaches to problems of nutrition, water, or rural development. Examples of projects included innovative solutions for improving access to and management of water, for improving the lives of farmers and rural communities, or delivering high nutritional value to populations suffering from nutritional deficiencies. The Nestlé Prize Screening Committee selected the best applications from the pool of entries and the Nestlé Advisory Board on Creating Shared Value will choose the Nestlé Prize Laureate. Mark your calendar: the winner will be announced on 27 May, 2010! The Nestlé Prize in Creating Shared Value seeks to recognize successes in the areas of nutrition, water, and rural development. More information about the Prize can be found on http://www.nestle.com/CSV/CSVatNestle/CsvPrize/About.htm. Nestlé will commit to the Prize winner an investment of up to CHF 500,000 for a specified period of time, to assist in the development and scale-up of the innovation.

Robert Zoellick, President of the World Bank, visited the Nestlé R&D Centre in Abidjan last week for an insight on Nestlé’s commitment to sustainability in cocoa. Accompanied by Klaus Zimmermann, Senior Vice President R&D, and Serigne Diop, Head of R&D Centre, Abidjan, Mr Zoellick observed the activities of cocoa nurseries and took part in a discussion with farmers at the Centre. Mr Zoellick was impressed that a global company like Nestlé was working with local producers to help make products of a global standard. He added that it was encouraging to see local jobs created and emphasised the importance of connecting global and local. The Centre, which was inaugurated nine months ago, focuses on improving the quality of locally-sourced raw materials, including cocoa, coffee and cassava. In addressing the problem of disease and ageing plantations affecting the West African cocoa harvest, Nestlé has transferred its propagation technology to the site in Abidjan from its R&D Centre in Tours, France. The plant science activities are part of the CHF 110 million group-wide initiative The Cocoa Plan, which was launched last October. The plan is an important and significant part of broad, collaborative efforts to improve the cocoa supply chain and the lives of cocoa farmers and communities. This includes improving the quantity and quality of yields by providing 12 million stronger productive plantlets to farmers over the next ten years and teaching farmers more efficient farming methods.

The World Economic Forum Annual meeting in Davos brought together leaders from governments, business, civil society, academia and media  to discuss the most pressing issues facing the world today. Nestle at Davos At a session on “Rebuilding Water Management”, Nestlé Chairman Peter Brabeck-Letmathe, part of a panel comprising Tsakhiagiin Elbegdorj (President of Mongolia) Ajit Gulabchand (Chairman and Managing Director, Hindustan Construction Company), Michael Mack (CEO, Syngenta), and Ajay Vashee (President, International Federation of Agricultural Producers) explored the challenges water management will face in the next 20 years, its relevance and impact on issues such as health and security, as well as how best to implement information systems tools to protect and strengthen water management. At a another panel “Global Industry Outlook: Health, Consumers, Tech and Travel”, Chairs of the WEF Governors Meetings each shared their industry's evaluation of the most important challenges and opportunities facing them in 2010. Global Industry Outlook sessions at the WEF provide an update on the state of the telecommunications, travel, health and consumer industries worldwide, map out external and internal growth factors and trend, and recommend practical solutions which will help business and government leaders collaborate most effectively in achieving this vision. Nestlé CEO Paul Bulcke presented the consumer industry’s perspective at the session. The two major issues Mr. Bulcke focused on were water security and food security. In order to increase water security, Mr. Bulcke recommended more appropriate water pricing, efficient irrigation and water use, cultivation of the right crops for the right climate, stopping of biofuel production and lastly, the need for more research in water rights trading. His recommendations to increase food security were sustainable production without western-style agricultural policies and subsidies, generation of reliable incomes for farmers through better  productivity, and added that food must be affordable and accessible and of proper “quality”. He reiterated that the private sector is part of the solution. Mr. Bulcke also outlined Nestlé’s concept of Creating Shared Value (CSV) -- the positive role of business on society. This concept is well grounded in Nestlé’s roots as its very first product, an infant cereal developed in 1866, was both a business opportunity and a response to an urgent societal need – both factors being mutually inclusive. Put simply, business can do business and do good at the same time. Stating that companies should aim to create and share value at all levels of the value chain, Mr. Bulcke added that when value is created and shared, people’s sense of responsibility, of ownership and stewardship increases. Click on Global Industry Outlook: Health, Consumers, Tech and Travel to view video of session. Successful companies can create shared value by identifying desirable outcomes for both shareholders and communities – with the right labor, human rights, development, sustainability and community policies.

A visual summary of Nestlé's commitment to creating shared value in 2009. We look forward to your comments!