Nestlé's fast-tracking of F&B prototypes

24 Mar 2020 --- Nestlé has released its Annual Report for 2019, highlighting a strong focus on fast-track innovation targeting rapidly changing consumer preferences. Competing in an increasingly digitized market, the company seeks to gain a foothold through leveraging its data, artificial intelligence (AI), automation and predictive analytics capacities. In addition, the F&B heavyweight is moving to connect with consumers in a “relevant and personalized” way, through the buildup of e-content studios.

Nestlé’s progress report for 2019 noted improvements in key operating and financial metrics. Organic growth reached 3.5 percent, in line with guidance. Profitability improved as the underlying trading operating profit (UTOP) margin increased by 60 basis points to 17.6 percent, reaching the mid-term target announced in 2017 one year ahead of plan.

In order to keep pace with fast shifting consumer preferences, the company has changed its approach to innovation. Nestlé has sought to make processes quicker with enhanced rapid prototyping and created accelerators. Last year, the company funded 50 additional fast-track innovation projects leading to product launches within six to 12 months. In its overview, it notes it has significantly reduced the average duration of these centrally-led research and innovation projects.

Within its innovation engine, digitalization is heavily leveraged by the Swiss giant. Nestlé also targets a transformation of its operations by further digitizing its supply chains and manufacturing. As an example, 100 Nestlé factories were equipped at the end of 2019 with “collaborative robots” that interact with humans in a shared space or work safely in close proximity.

Transitioning to a low-carbon economy
Nestlé holds on to its pledge to achieve zero net greenhouse gas emissions by 2050. As most of its carbon footprint relates to its sourcing of raw materials, the company has pledged to develop a series of agricultural initiatives.

The F&B heavyweight has adopted the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. The company will continue to work with others to mitigate and adapt to risks associated with climate change.

In other notable environmental highlights of the previous year, the company inaugurated its Institute of Packaging Sciences, dedicated to the discovery and development of functional, safe and environmentally-friendly packaging solutions. Nestlé deployed more sustainable packaging across its product portfolio. This included launching innovative paper packaging materials, increasing the use of recycled plastic in its water brands and introducing new bulk delivery systems. It also engaged in initiatives to support local recycling infrastructure and community-based waste management systems.

Edited by Benjamin Ferrer