Nestle is strengthening its production capacity in Europe, investing more than SFr54 million (Eu45 million) to extend its Purina pet food factory in Hungary. The extension to the factory in the town of Buk will create about 150 new jobs by the end of 2012.

Nestle’s latest investment in the factory is part of its long-term commitment to developing its European operations. Earlier this year the company invested over SFr265 million in a new Nescafe Dolce Gusto factory in Germany, while in Switzerland it invested SFr300 million in a new Nespresso factory, creating 400 direct jobs.

The new factory extension will be equipped with four new production lines to double its manufacturing capacity of Nestle Purina pouch pet food brands such as Felix and Friskies. It also produces dry and canned Purina pet food such as Darling, Felix, Friskies and Dog Chow to meet the growing demand for the company’s pet care brands in Central and Eastern Europe.

The new factory extension aims to be operational by March 2013. It follows a SFr45 million in a factory extension in 2011 to open four new production lines and increase the number of employees to 600 people.

Nestle began manufacturing products such as Maggi in Hungary in 1974. Today it operates four factories and employs over 1,750 people. The company bought the Buk pet food factory in 1998 to produce Purina pet food products.

In Hungary, Nestle uses chocolate from the UK to make its After Eight and Kit Kat hollow chocolate products at its site in Diosgyor. Nestle coffee and powdered beverages including Nescafe and Nesquik are produced in Szerencs for export to other European markets. Nestle Aquarel and Theodora bottled mineral and spring water brands are manufactured in the village of Kekkut.

Elderly people who consume the wolfberry fruit in a milk-based formula may strengthen their ability to fight certain infections, according to a new study by Nestle. The company’s scientists in Switzerland and China investigated whether giving healthy Chinese people aged 65 to 70 a daily supplement of ‘lacto-wolfberry’ would enhance their immune response to a seasonal influenza vaccine.

The study, published in the scientific journal ‘Rejuvenation Research’, is believed to be the largest randomised controlled clinical trial to examine the effect of wolfberry supplements on the immune response of this population group. It follows earlier published research conducted by Nestle scientists into lacto-wolfberry, the company’s proprietary blend of milk protein and wolfberry.

That study, undertaken in collaboration with the Hong Kong Polytechnic University, found lacto-wolfberry enabled the fruit’s natural antioxidants to be more easily available to the body after ingestion.

Half of the 150 people who took part in the latest study were given lacto-wolfberry in a hot soup every day for three months. The other half – the control group – were given a placebo. On day 30 of the study, all participants received a seasonal influenza vaccine. Scientists measured the level of influenza-specific antibodies in each participant before and after vaccination.

The results showed that while all the participants had increased levels of influenza-specific antibodies after being vaccinated, those who had consumed lacto-wolfberry had a higher increase in antibodies than those in the control group, who had not.

“People’s natural ability to fight infection often declines as they age, as does their capacity to develop effective vaccine response,” says Dr Karine Vidal, the scientist from the Nestle Research Center in Switzerland who led the study. “Measuring someone’s ability to produce antibodies in response to vaccination is an effective way of assessing their ‘immune status.’ The outcomes of this study, as well as data from previous research, suggest dietary supplementation with lacto-wolfberry can strengthen the immune system.”

She adds: “We believe this could translate into a clinical benefit, for example a reduced rate of respiratory infections. This is especially significant for immune compromised populations, such as the elderly.”

Wolfberry, also known as ‘goji berry’, has a long tradition of use in food and in herbal medicines in many Asian countries including China. The fruit has gained attention in Europe and North Americain recent years for its reported potential health benefits and anti-ageing properties. However, there is little scientific evidence to support its effects.

Reflecting growth across all its global regions, Nestle has reported a 7.5% increase in group sales to SFr44.1 billion (Eur36.7 billion) with net profit up 8.9% to SFr4.7 billion for the first half of 2012. Organic sales growth was 6.6%, composed of real internal growth of 2.9% and pricing of 3.7%. Acquisitions, net of divestitures, contributed 2.7%.

The Swiss food and beverage group managed to offset rising input costs through savings from its Nestle Continuous Excellence programme as well as timely pricing increases. Group trading operating profit rose by 6.3% to SFr6.6 billion. The margin was 15.0%, in line with expectation that the margin performance would be second-half weighted. Nestle is continuing to invest in R&D to drive innovation, maintaining the level at 1.6% of sales.

Growth was achieved in all regions of the world. The Americas exhibited organic growth of 6.4%, Europe 2.6% and Asia, Oceania and Africa 12.6%. Nestle’s business grew 12.9% in emerging markets and 2.6% in developed markets.

Paul Bulcke (pictured), chief executive of Nestle, comments: “We continue to drive innovation globally, ranging from popularly positioned products to super premium offerings. We are continually opening new routes-to-market to reach emerging consumers, and using new media to increase both our direct engagement with consumers and our return on brand investment. This approach has delivered profitable growth in both emerging and developed markets. Our first-half top line growth and our trading operating profit margin, together with our focus on capital efficiency, allow us to reconfirm our full-year outlook.”

Nestle’s full-year outlook is for organic growth of 5% to 6%, improved margin and underlying earnings per share in constant currencies.

Nestle has inaugurated two new production sites in South Africa as part of its continued commitment to accelerating the growth of its business in the region. They will enable the company to manufacture Milo and Cheerios breakfast cereals and Maggi noodles for the first time in South Africa, sourcing the majority of ingredients and packaging materials from local farmers and suppliers.

The investment has created more than 130 permanent jobs. It also created 300 indirect jobs during the sites’ construction phase. Nestle announced in February 2011 it would invest about 400 million South African Rand (Eur40 million) in the production sites to meet the growing demand for its products.

The sites are located next to the company’s existing coffee creamer factory in the town of Babelegi in Gauteng province. Nestle is investing a further 47 million South African Rand to expand the coffee creamer factory, as well as 37 million Rand to build a new distribution centre nearby.

“We see major potential for our business in South Africa,” says Paul Bulcke, chief executive of Nestle. “It has a population of almost 50 million and a growing middle-class with increasing purchasing power. This is why we continue to invest heavily to accelerate our growth here. It is a clear illustration of our commitment to this region.”

Nestle said it was investing in Babelegi last year at the same time as announcing it would acquire soya processing company ‘Specialised Protein Products’ in Potchefstroom for 106 million South African Rand. The acquisition will help Nestle increase production of non-dairy creamers in the country, as well as developing other high quality, affordable soya-based products.

Nestle built its first factory on the African continent in South Africa in 1927. Today Nestle operates 12 production sites and four distribution centres across the country and employs 3,700 full-time, permanent staff.

In March this year the company announced a new research partnership with the government of South Africa. The partnership will offer South African scientists exposure to Nestle’s expertise in nutrition, food science and food safety, while allowing the company to better understand the nutrition needs of consumers across the African continent.

A new Nestle investment in India will increase the company’s production capacity in one of the fastest growing emerging markets worldwide. The factory extension at Nestle’s existing site in Ponda, Goa – part of the company’s 7 billion Indian Rupee (Eur100 million) investment in the state over the past three years – will produce brand favourites such as Kit Kat and Munch. It will create employment for nearly 250 people.

