Nestlé and the Dairy Industry

Nestlé’s fundamental belief is that for a company to be successful over the long term and create value for shareholders, it must also create value for society. Internationally and here in Trinidad and Tobago, Nestlé calls this Creating Shared Value (CSV), which begins with the understanding that for Nestlé to prosper over the long term, the communities the company serves, must also prosper.

In Trinidad and Tobago, Nestlé is best positioned to create shared value in three areas: Nutrition, the Environment and Agricultural Development. In the area of Nutrition for example, Nestlé partners with consumers to help them live a healthy lifestyle, not just by producing nutritious products but by educating customers about wellness. On the environment front, Nestlé is a Caribbean leader in recycling and the reduction of waste.

In the case of the Dairy Industry, Nestlé has a long history of CSV and investment, which began in 1962 when then Prime Minister, Dr. Eric Williams, asked the company to help the country build a national dairy industry.

Today, more than 50 years later, the partnership between Nestlé and dairy farmers is still going strong and Nestlé has invested millions of dollars in growing and improving the industry. In 2015 the company invested $2 million in the industry, a figure which it will match in 2016.

This investment takes the form of a targeted and effective Dairy Development Programme, which was initiated on 22 farms with an average farm size of 22 cows in 2009, and continues today. It begins with training and seminars on topics ranging from improving milk quality to animal health, as well as special bi-annual seminars highlighting farmer achievements in productivity, efficiency and sustainability, and tackling issues affecting the local industry, such as trade tariffs.

Nestlé then drills down to improve activities on the farms themselves by implementing modern, technology- driven approaches to feed and nutrition, fertility, and the health of dairy animals, while developing the entrepreneurial capacity of producers through four specific projects – each with measurable results.

These four key projects are:

1. The Forage & Feeding Project: A lack of good quality forage and affordable supplemental feed for dairy animals has led to poor farm efficiencies and limited growth of the Dairy Farm business in Trinidad and Tobago. Nestlé has helped improve the quality of forage through two projects: the Mulato Grass Project and the Supplemental Feed Project. The Mulato Grass Project, initiated in 2006, helped farmers establish new pastures with improved grass. A parallel Supplemental Feed Project undertaken in partnership with National Feed Mills, established a 16% Dairy Ration specifically for suppliers to the Nestlé Valsayn factory. Together these two projects have increased cow productivity from 7.5kg/cow per day in 2010 to 10.3kg/cow per day in 2012, while significantly reducing the amount of feed used to produce 100kg of milk from 66kg to 44kg. The result is direct on-farm savings which has increased farmers’ productivity and profitability.

1. The Fertility Project: The Nestlé Fertility Project aims to help farmers better manage the lactation and reproductive cycles of their animals. Nestlé collaborates with the School of Veterinary Medicine at the University of the West Indies to provide farmers with improved heat detection capabilities, artificial insemination, early pregnancy diagnosis and other veterinary services to ensure reproductive health and year- round sustainable milk production. These interventions have been able to reduce the average calving interval from 514 days to 476 days.

1. The Health Project: The Nestlé Health Project uses new electronic surveillance methods to monitor Sub-clinical Mastitis, which can reduce milk productivity by 10-15%. The aim of this project is to achieve a 50% reduction in the incidence of Sub-clinical Mastitis on farms in a 12- 18 month period.

1. The Farm Management Project: The Nestlé Agricultural Services Department works closely with farmers to implement improved farm management tools and techniques. The company helps farmers with data collection, analysis and feedback for short and medium- term planning. Farmers receive a detailed monthly report highlighting Key Performance Indicators over a 4-month period, which shows them the true profitability of their operations and highlights high costs and inefficiencies. Nestlé also provides the farmers with on-farm charts and tables containing detailed information on each animal. This allows the farmer to track the progress of each animal through the various stages of lactation, and ensure that reproductive health, and productivity issues are addressed immediately.

The long-term ongoing relationship between Nestlé and the Dairy farmers in Trinidad and Tobago is the definition of win-win – exactly what Creating Shared Value is intended to be. Farmers and the industry benefit from the relationship through direct and measurable savings and improved profitability and productivity, while Nestlé is assured that the highest quality milk is available for the production of its wide range of locally produced milk products.