May 16 in Parallel Session 3A "Vulnerability & Volatility: Dealing with Local & National Shocks". Presented by Hans Johr, Nestle.

1. How to manage shocks in the supply chain
involving small-holder farmers
Hans Jöhr, Head of Corporate Agriculture, Nestlé
IFPRI 2020 Conference, 16 May 2014

2. Key supply chain benefits of Nestlé’s sourcing
strategy
With “Farmer Connect”, where we have direct contacts with producers to:
• Ensure transparency and traceability up to farmers level;
• Assure quality, safety and volume growth of raw materials;
• Mitigate price volatility exposure;
• Reduce transaction costs and serving our brands guaranteeing access to
specific raw materials.
Nestlé Corporate Agriculture20 May 20142

3. Continuous supply chain improvement in
Pakistan/India (Example 1)
Continuous supply chain improvement help to prevent shocks in the supply of raw
materials.
20 May 20143 Nestlé Corporate Agriculture
Outcome:
• Milk storage and transportation time reduction decreased rejection rate by 95%;
• Production and use of quality feed/fodder and analysis of Aflatoxin at different
critical control points reduced Aflatoxin levels by up to 86%.
• Train farmers in good agricultural
practices related to feed and fodder
production & storage
• Build capacities in supply chain
analysis for raw material quality
improvement involving sourcing and
supply chain staff.
Total Plate Count in Moga Region
(mio./ml)

4. Aflatoxin reduction in grain in Ghana/Nigeria
(Example 2)
Since 2004, Nestle collaborates with the International Institute of Tropical
Agriculture (IITA):
20 May 20144 Nestlé Corporate Agriculture
Outcome:
• Trained more than 22’000 farmers on “Good Agricultural & Storage Practices”.
• Created a market for smallholder farmers worth more than US$ 20 mio. for rural
communities.
• Nestle factories buy all grains locally and farmers can consume safe staple food
(grains), and thereby expect improved health conditions.
• Improve quality of local grains and reduce
Aflatoxin (<4 pbb) in the grain supply
chain.
• Train agricultural extension officers,
suppliers, transporters, and farmers.

5. PEOPLE
LAND
WATER
ENERGY
CLIMATE
To ensure supply we have to smarter use natural
resources by
• Not wasting
• Not polluting
• Not destroying
and a good start is eradicating the worst and
promoting better
Sustainable Agricultural Practices.
Producing more food from the same area of land
while reducing the environmental impacts requires
what we call “Sustainable intensification of
Agriculture”.
Sustainable Agriculture Initiative Nestlé (SAIN)
NO FOOD WASTE
5 Nestlé Corporate Agriculture20 May 2014

6. Markets with “Farmer Connect” /
Direct Procurement activities
• 31 milk markets
• 8 coffee markets
• 3 cocoa markets
• 51 countries
SAIN* and “Farmer Connect” – an overview
6
• Direct sourcing staff:
• Supply chain support staff:
• Farmers supplying directly to Nestlé:
• Farmers received training:
• Collection centers:
• Crop demonstration plots and validation trials:
• Farmers benefitting from financial assistance:
• Budget for financial assistance (CHF):
Source: CSV Reports 2012 and 2013; internal reporting documents
1’ 180
12’130
690’000
273’800
10’000
187
44’200
37.8 Mio
2012
> 1’200
> 11’400
> 686’000
> 300’000
> 10’000
> 900
> 59’000
> 50 Mio
2013
20 May 2014
* SAIN (Sustainable Agricultural Initiative Nestlé)
Nestlé Corporate Agriculture

7. Nestlé Corporate Agriculture20 May 20147