“We have been in India for 100 years and have factories in eight locations across the country,” says Jean-Marc Duvoisin, global head of human resources at Nestle. “Our decision to invest in a new manufacturing facility in Ponda is a clear indication that we have confidence in the region and its environment.”

In recent years Nestle has invested heavily to increase capacity, set up new factories and modernise and expand existing ones in India. This includes a new manufacturing site in Nanjangud in Karnataka producing Maggi sauces, noodles, bouillons and seasoning, and a new factory in Tahliwal, Himachal Pradesh, which will manufacture Maggi noodles as well as chocolate and confectionery products.

Nestle India’s first manufacturing facility was set up in 1961 in Moga, Punjab, to help develop milk production in the region. The company has since developed the area around the Moga factory, setting up milk collection points and training farmers to improve productivity and quality.

Nestle has reaffirmed its commitment to support more than 20,000 coffee farmer households in Vietnam. The company will continue to develop sustainable coffee farming in the country in partnership with the Vietnamese Ministry of Agriculture and Rural Development. Measures include improving coffee productivity through better farming practices and distributing high-yield, disease-resistant plantlets over the next five years.

The initiative is backed by Nestle’s global Nescafe Plan which it extended toVietnamlast year. As part of the plan Nestle looks to source 30,000 tonnes of coffee from around 16,000 Vietnamese farmers annually, helping them obtain better prices and a steady income. This is part of an approach to business Nestlé calls ‘Creating Shared Value’, which aims to create value for the company’s shareholders at the same time as for those communities where it operates.

Last year Nestle announced an investment of $270 million in a new coffee factory in Dong Nai province. It will produce products under the Nescafe brand for both local consumption and export. The first phase will begin in November 2012 and looks set to create 170 new jobs once fully operational next year.

Milk and cereal products fortified with iron and a combination of other micronutrients are more likely to help reduce iron-deficiency anaemia in children than foods fortified with iron alone, according to a new study commissioned by Nestle. Researchers from the Winterthur Institute of Health Economics in Switzerland analysed the combined results of 18 published trials involving a total of more than 5,400 children.

They found consumption of milk and cereal products fortified with iron and other micronutrients – such as zinc and vitamin A – were associated with a significant increase in the level of haemoglobin in young children’s blood. Anaemia – the state of having too few red blood cells and therefore too little haemoglobin – is commonly caused by a lack of iron in the diet.

The researchers found single iron-fortified products increased haemoglobin levels significantly more than similar non-fortified products. However, multi-micronutrient-fortified milk and cereals produced even more significant increases in haemoglobin than their single iron-fortified counterparts.

The study, published in the Bio Med Central Public Health journal, is believed to be the first analysis of the combined results of published studies examining the effect of micronutrient-fortified milk and cereals on the blood haemoglobin of children from the age of six months up to three years. The researchers identified about 1,000 potentially relevant trials from the last 45 years to pinpoint those suitable to include in the study.

Young children and pregnant women are particularly vulnerable to iron deficiency because they need higher levels of the mineral for growth. The consequences of long-term lack of iron in the diet can include impaired mental development in children, decreased physical work capacity and impaired immune function.

The researchers’ findings help to explain in biological terms why multiple, rather than single, micronutrient deficiencies are responsible for a variety of health problems.

The study was commissioned by Nestle and the Nestle Nutrition Institute. Nestle has more than 140 years’ experience in improving the micronutrient profile of food products through fortification. The company’s first fortified product was an iron-enriched version of its founder Henri Nestle’s original infant cereal ‘Farine Lactee’, launched in 1867.

Today, Nestle offers a range of products around the world fortified with micronutrients including iron and vitamin A. The company’s dairy business makes fortified, affordable milks available in more than 80 countries around the world, where they are largely consumed by pre-school children.

A non-profit organisation based in Switzerland, the Nestle Nutrition Institute is committed to fostering ‘science for better nutrition’, by sharing scientific information and educational materials with health professionals, scientists and nutrition communities in an interactive way.

Nestle is using zero gravity research to develop its understanding of the foam technology used in its products. The study could help Nestle scientists create better air bubbles in chocolate, coffee, dairy and pet food.

Scientists at the Nestle Research Center in Switzerland are working with the European Space Agency (ESA) on foam experiments designed to produce the ‘perfect’ bubble. Bubbles are added to products, like chocolate mousse and coffee froth, to make the right texture or consistency. The company recently conducted zero gravity research on ‘parabolic’ flights with the European Space Agency and a team of international foam research scientists.

Before the flights, Nestle scientists placed six 5ml samples of water and milk protein in a special machine that analyses the structure of foam, carried on board the European Space Agency sponsored A300 airbus plane. Flying at a maximum height of 28,000 ft (8,500m), the plane made about 30 ‘parabolas’, or up-and-down dips, creating weightlessness inside the fuselage in short bursts.

The stability of the bubbles determines the shelf-life of a number of products and is key to the consumer’s taste experience.

“We want to make a near to ‘perfect’ bubble in order to achieve the right balance for different products in our range – not too big, not too small,” says Dr Cecile Gehin-Delval, a scientist at the Nestle Research Center. “Stable foam in chocolate mousse gives the feeling of creaminess in the mouth. To make fine coffee froth, we want to create stable little bubbles to make it light and creamy.”

Foam is easier to study under zero gravity conditions because weightlessness causes bubbles to be evenly dispersed rather than floating to the top. Nestle has been following ESA’s activities in this field for over a decade. This is now the first time Nestle is conducting foam experiments in zero gravity conditions.

“Gaining a better understanding of foam may help improve the texture of our products,” she adds.

ESA conducts experiments in physical and life sciences, human physiology including nutrition and biology, environmental sciences and research on the International Space Station (ISS). Nestle will now be able to use a foaming device on the ISS which was developed by the European Space Agency to study foam in zero gravity for a longer period of time.

Nestle was the first food and beverage company to use space research starting in the late 1980s. Nestle scientists studied the mechanism of the effect of muscle loss in astronauts on a multinational flight with a German space lab in 1993 to help improve Nestle healthcare products.

Nestle and its partners will involve communities in Cote d’Ivoire in a new effort to prevent the use of child labour in cocoa-growing areas by raising awareness and training people to identify children at risk, and to intervene where there is a problem. The initiative is part of an action plan drawn up by Nestle in response to a report on the company’s cocoa supply chain in the West African country by the Fair Labor Association (FLA). It builds upon existing efforts to develop a more sustainable cocoa supply through the Nestle Cocoa Plan.

“The use of child labour in our cocoa supply chain goes against everything we stand for. As the FLA report makes clear, no company sourcing cocoa from Cote d’Ivoire can guarantee that it doesn’t happen, but what we can say is that tackling child labour is a top priority for our company,” says Jose Lopez, Nestle’s executive vice president for operations.

The FLA concluded that, with some adjustments and improvements, the Nestle Cocoa Plan can become a well-rounded developmental programme. The plan, along with the other initiatives Nestle participates in, provides the building blocks for a more robust and deep reaching effort, the FLA experts say in their report.

They found that child labour is a reality on cocoa farms in Cote d’Ivoire and has its roots in a combination of factors including poverty and the socio-economic situation of the farmers and their families. The report says an effective strategy to eliminate the problem must start by tackling the attitudes and perceptions of those in the cocoa supply chain and the communities in which they live.

