Nestlé’s quest for the perfect products

The food and drink giant’s latest innovations show that speed of innovation and sustainability are sometimes hard to align. Nick Hughes reports.

As a food and drink supplier, how do you balance the need to drive long-term profitable growth with keeping sustainability front and centre of your business model?

This potential paradox kept running through my mind during a recent Nestlé virtual media briefing to present a plethora of new products recently launched in the UK & Ireland market.

We were presented with coffees, cereals, chocolate bars, meal kits, supplements and plant-based milks; all driven by consumer insights and good intentions but in certain cases with sustainability somewhat compromised by commercial imperatives.

Innovation is the lifeblood of fast moving consumer goods (FMCG) businesses such as Nestlé, but when consumer trends point squarely towards demand for greater convenience they can rub up against critical sustainability agendas such as excessive waste and packaging.

Nestlé – which is widely regarded as among the most progressive manufacturers where sustainability is concerned – provides a good example of a business trying to walk the tightrope of leading the sustainability agenda while at the same time keeping at the vanguard of market trends.

Take, for instance, the launch of Mezeast – a Middle Eastern inspired meal kit containing a falafel mix and two different sauces, each individually packaged in a non-recyclable plastic pouch. The popularity of meal kits has exploded in recent years driven by start-ups such as Hello Fresh and Gousto but the convenience-driven concept requires significant amounts of packaging versus preparing the same dish from scratch.

Honza Dusanek, managing director for food and dairy at Nestlé UK and Ireland, noted that investment in a Serbian manufacturing facility would enable Nestlé to make the packaging fully recyclable in 2022 but he was honest enough to concede “we always have to balance the speed to market and our ability to have a full solution in place. Sometimes investment takes a little bit longer before we get there”.

Paper potential

It would be unreasonable to say packaging is low down Nestlé’s agenda. The supplier presented a Smarties block packaged in 100% recyclable paper meaning the entire Smarties confectionery brand worldwide now comes in recyclable paper packaging. Nestlé explained that the move required significant investment, including adapting its existing manufacturing lines to allow for the careful handling that is required for paper.

By contrast, a new vegan KitKat (tapping into the dairy alternatives trend) along with a Yorkie Duo bar, have recently launched in flexible plastic packaging. I queried why new confectionery products are still being launched in plastic when technology allows for paper to be used instead? In response, Louise Barrett, the company’s global confectionery R&D lead, said although in theory it would be feasible to use paper, for each individual product the business would need to assess the implications for the production process and the specific barrier properties, all of which have to come together to create a bespoke solution. In other words it’s hard and potentially costly, but not impossible.

Nestlé, lest we forget, is one of a number of FMCG giants supporting a new flexible plastic fund to make flexible plastic recycling economically viable for recyclers and easier for consumers, all of which suggests that despite innovations in paper it sees a role for flexible plastics for some time to come.

Health tensions

The Yorkie Duo bar also highlighted another key tension facing suppliers: that of public health versus commercial growth. The product is essentially a Yorkie bar split into two parts with the aim of encouraging better portion control. No doubt there is sophisticated research into consumer (nudge) psychology that shows people are more inclined to share the bar with a friend, or eat half now and half later, but suffice to say that wasn’t the case for this weak-willed chocolate fan. Confectionery suppliers will surely have to think more creatively than this if they are to avoid future taxes as proposed by Henry Dimbleby in his national food strategy.

The health agenda was also a key consideration regarding another new launch. Shreddies the Simple One is a more natural version of the breakfast cereal containing just four ingredients: wheat, banana puree and date syrup for sweetness and a pinch of salt. The product forms part of a global commitment by Nestlé to simplify its ingredient lists.

Footprint has previously reported on growing scrutiny from campaign groups on the risk to health of consuming too many so-called ultra-processed foods, cereals included. In this context, we can surely expect the mantra ‘less is more’ where ingredients are concerned to feature more prominently in future NPD strategies.

Carbon questions

Carbon neutrality is another increasingly desirable product attribute. Nestlé has committed to become a net zero business by 2050 and does not allow offsetting to contribute towards its corporate ambition. It does however allow individual brands to offset their emissions in order to declare themselves net-zero ahead of the 2050 corporate target.

A new plant-based milk brand, Wunda, is a case in point. The product has been certified as carbon neutral by the Carbon Trust. Nestlé says this is achieved through several measures along the supply chain, including using renewable energy in production and reducing emissions during distribution. But it also relies on the use of “high-quality offsetting projects” for those emissions that otherwise can’t be eliminated.

Although many campaigners accept the use of offsets as a last resort, they have attracted controversy – not least because it’s difficult to know with any certainty that offsets are delivering what they promise.

In a competitive landscape where claims of carbon neutrality are proliferating it’s perhaps understandable that suppliers feel obliged to promote ‘climate-smart’ product choices in the short term while they work towards more challenging corporate environmental goals. Indeed, Nestlé believes offsets will become less necessary as it makes progress towards its corporate ambition by investing, for example, in regenerative agriculture.

Ultimately, of course, Nestlé is in the business of making products that people want to buy and presenting them in ways that make people feel good about buying them. The challenge is to find the sweet spot between what’s good for business growth and good for the health of people and the planet.

For Nestlé, and many other suppliers like it, the quest for these kind of ‘perfect’ products continues.

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