08 Mar 20222 — Nestlé has released its 2021 Annual Report, outlining its recent developments to scale the fast-growing categories of health and crop sciences, as well as plant-based meat alternatives.
Meanwhile, the F&B giant’s Creating Shared Value and Sustainability Report – released in tandem – puts the focus on moves toward climate resilience and a “nature-positive” food system.
Sharpened geographic focus
In 2021, Nestlé sharpened its geographic focus, creating Zones North America and Greater China, effective since January 1, 2022.
“With a global, balanced and diversified portfolio, Nestlé’s decentralized structure enables agile responses to shifts in consumer needs, customer demands and supply chain challenges,” the company states.
Thirty-one of Nestlé’s brands – including Maggi, Milo and Nido – reportedly generated over CHF 1 billion (US$1.07 billion) each in annual sales at the retail level in 2021.
The company’s organic growth reached 7.5%, with real internal growth of 5.5% and pricing of 2%. Growth was supported by continued momentum in retail sales, steady recovery of out-of-home channels, increased pricing and market share gains.
Total reported sales increased by 3.3% to CHF 87.1 billion (US$93.8 billion), while foreign exchange reduced sales by 1.3%. Also, net divestitures had a negative impact of 2.9%.
Big moves in health and agri-food research
The Annual Review highlights examples in some of the company’s categories with the greatest traction. In Health Science, Nestlé developed new nutritional solutions for diabetes, cardiovascular and other medical conditions.
For example, Nutren GlucoSmart was launched in Malaysia and helps support healthy glucose levels.
In coffee, the company discovered two new varieties that produce up to 50% higher yields per tree versus standard varieties and enable an up to 30% reduction in a farm’s carbon footprint.
One of those varieties is now being grown by farmers in Latin America for use in Nescafé.
Plant-based powers on
In its plant-based segment, Nestlé continued to see market demand for meat alternatives. Following the success of Vuna since its launch in 2020, its Garden Gourmet brand introduced vegan egg and shrimp alternatives, vEGGie and Vrimp, in 2021.
While plant-based food products generated sales of around CHF 800 million (US$861.2 million) in 2021, posting 16.8% organic growth, Nestlé also expanded its dairy alternatives with pea-based, carbon-neutral Wunda.
In the same year, the FMCG titan also released a new plant-based iteration of KitKat, KitKat V.
Bolstering operations connectivity
Strong digital capabilities remain an important business growth driver, and Nestlé is continuing its focus on providing consumers with holistic online brand experiences.
The company grew its e-commerce sales by another 15.1%, increasing e-commerce’s share of total Group sales to 14.3% in 2021.
Nestlé further deployed its connected operations technology last year, with more than 100 sites now benefitting from a more connected workforce, better visibility across the entire production process and local flexibility.
In a year that saw supply chain constraints, the company was able to identify changes in demand and supply in real time and deal with issues much faster, it highlights.
Transitioning toward climate positivity
In its Creating Shared Value and Sustainability Report, Nestlé explains how it is supporting the just transition towards climate-friendly and nature-positive food systems.
The company is delivering on its climate roadmap and reports that it has passed peak carbon levels.
For the last two consecutive years, Nestlé has reduced its absolute greenhouse gas emissions, even while its business volume has grown significantly.
Specifically, it has achieved a reduction of 4 million metric tons of CO2 equivalents, for instance, by switching to renewable electricity, or encouraging the use of natural fertilizers in farming.
And it has initiated removals of 9.7 million metric tons of CO2 equivalents through nature-based solutions within its value chain.
Edited by Benjamin Ferrer
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