Nestle does not own or operate farms in Côte d’Ivoire, but is well positioned to make a positive impact on the livelihoods of workers in the cocoa supply chain, the FLA says, due to its leverage with its suppliers and the volume of cocoa beans it procures. The FLA made 11 recommendations to Nestle, all of which the company fully supports and is acting upon, in some cases in collaboration with its partners.

Nestle welcomes the FLA’s finding that its ‘Cocoa Plan’ lays the foundations for strengthening and mounting further efforts to achieve its ambition of cocoa supply chains free from child labour. The Nestle Cocoa Plan aims to enable farmers to run profitable farms, to eliminate the use of child labour on those farms and to ensure a sustainable supply of cocoa.

It is designed to create value throughout the supply chain, particularly for the farmers and their families, but also for the company’s shareholders, an approach Nestle calls Creating Shared Value.

The company believes that improving and scaling up the ‘Nestle Cocoa Plan’ will help ensure there is a sustainable flow of cocoa to Nestle from Côte d’Ivoire. Nestle has pledged to source 10% of its global cocoa supply this year from farmers covered by the Nestle Cocoa Plan. It plans to scale this up to 15% in 2013.

More than 6,000 cocoa farmers in Cote d’Ivoire have received training in 2012 as part of the plan. Over 800,000 better quality cocoa plants have been distributed to them. By 2015 Nestle aims to train a further 24,000 farmers in the country, and deliver a further three million plantlets.

In March the company opened the first school it has built for a Nestle Cocoa Plan co-operative. Over the next four years, Nestle, with its partner the World Cocoa Foundation, plans to build or refurbish 40 schools for other communities that have been identified as in need.

Nestle has joined scientific and public health experts in calling for the creation of more community-based programmes to prevent childhood obesity. The company is taking part in the Global Obesity Forum in New York to discuss evidence suggesting multi-stakeholder collaborations promoting healthy nutrition and physical activity are among the most successful ways to address the issue.

The event aims to provide international stakeholders committed to the prevention of childhood obesity with an important opportunity to share knowledge and best practices. It is the first major forum organised by the EPODE International Network (EIN), the world’s largest obesity prevention network.

All members of the EIN – which connects community-based obesity prevention programmes in 25 countries including Australia, Brazil, Chile and Poland – will be represented at the forum. The network’s goal is to support 40 large-scale community-based programmes on five continents by 2015.

“Childhood obesity is a complex problem driven by multiple social, economic and environmental factors,” says Janet Voute, Nestle’s global head of public affairs. “If we are to tackle this major public health issue effectively we need a multi-sector response and Nestle firmly believes industry has a vital role to play in this.”

She continues: “We are convinced the best way to leverage our capabilities and expertise is by working in partnership with other organisations to help promote healthy nutrition and physical activity through community-based programmes.”

Government officials from a number of countries will attend the forum, along with representatives from leading institutions including the United States’ Center for Disease Control and Prevention and the Trust forAmerica’s Health. Experts from a variety of fields including genetics, behavioural science, economics, and politics will also participate.

Nestle has completed a Eur6 million investment in new manufacturing lines at its condensed milk products factory in Pontecesures, Spain, increasing production by 50%. The exansion follows two major financial commitments Nestle has made to develop its manufacturing operations inEurope this year.

Nestle recently announced it would invest SFr300 million (Eur250 million) in a new Nespresso factory in Switzerland. In February it revealed plans to invest SFr265 million in a new Nescafe Dolce Gusto factory in Germany.

The company’s investment in Pontecesures is the third it has made in Spain in the last 18 months, reflecting its belief in its Spanish operations despite the country’s challenging economic situation. Almost half of the Pontecesures factory’s production is exported to countries in Europe, Asia and Africa. The investment has boosted exports by 12%.

The factory now has eight production lines, allowing it to manufacture condensed milk products in a variety of different formats. In November Nestle invested Eur10 million to produce different varieties of chocolate at its factory in La Penilla de Cayon. This followed a SFr64 million investment to boost production at its Nescafe Dolce Gusto factory in Girona in March 2011.

Nestle Spainemploys almost 6,000 people. It had a turnover of more than Eur2 billion in 2011. Nestle’s factory in Pontecesures uses fresh milk supplied by more than 260 farms in the local province of Galicia. Today, Nestle has 12 manufacturing sites in Spain. About 40% of its total production is exported, mainly to other countries in Europe.

Although the global functional foods market continues to expand in size, growth rates in parts of the world have dipped over the last couple of years, especially compared with the last decade, according to Leatherhead Food Research. Much of this has largely been for economic reasons caused by the global downturn, with premium-priced functional products carrying less appeal for price-conscious shoppers. Certain parts of the market also appear to be approaching maturity, whilst the industry also faces ongoing competition from food and drinks positioned on a more general wellness platform.

In spite of this, levels of corporate and new product activity remain high within the global functional foods industry. Many of the world’s leading food groups have been keen to expand their presence in market sectors such as functional dairy products, soya-based and lactose-free foods and sports and energy drinks. Indeed, health remains a major driver of corporate strategy in most parts of the world, with manufacturers also reformulating their food and drinks to improve their nutritional qualities.

From a supply perspective, the industry is still largely dominated by many of the world’s leading food groups. For many of these companies, functional foods form a small but significant part of their overall product range, having made some of the greatest contributions to recent growth in sales and profits during the last decade, on the back of the global trend towards healthier diets. Partly as a result of this, large-scale mergers and acquisitions continue to take place within the industry, one recent example of which was Nestlé’s $11.85 billion purchase of Pfizer Nutrition.

‘Key Players in the Global Functional Foods Industry’ is a new publication from Leatherhead Food Research, which updates a report last published in 2005. The report provides in-depth profiles of more than 30 of the world’s leading suppliers of functional foods, as well as providing an overview of the world market for functional foods, detailing market size and growth rates, as well as NPD figures and recent corporate activity. Companies profiled in the report include leading food groups such as PepsiCo, Unilever, The Coca-Cola Company, Groupe Danone, Kellogg and General Mills.

For further information, contact Leatherhead Food Research on telephone +44 (0)1372 822376 or by e-mail: publications@leatherheadfood.com.

Nestle Purina Petcare is continuing to invest in expanding its manufacturing sites globally. Having spent SFr45 million (Eur37.5 million) last July to exptend its factory in Hungary followed by SFr38 million in its factory in Russia, the global pet food business is now investing more than SFr29 million to expand its factory in New South Wales, Australia.

The investment programme will make the Australian factory one of the most technologically advanced of its kind in the world when work is completed at the end of this year. It includes the installation of new technology and the construction of a 5,400 sq m warehouse on the site.

The factory currently produces around 100,000 tonnes of products a year for domestic consumption and export. These include well-known dog and cat food brands such as Beneful, Pro Plan and Friskies.

Nestle Purina is one of the world’s largest pet food companies, with global sales of more than SFr13 billion in 2010.

Nestle is building on its commitment to help support the development of the global dairy industry with a new partnership in Morocco. The collaboration with the local authorities in the Moroccan region of Doukkala-Abda aims to increase milk production, improve the quality of fresh milk and encourage the development of the dairy industry throughout the private sector.

