Business Opportunity and Social Good: Not a Zero Sum Game

How We Created Shared Value in 2016

Driving purposeful change through Creating Shared Value would not be possible without the dedication of our 51,000 employees across the U.S. Throughout our 2016 CSV report, we highlight employees whose jobs directly impact and influence the implementation of our commitment to society- the faces of Nestlé.

Creating Shared Value is not a donation strategy. It’s a fundamental guiding principle for how Nestlé does business and a strategy tool to deliver our purpose: enhancing quality of life and contributing to a healthier future. It’s based on the idea that how we operate every day can make a positive impact in the lives of individuals and families, our communities, and our planet, while achieving a positive bottom line. As the largest food and beverage company in the world, how we make our food, run our factories, and manage our supply chains can make a difference.

Today, we released our 2016 Creating Shared Value Report looking at how we’re doing on five core themes: Nutrition, Health and Wellness; Water; Environmental Sustainability; Rural Development and Responsible Sourcing; and Social Impact. In 2016, we celebrated out 150th birthday, and, just like ‘milestone birthdays’ in my life, we took it as a chance to reflect on what we learned in our first 150 years of business. To thrive in today’s business environment means we must be more nimble and innovative than ever. And our continued success will be driven by how we bring our purpose to life.

Our products reach nearly every household in the United States, with 97% of homes purchasing Nestlé brands. Here’s a few of the things we did in 2016 to make sure every one of those products helps contribute to a better world.

We listened to consumers and changed 1,830 recipes in 2016 to respond to their needs, whether to reduce sodium, remove artificial colors and flavors, or increase essential nutrients.

More and more, Americans’ tastes and preferences are changing, and we are developing new recipes and updating existing ones across our entire portfolio to keep up. With a focus on simplifying ingredient lists while maintaining the same great tastes consumers love, we are innovating products and adding more offerings with benefits our consumers are looking for such as organic ingredients, no GMO ingredients, gluten-free, high protein, more real fruit, and more vegetables. We continue to remove artificial flavors and replace artificial colors with colors from natural sources across the full portfolio. These renovations and innovations are happening across most of our popular brands.

Stouffer’s announced a commitment to simplify recipes, starting with Stouffer’s Lasagna. We’re focused on using ingredients consumers know and recognize — meaning we’ve removed carrageenan, bleached white flour, dextrose, and autolyzed yeast. We have added more real fruit and fruit juices, along with reducing sugar by an average of 11% in updated Outshine products. Gerber transitioned all formulas under its Good Start brand to no GMO ingredients, and it is the only infant formula to include probiotics in all milk-based powder formulas. We introduced Boost Simply Complete nutritional drinks. Simply Complete delivers balanced nutrition with only nine ingredients, plus a blend of 25 vitamins and minerals and no artificial flavors, colors, or sweeteners. These are only a few of the many teams working hard to create amazing products for families.

As of 2016, we’ve hired more than 1,400 employees for internships, trainee and development programs, and apprenticeships through our Project Opportunity initiative.

A core focus for us is helping communities thrive and supporting livelihoods, which encompasses everything from paid parental leave to job creation and skills training to gender balance and diversity in our workforce. We foster an inclusive culture that enables all our employees to bring their best to the workplace, which drives creativity, diversity, innovation, and — ultimately — competitive advantage in the marketplace. Apprenticeships and training programs are one major tool we use to close community skill gaps. In September 2016, Nestlé Waters North America announced that it joined with the State of Maine Department of Labor (MDOL) in its effort to increase federal grants for apprenticeships in the state. Maine is home to three bottling facilities for Poland Springs — the number-one selling spring water brand in the country — employing 850 state residents. Nestlé Waters has committed to placing 10% of its mechanic hires into its apprenticeship program by 2022; they will become eligible to earn a national Manufacturing Mechanic Certification recognized in every state. Through our PACE (Pet Advocates and Career Exploration) program in St. Louis, Nestlé Purina engaged three employment partners — St. Louis Youth Jobs, Kingdom House, and Ferguson Youth Initiative — to sponsor 18 students at pet-related job sites for eight weeks during the summer and enhance job-readiness skills.

Additionally, we’re increasing our emphasis on recruitment of military veterans, and we remain focused on matching veterans to jobs that utilize their specialized training and skill sets. Currently, Nestlé in the United States employs more than 2,400 veterans (meet a few here) across our various operating companies. In 2016, we established partnerships with Hiring our Heroes and The Mission Continues, nationwide initiatives that help veterans, transitioning service members, and military spouses find meaningful employment opportunities.

We made progress toward our goal to send zero waste to landfill: 47 of our 77 factories have achieved this milestone.

To do more with fewer resources and generate less waste, we continue to adopt more-efficient technologies and processes. Nestlé’s ambition by 2020 is to achieve zero waste for disposal, so that no factory waste goes to landfill or is incinerated without energy being recovered. In 2016, 47 Nestlé factories — 60% of our total in the U.S. — achieved zero waste to landfill status.

We also focus on efficiency in our packaging to create more recycling opportunities and minimize waste over the whole life of a product. For example, just this week, Nestlé Waters announced a $6 million impact investment in the Closed Loop Fund to support comprehensive recycling infrastructure and programs in cities across the United States.

We know that the life of a product begins far before it’s even been made-Nestlé Purina has announced a new partnership that starts at the source, investing $1 million in The Nature Conservancy’s reThink Soil initiative, a national, collaborative effort to help farmers improve soil health on croplands across the United States. Widespread adoption of soil health practices could provide unprecedented economic benefits for U.S. farmers and businesses, as well as significant conservation benefits for generations to come.

Through programs and achievements like these, Nestlé’s U.S. efforts will significantly contribute to the three overarching ambitions our global parent company, Nestlé S.A., has set out to achieve by 2030:

• Enable healthier and happier lives: this will include helping 50 million children lead healthier lives;

• Help develop thriving, resilient communities: this will include helping to improve 30 million livelihoods in communities directly connected to our business activities; and

• Steward resources for future generations: this will include striving for zero environmental impact in our operations.

Driving purposeful change would not be possible without the dedication of our 51,000 employees in the U.S. market. You can meet just a few of the thousands of employees making a difference here.

We want to be the trusted leader in our sector, and the first step is being transparent about our progress against our goals through reporting like today’s release. We are committed to responsibly embracing our size and using our reach to create shared value for individuals and families, our communities, and the planet.