The Doukkala-Abda region currently produces 22% of the milk in Morocco, sourcing over 340 million litres a year. Nestle’s partnership with the Agency for Agricultural Development and the Regional Office of Agriculture seeks to increase the company’s own milk collection in the region by 10% by 2014.

Nestle will invest more than SFr5.3 million (50 million Moroccan Dirham) over the next three years. It will help more than 10,000 farmers by providing training and expertise in milk supply, technical equipment, management and finance. Nestle began its operations in the Moroccan dairy sector in 1992. Today Nestle sources about 73 million litres of fresh milk from over 16,000 dairy farmers in the country.

Nestle’s work with farmers inMorocco is part of its approach to business which it calls Creating Shared Value. The company aims to create value for its shareholders while at the same time creating value for the communities it serves and in which it operates. Rural development is one of Nestle’s three key CSV focus areas, as well as nutrition and water.

Nestle’s new partnership in Morocco is the latest in a long-line of investments it has made to support the development of the global dairy industry. The company invested SFr127 million in a new milk products factory in Chile and opened a UHT milk factory in Sri Lanka in April. It also announced the construction of a dairy farming institute in China in January, and joined a dairy partnership in Brazil at the end of last year.

Nestle is strengthening its premium portioned coffee brand Nespresso by investing SFr300 million (Eur250 million) to meet growing consumer demand worldwide. The company is to build a new factory in Romont in the Swiss canton of Fribourg to increase coffee capsule production.

Nespresso’s third production site will boost employment in the region, creating 400 new direct jobs in the long term. It is the latest multi-million Swiss Franc investment that Nestle has made in Nespresso in the last three years. SFr300 million was invested to build Nespresso’s second production and distribution centre in Avenches,Switzerland, in 2009.

“Some 25 years after creating the portioned coffee segment, the third Nespresso production centre will provide the capacity needed to sustain growth in Europe and develop our brand globally,” says Patrice Bula, executive vice president for Nestle, responsible for the Strategic Business Units, Marketing, Sales and Nespresso.

Construction of the factory is due to begin before the end of the year. It will be operational by 2015. The factory will be one of three Nespresso production sites in Switzerland. In addition to Avenches, Nestle opened its first Nespresso production centre in Orbe.

Nespresso has continued to grow since it was launched by Nestle over a quarter of a century ago. Last year, Nespresso achieved sales of more than SFr3 billion and growth of about 20%. Strengthening its capabilities in emerging and developed markets, it has recently opened boutiques in Dohain the state of Qatar, Seoul in South Korea and Innsbruck in Austria. There will be over 300 Nespresso boutiques worldwide by the end of 2012.

As part of Nestle’s continued effort to construct more environmentally friendly buildings worldwide, the new factory in Romont will use renewable energy produced by its coffee roasting technology to heat the building.

Nestle Professional, the Nestle business that supplies the food and beverage service out-of-home industry, is helping to educate future chefs about nutrition through a new online course in the United Kingdom and Ireland. As part of its global commitment to nutrition, health and wellness, the company has created the interactive programme ‘Toque d’Or NHW’. It aims to help catering college students learn about healthy eating and drinking, energy and nutrients, nutrition needs, and diets and lifestyle.

Launched in partnership with the British Nutrition Foundation, the course also aims to help students to understand food labelling and health in catering. “Providing catering students with the necessary skills and information related to food and nutrition will ensure that they are better engaged with public health initiatives – from calorie labelling to sourcing of ingredients,” says Roy Ballam, education programme manager at the British Nutrition Foundation.

The course is available online until July 2012. A British Nutrition Foundation endorsed certificate will be awarded to those who pass. This recognises the completion of a basic qualification in nutrition, health and wellness. The course will be reviewed in July with an aim to launch it to the wider food service industry.

 “There’s no escaping the fundamental need for everyone working in the industry to have at the very least a basic understanding of nutrition, health and wellness,” says Neil Stephens, country business manager of Nestle Professional in the UK and Ireland. “The healthy eating trend has been gaining momentum over recent years. Nestle Professional is committed to encouraging the development of students’ skills in this area.”

Globally, Nestle Professional is present in more than 90 countries – with over 10,000 employees, including a large number of skilled chefs. Nestle Professional sources from 171 Nestle factories worldwide and operates 15 dedicated food service factories, a number of specialist culinary centres, and a beverage centre located in Orbe, Switzerland.

Nestle is joining a new research partnership between industry and academia that aims to improve the environmental performance of consumer products and services. The company is the only global food and beverage manufacturer to join the ‘International Chair in Life Cycle Assessment’ unit at the Interuniversity Research Centre for the Life Cycle of Products, Processes and Services (CIRAIG) in Montreal, Canada.

Life cycle assessment is the most widely used scientific methodology for assessing products’ overall environmental impact. CIRAIG is one of the largest research centres of its kind in the world. It generates new life cycle assessment knowledge, methods and tools, and shares these with its industry partners. Nestle is supporting its work with an investment of C$500,000 (Eur382,000).

Life cycle assessments measure a product’s environmental impacts across the entire value chain: from ingredient sourcing to processing and manufacturing, its use by consumers and how its packaging is disposed of or reused. Nestle’s approach to using life cycle assessments in all its product categories has enabled it to systematically improve the environmental performance of many of its popular products and systems.

“This partnership will help us expand our knowledge of life cycle assessments,” said Nestle scientist Urs Schenker. “We use them when developing products to measure areas of environmental impacts, for example water use in agriculture, CO2 emissions in manufacture, and the amount of energy used in distribution.”

He adds: “The partnership will also help us to provide consumers with improved information about our products’ environmental performance, helping them make more informed decisions about what they buy. Online graphics such as the ones created by our Nescafe brand can help people understand the life cycle concept in an interesting and accessible way.”

In a strategic move to enhance its position in global infant nutrition, Nestle has agreed to acquire Pfizer Nutrition for $11.85 billion (Eur9.01 billion). Nestle estimates Pfizer Nutrition’s 2012 sales at $2.4 billion, with 85% generated in emerging markets, many of them with large, fast-growing populations. The acquisition is subject to regulatory approval.

Infant nutrition is a high-value, science-led category. Pfizer Nutrition complements Nestle’s existing portfolio with strong brands in key segments and geographies. It will enhance Nestle’s infant nutrition business allowing it to combine well-known brands like S-26 Gold, SMA and Promil with the existing portfolio of trusted and successful brands such as Nan, Gerber, Lactogen, Nestogen and Cerelac infant cereal.

Paul Bulcke, chief executive of Nestle comments: “Infant nutrition has been at the heart of our company since it was founded in 1866. Pfizer Nutrition is an excellent strategic fit and this acquisition underlines our commitment to be the world’s leading nutrition, health and wellness company. Its strong brands and product portfolio, its talented people dedicated to the success of its business, together with its geographic presence – 85% of its sales are in emerging markets – will complement our existing infant nutrition business perfectly. The combined entities will enable us to deepen our engagement with consumers, offering them a wider choice of nutritious food to ensure their children make a healthy start to a healthy life.”

Pharmaceutical giant Pfizer is reported to be close to selling its $1.9 billion annual turnover infant nutrition business to Nestle for between $9 billion and $10 billion. With roughly 80% of its sales generated in high growth emerging markets and 60% in Asia, Pfizer’s infant nutrition business is an attractive acquisition target for the other major players within the infant formula industry. Asia accounts for about 45% of the world milk formula market and the region also accounts for over half of the births in the world.

Nestle is believed to have beaten rivals Danone and Mead Johnson to the prize.

Consumers worldwide can enjoy a new premium Nescafe that uses a blend of soluble and finely ground micro-granulated coffee designed to meet specific tastes in individual countries. This month it has been launched in Brazil as Nescafe Duo Grao.

It was first launched to Japanese consumers as a luxury coffee called Nescafe Koumibaisen last year. In the United Kingdom, it was launched as Nescafe Azera, and as Nescafe Molienda in Mexico. The product aims to reach more consumers in more countries this year.

Nescafe asked researchers at the Nestle Product Technology Centre in Orbe, Switzerland, to help them understand how to match its coffee to consumers’ taste preferences and habits. The researchers found out that consumers in Mexico do not like bitter coffee, but prefer a smoother taste. The Japanese like their coffee stronger and rich in aroma, while the British like a well-balanced coffee taste. Brazilians prefer their coffee with a smooth but aromatic taste.

“From Brazil to J apan, we discovered that consumers have really diverse tastes,” explains Michael Briner of the beverage strategic business unit at Nestle. “Lifestyle, consumption and daily patterns all made a difference so we used our coffee expertise and know-how to tailor the product to each country.”

Nescafe selected a blend of Arabica and Robusta coffee beans to achieve specific tastes, choosing beans that provided a smoother or more bitter taste. The beans are either lightly or deeply roasted to determine the different aromas. The roasted beans are then ground down to micro-granules and blended together with soluble coffee to provide a unique and specifically crafted cup of coffee.

Nestle is partnering with the International Osteoporosis Foundation (IOF) to help make consumers more aware of what can be done to prevent Osteoporosis. It is a disease in which bones become fragile, weak and prone to fractures, and is a growing problem in both emerging and developed countries.

Recent statistics released by the IOF showed that osteoporosis affects about one in three women over the age of 50, with over 200 million women affected worldwide. It also affects men, as one in five over the age of 50 is at risk of an osteoporotic fracture.

“The new partnership aims to help increase awareness about the ‘silent epidemic’ of osteoporosis,” says Emma Jacquier, Nutrition and Science Manager for the Dairy Strategic Business Unit at Nestle. “Staying in good health at a low cost is becoming vitally important for the public, governments and businesses as the world’s population ages.”

Nestle’s partnership with the IOF will highlight ways in which consumers can protect themselves from the disease. “Eating the right foods and staying physically active are important in order to age healthily,” explains Patrice McKenney, chief executive of the IOF. “People of all ages can help promote good bone and muscle health by ensuring that they have a healthy diet rich in calcium and protein, enough vitamin D and taking regular weight-bearing exercise.”

Activities have begun in Argentina, Brazil, China, Indonesia and the Philippines. Nestle is offering people bone-health checks and access to expert advice on health and nutrition in supermarkets and stores. Other activities and initiatives will be organised to highlight World Osteoporosis Day in October.

The partnership is Nestle’s latest commitment to raise awareness about osteoporosis. Last year the company led a study on vitamin D deficiency in office workers in Australia. Vitamin D is produced naturally by the body through exposure to the sun’s ultraviolet rays. Deficiency in this vitamin puts them at greater risk of osteoporosis, muscle weakness and can be implicated in some other chronic diseases. Research revealed that one in three workers had a deficiency in this essential micronutrient during the summer.

Nestle has invested more than SFr127 million ($140 million) in a new factory in Chile as part of its continued commitment to developing its operations in the country. The factory will produce a range of milk products and ingredients with added nutritional value for domestic consumption and for export to the United States, Central America, the Middle East and Asia.

When fully operational, the factory will have a production capacity of 30,000 tonnes of milk powder, enabling Nestle to meet increased demand for dairy products that offer a nutritional ‘plus’. One of the most technologically advanced dairy factories of its kind in the world, it will provide 300 direct jobs and 1,500 indirect jobs.

As with Nestle’s other dairy factories around the world, the new manufacturing site is situated in a rural area close to the dairy farms that supply it with fresh milk. This not only enables Nestle to trade directly with farmers, but also to provide them with technical assistance and training to improve milk production and quality.

In Chile, Nestle sells a range of local brands including Savory ice cream, Sahne-Nuss chocolate and McKay biscuits, alongside internationally recognised brands such as Nescafe and Maggi. In 2010 the company opened its first Research and Development Centre in South America in the Chilean capital Santiago. The centre leads Nestle’s global research and development efforts for biscuits and cereal-based snacks.

Eating a moderate amount of dark chocolate every day can help reduce the hormones in your body that make you feel stressed, according to a Nestle study. Scientists from the Nestle Research Center (NRC) in Switzerland examined the biochemical basis for chocolate’s reputation as a comfort food. Their research revealed that the chemical compounds contained in dark chocolate may improve the disposition of people who experience higher levels of stress.

The Nestle study into dark chocolate’s effect on stress monitored 30 healthy adults for two weeks. Every day each participant was given 40g of dark chocolate – about four squares of a large bar. They consumed half the chocolate in the morning and the other half in the afternoon.

Those participants who recorded higher levels of stress at the beginning of the study experienced a reduction in the chemical reactions in their bodies associated with stress. The results showed the level of stress-related hormones reduced in all participants, including those who were not assessed as stressed at the start.

“When you are stressed your body’s chemistry becomes unbalanced,” explains Nestle scientist Dr Sunil Kochhar, who led the study. “In the long term this can be harmful to your health. We have found that eating a moderate amount of dark chocolate on a daily basis can help to balance the body chemistry of people who are stressed. It is possible to speculate that making dark chocolate part of a healthy balanced diet might lead to a chemical composition in the body that is better able to handle stress.”

The dark chocolate used in the study was made of up to 75% cocoa solids. These are rich in chemical compounds that affect your metabolism, the chemical reactions that happen in your cells.

“Anxiety and stress can have considerable effects on people’s wellbeing, causing a variety of physical and emotional conditions, and sometimes leading to more serious health concerns,” Dr Kochhar continues. “These results strongly support our ongoing research efforts to establish the impact of certain food ingredients on human metabolism, and how they affect our health.”

The study, published in the Journal of Proteome Research, is one of several conducted by the Nestle Research Center into the emerging health benefits of dark chocolate. Nestle scientists collaborated with experts from BASF, the world’s leading chemical company, and Berlin-based scientific organisation Metanomics on an earlier study. This examined the effects on microorganisms in the human gut associated with eating dark chocolate regularly.

The NRC has also collaborated with Loughborough University, a leading sports science institute in the UK, to investigate the use of dark chocolate as an effective snack alternative for active people.

Nestle is strengthening its dairy industry interests in Asia with the opening of a new UHT milk factory in Sri Lanka. The factory builds on the company’s recent investments in dairy development in China and India. It will produce ready-to-drink brands such as Milo and Nespray at Nestle’s existing manufacturing site in the Sri Lankan province of Kurunegala.

“Our latest investment will have a ripple effect across the local community by helping our company make a positive impact on thousands of suppliers and farmers in the country,” says Alois Hofbauer, managing director of Nestle Lanka. “The new manufacturing capabilities also mean we can produce new products for our Sri Lankan consumers.”

The SFr5.8 million factory is part of a SFr77 million (Eur64 million) total investment in Sri Lanka over the next few years. Two other factories producing Maggi noodles and Nestle brand malt beverages were opened on the site in the last 12 months.

Nestle has supported the Sri Lankan dairy sector since the 1980s. Today Nestle Lanka’s has three UHT milk factories. Nestle isSri Lanka’s single largest private sector collector of fresh milk, procuring fresh milk from over 15,000 local dairy farmers every day.

The new UHT milk factory is part of Nestle’s dairy investment programme in Asia. The company constructed a new dairy farming institute in Shuangcheng in Heilongjiang province, China, in January.

Nestle India has developed milk production in the region since it built its first factory in Moga in 1961. The company now has eight factories in the country. Over the years, Nestle has invested to develop the area around that first factory, setting up milk collection points and training farmers to improve productivity and quality.

Nestle is using the same specialised technology avalanche experts use to study snow to improve the quality of its ice cream. The company’s scientists are working with the Institute for Snow and Avalanche Research in Switzerland (SLF) to examine the microscopic ice crystals found in both snow and ice cream.

Their research relies on the only x-ray tomography machine in the world that allows long-term observation of tiny particles in a substance at temperatures of zero to minus 20 degrees Celsius. Experts at the SLF monitor the evolution of ice crystals in snow and how this affects its properties: key factors for understanding avalanche formation.

Ice crystals affect the properties of ice cream in a similar way, altering its texture and structure as they grow and change shape. The collaboration aims to help Nestle to solve a universal problem for all ice cream manufacturers: how to maintain the product’s original texture and structure for longer.

“Ice cream is an inherently unstable substance,” says Dr Hans Jorg Limbach, a scientist at the Nestle Research Center in Switzerland. “As part of its natural ageing process, the ice will separate from the original ingredients such as cream and sugar. When you store ice cream in the freezer at home for a prolonged period, you will eventually see ice crystals begin to form in the product. This is water from the ice cream itself.”

Across the ice cream industry, consumer feedback about boxed ice cream that is stored in the freezer often relates to its texture and appearance.

Nestle is strengthening its e-commerce offering in Europe, giving consumers a new way to buy customised chocolates in Spain. Díselo con Chocolate, or ‘Say it with Chocolate’, builds on experience from other Nestle e-commerce innovations Maison Cailler, BabyNes and Nespresso.

Consumers can use the new Spanish website to choose their own personalised selection of Nestle Caja Roja praline chocolates. They can further customise their purchase by picking their preferred packaging, choosing designs for inside and outside the box, and deciding on gift wrapping. The praline chocolates are delivered to the consumer within 72 hours.

“Innovation is a priority for Nestle,” says Bernard Meunier, chief executive of Nestle Spain. “The Díselo con Chocolate initiative illustrates the potential of a growing consumer trend towards customisation and buying products and services online. It is something that is unique and exclusive for Spanish customers.”

Díselo con Chocolate is the latest boost to Nestle’s e-commerce business in Europe. The company’s luxury chocolate brand Maison Cailler launched in Switzerland and Liechenstein in January. This is a unique profiling system that consumers can use to discover their ‘chocolate personality’ and share the result with their friends online.

Last year Nestle launched BabyNes in Switzerland, the world’s first comprehensive nutrition system for infants and toddlers. Customers can use its website to track their baby’s growth and changing nutritional needs, choose the right product type, order capsules or source information professional nutritionists. BabyNes offers 24-hour customer service via the website or its customer service hotline.

Nespresso, the company’s premium portioned coffee brand, has operated a highly successful online business model since 1998. Consumers can buy capsules, machines and accessories at www.nespresso.com. Over a decade later Nespresso launched an app for its Club Members. They can read up on Nespresso news, search for their nearest boutique or stockist, and in certain European countries, locate recycling points for used capsules.

Nestle is strengthening its global research programme by expanding its research and development centre in Singapore. The centre, which serves fast-growing markets in the Asia-Pacific region, leads Nestle’s expertise in micronutrient fortification and Popularly Positioned Products (PPPs). PPPs are food and beverages that provide nutritional value at an affordable cost, in an appropriate size, for lower income consumers.

Those developed by the company’s experts in Singapore include Maggi Masala-ae-Magic, a spice mix for consumers in India fortified with iron, iodine, and vitamin A, and iron-fortified Maggi Sajian Leluarga noodles for families in Malaysia.

Nestle’s investment of almost SFr4 million (Eur3.3 million)) in the centre will support product development in a number of categories including culinary, malt beverages and coffee mixes.

Nestle’s research and development centre in Singapore is part of the company’s global network of 32 R&D centres. Its success led the company to establish two other R&D centres in Asia: in Shanghai in 2001 and in Beijing in 2008. Products developed in Singapore are sold in 16 countries including India, Indonesia, Malaysia and Japan.

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Nestle is entering into a new research partnership with the government of South Africa which it is hoped will contribute to the scientific development of the country and the continent as a whole. The arrangement will offer South African scientists exposure to Nestle’s extensive research capabilities, in particular the company’s expertise in nutrition, food science and food safety.

It will also allow Nestle to better understand the nutrition needs of consumers in South Africa, and accelerate the development of products with an improved nutrition profile at the right price for consumers in emerging markets. The partnership with South African scientists is being coordinated by the Council for Scientific and Industrial Research (CSIR), part of the government’s Department for Science and Technology (DST).

“We are delighted to have this opportunity to fund future research projects at the CSIR and to share expertise with the South African scientific community,” says Nandu Nandkishore, Nestle’s executive vice president and head of Zone Africa, Oceania, Asia and the Middle East. “We expect the collaboration will help to provide the scientific basis for sound nutrition and food safety policies, as well as identify research needs for science-based regulations on food, nutrition and health.”

Some of the researchers taking part in the partnership will study how locally sourced ingredients can be used to create foods that provide health benefits. Part of Nestle’s global research and development effort is directed towards discovering new bioactive ingredients. Researchers also test how well these ingredients target different tissues in the body once ingested, as well as their effectiveness in helping to promote health.

Nestle is strengthening one of its fastest growing businesses in Europe with a Eur220 million (over SFr265 million) investment in building a new Nescafe Dolce Gusto factory in Germany, the largest market for the brand worldwide. Nescafe Dolce Gusto is Nestle’s machine and capsule ‘coffee shop experience-at-home’ system for both hot and cold drinks. It offers nearly 30 coffee, Nesquik and Nestea varieties.

The factory, located in Schwerin, will create 450 jobs. With 12 new production lines, it will become operational by the end of 2013. Located about 100 km from Hamburg, the biggest European port for coffee imports, the factory aims to produce about two billion coffee capsules a year for export to the rest of Germany, Eastern Europe and Scandinavia.

“This is one of our biggest investments in Europe and highlights our continuous investment in our capacity for innovation,” says Laurent Freixe, Nestle’s zone director for Europe. “Nescafe Dolce Gusto is the leader in the portioned coffee market in 20 countries. With a growth rate of over 50%, it is one of the fastest growing businesses for Nestle inEurope.”

The Schwerin site is the company’s third Nescafe Dolce Gusto factory. Last year, Nestle invested SFr64 million in the Nescafe Dolce Gusto site at its Nescafe factory in Girona, near Barcelona, Spain.

The company’s first Nescafe Dolce Gusto factory, which opened in 2006 in Tutbury in the United Kingdom, is already running at full capacity. Last year Nestle invested £110 million in the site to triple production.

The Schwerin factory is Nestle’s latest investment in Germany– the company’s fourth largest market globally.

Nestle has gone on the road in Central and West Africa to provide nutrition expertise and healthy eating tips to consumers. Maggi brand ‘Cooking Caravans’ are travelling through Cameroon, Cote d’Ivoire and Nigeria to educate people about balanced diets, micronutrient deficiency and the importance of culinary hygiene. The programme also aims to encourage cooking at home.

There are five caravans on the road staffed by a team of up to ten Maggi employees and contractors. They travel to towns and cities week-by-week promoting activities tailored to each country. These include interactive cooking demonstrations, women’s forums, group discussions, and presentations on micronutrient fortification.

“The Cooking Caravan is our channel to connect with our consumers face-to-face,” says Maarten Geraets, business executive manager for Maggi in the Central and West Africa region. “We hope it will reinforce the idea that Maggi is a brand they can trust.”

Maggi makes a wide range of products including bouillons and seasonings in West Africa. Nestle fortifies most of the range to help address the four most prominent micronutrient deficiencies worldwide: iron, vitamin A, iodine and zinc. Over a third of people living in developing countries are affected by such deficiencies, according to recent statistics by the United Nation’s Food and Agriculture Organization.

Reflecting growth in both emerging markets and developed markets, Nestle increased net profit by 8.1% on a continuing basis to SFr9.5 billion (Eur7.8 billion) for 2011 on sales of SFr83.6 billion exhibiting organic growth of 7.5% and 3.9% real internal growth. Trading operating profit was SFr12.5 billion and the margin advanced 60 basis points (90 basis points in constant currencies) to 15.0%.

Nestle continued to grow in all regions of the world, with 5.0% organic growth in Europe, 6.4% in the Americas and 13.1% in Asia, Oceania and Africa. The business grew 13.3% in emerging markets and 4.3% in developed markets.

Paul Bulcke, chief executive of Nestle, comments: “We delivered good performance, top and bottom line, in both emerging and developed markets in 2011. It was a challenging year, and we do not expect 2012 to be any easier.”

During 2011, Nestle continued to invest in innovation and platforms for growth including new partnerships in China with Yinlu and Hsu Fu Chi, and the formation of Nestle Health Science and the Nestle Institute of Health Sciences, which both had a good start in their first year of operation.

“Our innovation is creating opportunities in all categories, whether bringing new consumers to our brands in emerging markets, or building on our consumers’ engagement with our brands in the developed world,” says Paul Bulcke.

Nestle achieved growth in Western and Central/Eastern Europe with sales up 4% organically to SFr15.2 billion and real internal growth of 1.8%. Trading operating profit margin improved by 230 basis points to 15.6%.

In Western Europe all markets overcame tough economic conditions to deliver real internal growth. Portugal, Italy, Greece and Spain collectively achieved 3.7% organic growth.France, the Benelux countries and Great Britain did well. All Nestle’s key categories grew with soluble coffee, chilled culinary, frozen pizza and petcare among the highlights.

In Central and Eastern Europe there were strong performances in Ukraine and Romania and in the Adriatic region. However, trading conditions remained tough in Russia and Poland. Innovation continued to drive Nestle’s European growth with a major contribution from brands like Nescafe Dolce Gusto, Nescafe Sensazione in soluble coffee and Herta in chilled culinary.

According to Paul Bulcke, the company is “well positioned in 2012 to deliver the Nestle Model of organic growth between 5% and 6% as well as an improved margin and underlying earnings per share in constant currencies.”

The unpredictability of the average German’s daily routine is having a significant impact on their eating habits, according to a Nestlé study. The company’s second ‘So is(s)t Deutschland’ (‘That’s how Germany eats/is’) survey asked more than 10,000 people about their day-to-day life and dietary patterns.

Work was an obvious influence on people’s eating habits. Surprisingly, longer working hours affected women’s eating patterns more than men’s. Overall, the study found a striking disparity between the sexes’ general attitude to food. More than 55% of women said they worry very much or too much about their diet, compared to 32% of men.

More than half of 20 to 29-year-olds, and more than two in five professionals who took part in the study said their daily routines were unpredictable. Of this group, only one in five said they ate at fixed times of the day. 43% ate only when they had time and 31% said they ate whenever they were hungry.

Among those professionals who worked a 40 to 49-hour week, 43% of women had irregular eating habits compared to 36% of men. More than two thirds of women whose working week exceeded 50 hours ate irregularly, compared to just over half of men in the same category.

Somewhat predictably, many people who took part in the survey said they tended to partially substitute main meals with snacks. This trend was especially prevalent among the under 30s. More than two thirds of people under 30 ate “every now and then” instead of having a regular main meal. Roughly one sixth of this group replaced a main meal with a snack every day or almost every day. Young single people and young couples without children were most likely to substitute main meals in this way.

More than 90% of non-professionals who were questioned said they ate breakfast, lunch and dinner at home. In contrast, more than two thirds of professionals had lunch outside the home. 27% usually or at least occasionally ate out for breakfast.

The study also confirmed that options for eating out or ‘on-the-go’ have increased significantly in recent years. Young people were the most likely to take advantage of this array of choice. Around 41% of 14 to 29-year-olds in Germany visited fast-food restaurants at least once a month, compared to only 7% of 45 to 59-year-olds.

About 68% of people, including two-thirds of parents with children under the age of 18, felt that too many children in Germany had an unhealthy and unbalanced diet.

Private sector companies have an important role to play in addressing the global food crisis, according to Nestlé chief executive Paul Bulcke. In a speech at the ‘Feeding the World’ Economist Conference in Geneva, Switzerland, Paul Bulcke said that the increasing world population, food waste, worldwide water shortages and the issue of using food for biofuels among others, all impact on food security.

Despite the challenges, there are ways and solutions to address this, he emphasised. Governments, public and private sectors and civil society all need to work together to address the issue of food security. He continued: “With an estimated 70% of global poverty in rural areas, investment in building agricultural capacity is crucial.”

Nestlé works with nearly 600,000 farmers worldwide by providing technical assistance, forming partnerships and giving financial support. Its ‘farm to factory’ initiative – Sustainable Agriculture Initiative at Nestlé – supports farmers and promotes sustainable development in agriculture globally. It is part of the Sustainable Agriculture Initiative which unites all interested food companies, primary processors and traders.

Nestlé’s partnerships with agencies such as the East African Dairy Development Board help dairy farmers to boost sustainable milk production in Kenya and Uganda. And the company’s investment in the Nestlé Cocoa Plan and the Nescafé Plan shows its commitment to improve the supply chain, provide technical expertise, support farmer training and enhance living conditions for farming communities. This work is part of what Nestlé calls ‘Creating Shared Value’, an approach to business that aims to create value for the company’s shareholders at the same time as for those communities where it operates.

The ‘Feeding the World’ event is hosted by Economist Conferences – headed by The Economist newspaper. The summit brings together over 200 senior executives from around the world representing agribusiness, food manufacturing, policy, international agencies, science and the NGO community. It aims to provide action plans and new solutions to food security challenges.

The global dairy market will offer strong growth prospects in the coming five years, but the uneven spread of this market expansion and an era of elevated pricing will create as many challenges as opportunities for key players along the dairy supply chain. This is one of the key conclusions coming from the Rabobank Food & Agribusiness Research and Advisory report, ‘Global Dairy Outlook: Show me the money’.

Rabobank forecasts that the global dairy market will expand at 2.4% pa over the next five years but that growth will be unevenly spread, generating some important market dynamics.

Growth will be highly skewed to emerging markets, with countries like China, India and South East Asia expected to account for more than 80% of market volume growth, while western markets continue to mature. Supplying these growth markets, many of which are already in supply deficit, with safe and affordable milk in coming years will require considerable advancement on many fronts: including the development of safe domestic supply chains in emerging markets and the expansion and marketing of surplus production in export regions. “Tapping into emerging market growth will present a particular challenge for many of the world’s dairy processors, most of which are domiciled in, and still focused on, the EU and US markets,” points out Tim Hunt, global dairy strategist for Rabobank.

Opportunities will also be uneven across product categories. In particular, economic, demographic and dietary trends are likely to see cheese sales underperform the broader dairy market. With sales of higher end whey product set to track a much faster growth path, the strategic value of whey pools is rising rapidly. “The divergence of cheese growth and whey demand represents a major structural shift in the market, and justifies a re-evaluation of ingredient production and sourcing strategies,” he explains.

Rabobank forecasts that solid market growth, supply constraints and a structural shift in the costs of producing milk will sustain high milk and dairy commodity prices over the medium term. But this will not translate to increased profits for all.

The processing sector is confronting enormous challenges from high and volatile input costs, difficult economic conditions and retail power. In general the processing sector has managed to maintain or improve their margins, through a combination of stripping costs, trading to higher value-added products and passing through cost increases to consumers. But experience has varied greatly by sector, with Fast Moving Consumer Goods (FMCG) players like Nestle and Danone faring well, cheese makers also improving their returns, while liquid milk players and major Chinese processors have seen their returns decline.

Nestle has launched a new coffee machine designed to appeal to Europe’s millions of small businesses. The Nescafe Alegria, which is being rolled out by the company’s ‘out-of-home’ food services business Nestle Professional, is aimed at so-called ‘micro-enterprises’ of fewer than ten employees.

Micro-enterprises represent nine out of ten small to medium-sized enterprises in Europe, which in turn account for 99% of all businesses on the continent. Nestle says it has identified a gap in this market for a cost-effective system that allows small organisations to make a range of cafe-style coffees for their customers.

The design of the Nescafe Alegria is based on Nestle’s highly successful Nescafe Barista home coffee machine. Available in Japan only, Nescafe Barista was created by Nestle’s research and development network and launched in 2007. More than 600,000 have been sold since then, making it the most popular coffee machine in the country.

To adapt the system for small businesses inEurope, Nestle Professional increased the size of its water tank and renamed it to complement the existing Nescafe Alegria coffee machine range.

The Nescafe Alegria machine has already been launched in seven countries in Europe including Germany, the Netherlands, Poland, Russia and the United Kingdom. Nestle Professional plans to roll out the machine in other European countries later this year. The company may also launch it in Latin America and other parts of Asia.

Nestle is to sponsor one of the world’s biggest youth sports development programmes for the next five years. As part of its commitment to nutrition, health and wellness, the company is to become the main sponsor of the International Association of Athletics Federations’ (IAAF) Kids Athletics programme. The global initiative encourages school children to participate in athletics and educates them about sport and a healthy lifestyle. It also aims to support the development of future athletes.

Kids Athletics was created in 2005. It had reached a total of more than 1.5 million children in 100 territories by the end of 2011. With Nestle’s help, the IAAF will either set up new Kids Athletics programmes, or extend existing ones. It will also be able to provide additional training for athletics lecturers and coaches.

Nestle’s support for Kids Athletics complements the company’s Healthy Kids programme. The global initiative promotes nutrition education, a balanced diet, greater physical activity and a healthy lifestyle to children between the ages of six and 12. It reached an estimated six million children in 60 countries in 2011.

Nestle UK has unveiled proposals for a further £200 million extension to its Nescafe factory in Tutbury, Derbyshire, but will close its coffee factory at Hayes. The investment at Tutbury is in addition to the £110 million extension to the Nescafe Dolce Gusto facility at the site announced in November 2011. For the first time in the UK all forms of coffee production including freeze dried, spray dried and pod technology, will be brought together on one site.

However, production at Nestle’s coffee factory in Hayes will transfer to Tutbury, leading to the eventual closure of the Hayes site, where 230 people are employed, in 2014. The Hayes factory plays a vital role in Nescafe production. However, it is not feasible to redevelop the Hayes site to create the manufacturing facility Nestle UK needs for the future.

125 new jobs will be created in Tutbury through the transfer of production. This is in addition to the 300 new jobs in Tutbury announced in November 2011.

Paul Grimwood, chairman and chief executive of Nestle UK & Ireland, says: “Over the next three years, we are investing £500 million to establish our next generation of world class manufacturing facilities in the UK. The proposed restructuring, which will bring all our coffee manufacturing together at Tutbury, is a key part of this overall investment programme.”

Over the past five years Nestlé has undertaken a multi-million pound investment programme, establishing its next generation of world class competitive manufacturing facilities in the UK. This investment programme includes:

* £200 million spent transforming Nestle’s major confectionery factory in York to create a best in class manufacturing facility;

* creating a £40 million European centre of excellence for Nescafe Cappuccino in Dalston, Cumbria;

* establishing a £20 million seasonal confectionery manufacturing centre in Halifax;

building a new £35 million bottling plant in Buxton that will be one of the most environmentally sustainable operations of its kind in the world when it opens later this year;

* a £7 million expansion for Nestlé’s global Research & Development centre for confectionery in York.

Nestle UK & Ireland has approximately 7,000 employees across 19 sites and comprises: Nestle UK (Food & Beverage, Confectionery and Food Services), Nestle Ireland, Nestle Purina Petcare, Nestle Waters, Nestle Nutrition, Jenny Craig, Nespresso, Cereal Partners UK (a joint venture with General Mills) and Lactalis-Nestle Chilled Dairy (a joint venture with Lactalis).

Nestle is helping China accelerate the development of its milk industry with the construction of a new dairy farming institute in Shuangcheng in Heilongjiang province. The institute, with its series of training farms, aims to be the country’s leading dairy training centre, offering teaching courses from national and international experts.

Dairy farm owners and workers from Shuangcheng and other Chinese regions will be able to improve their farm management skills and learn how to use the latest agricultural technology. They will gain practical experience in expanding their farm businesses, improving productivity and sourcing high quality milk sustainability.

“We have worked with the local authorities and dairy farmers in Shuangcheng for more than 20 years,” says Roland Decorvet, chairman and chief executive of Nestle China. “Over that time we have helped to transform the area into one of the largest milk producing regions in the country. This new training institute is a continuation of our long-term investment in the future of Shuangcheng to ensure it remains one of China’s leading dairy districts.”

In partnership with the authorities, Nestle has distributed 1,000 free milking machines to farmers to ensure no farmers in the region have to continue milking by hand.