Nestlé advances digitalisation and sustainability | Local Business

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NESTLÉ is striving to maintain its brand prominence through strong sustainability initiatives and the digitalisation of its operations, which include tracking shipments and monitoring warehouse logistics globally, according to outgoing market head of the Anglo-Dutch Caribbean, Eduardo García Pallares.

García Pallares noted that in recent months, the company has expanded its Valsayn headquarters to include a conference room, and a control room dedicated to monitoring shipments and product movement.

While showing the Express Business live tracking of Nestlé’s cargo on his cellphone, he explained, “This is all of our shipments that we have on the ocean worldwide. We bring product from 50 factories around the world from 25 affiliates; and for example, right now, we have 192 containers, 220 en route, 196 have arrived – 65% of them arrived on time because we had a delay in Panama and Red Ocean – and 33 are present this week.”

García Pallares also demonstrated how this new technology allows them to track shipments globally in real-time, using examples from South Florida, Mexico, the Dominican Republic, and India, with the aid of tracking devices.

“We have perfect traceability of everything. If I ship you three cases, I know which cases and batch codes I sent, so if we have anything to track back, we can. When we do that to our distributors, we know exactly the level of inventories, how they are selling through and how we can support them,” he said.

Asked about his thoughts on people rejecting the idea of implementing technology into their operations, he said, “Let me tell you, somebody told me once and I got thinking; there were people who, when the light bulb and electricity were invented, people said they wouldn’t work. But imagine yourself without electricity right now. I don’t see myself managing 50 factories to 22 territories because if you multiply 50 by 22, that’s the entire combination I’d have (to manage) without technology.”

García Pallares added that tracking shipments has become easier and more efficient. Previously, tracking a shipment from India to T&T could take up to two hours due to the number of calls required to get an update.

In addition to monitoring shipments, he said the company has also digitalised the logistics of its warehouses globally.

To illustrate how the company’s warehouses are monitored, García Pallares showed Express Business a market example, which had ten different reports from workers.

He added that the technology also allows the company to monitor the status of its warehouses, including occupancy, product freshness by month, warehouse, plant, and material group, among other specifications.

“Everybody thinks digitalisation is about substituting people...it’s not that by any means; it’s about quality. I tell my kids that the reason why they eat Nestlé is because I know what is inside Nestlé and because it pays our bills, right?”

He further explained that the factories are connected to 12 processes, each of which can now be monitored at the touch of a button or through the company’s control room. These processes include tracking the freshness of milk collected from farmers, monitoring the amount of milk and production throughput, and overseeing the assembly line, among other aspects.

“This allows us to be more efficient, not efficient in people, but in everything. Just to give you an idea, you can have a demurrage of a container in St Lucia’s port and it could be there for a long time and if you don’t know, you don’t know, right? Now you know immediately that the container is there and you can take action in the factory. Digitalisation is to avoid any quality issue because we are going to know if there would be a quality issue before the product finishes on the line.”

Regarding product movement, García Pallares noted that distributors provide statistics on a weekly or daily basis. He observed a 6% increase in one of Nestlé’s territories and an 8.9% increase year-to-date. Additionally, he reported a 32% increase in product movement for the first quarter.

Explaining why this is so important to consumers, he said, “This way we would know if the product is fresh, expiring or we need to produce more. It was a huge investment and we have invested a lot as we believe it is a competitive advantage and we look forward to investing more in this.”

He added that digitalisation also extends to monitoring the taste and packaging of the product, with quality checks conducted daily.

“If something goes wrong with Nestle products, we would hurt the reputation that has been built for the last 110 years in the Caribbean and we take this very seriously.”

Ongoing improvement on paper straws

While explaining how digitalisation affects product quality, García Pallares cited the paper straws introduced by Nestlé in 2020 under former market head Patricio Torres, which received negative public feedback.

García Pallares said, “We believe the paper straw is better for the consumer even though plastic might be cheaper, but sometimes we have a conviction and the consumers ask us, ‘Hey, why won’t you give me plastic straws?’ But it’s because we take care of the environment.”

Given that paper straws are here to stay, asked if there are plans to upgrade the straws and make them more durable, he said, “We are exploring that actually and I think there’s a lot of room to improve the paper and even the plastic that surrounds the straw. We know people prefer plastic and what do we do? That’s always the dilemma, but in a company like Nestlé, we have to put ourselves on the higher standards and we cannot do what is not appropriate.”

Nestlé’s Anglo-Dutch Caribbean Head of Corporate Affairs, Siti Jones-Gordon, added that the company is now on its fourth generation of paper straws, having made four upgrades since the initial launch.

“The consumer will see that the straw today is actually sturdier than the straw we launched with, and the goal is to continue to improve with the conviction of this being the more responsible choice for the environment.”

García Pallares believes that educating the public about the environmental benefits of paper straws is crucial in encouraging acceptance over plastic alternatives.

In addition to enhancing the paper straws, he noted that the company is undertaking several sustainable projects to build on its existing 27% reduction in greenhouse gas emissions over the past three years.

“There are a couple of them. But I think the number one is reducing the footprint with the ocean freight. By having a tighter ocean freight chain, you reduce and optimise a lot of carbon footprint. The second one is our solar panels, I think we’re improving on that, it’s still a little bit slower than we thought but I think that’s another important step.”

Jones-Gordon added that to support these efforts, Nestlé has introduced a hybrid fleet for their drivers to reduce emissions, and has implemented measures to reuse steam and cut water and energy usage in their plants.

Asked if the company will opt to use methanol as a marine fuel given the goal, García Pallares said, “We don’t have plans at this point but we are always looking.”

Despite this, García Pallares noted that Nestlé is also focusing on other strategies to reduce its emissions, including regenerative agriculture practices, sustainable sourcing, and recipe optimisation.

He explained that the company supports local farmers by sourcing ingredients locally, rotating crops, and replacing certain ingredients with more cost-effective alternatives that maintain the same quality.

Passing the baton

As García Pallares transitions to his new role at Nestlé’s office in the Dominican Republic, he provided insight into his successor, Alejandro Moya.

“I have had the pleasure of knowing him for more than ten years and he has tremendous experience. He has been country manager for other places in Central America, he is Colombian, Panamanian nationality and he brings a lot of great experience. I do believe the strategy is very clear here and I do believe that the team is in place.”

He expressed confidence in Moya’s appointment, noting that Moya is also passionate about youth development and agricultural initiatives.

As García Pallares departs from the Trinidad and Tobago market, he noted that Nestlé’s CEO Mark Schneider also stepped down on September 1, with Laurent Freixe, CEO of Nestlé Zone Latin America, taking over the role. García Pallares mentioned that there were no negative comments about Schneider, and the company is grateful for his contributions, but he is enthusiastic about Freixe’s appointment.

“I think Freixe brought to Nestlé a fresh breath of different things we didn’t see and everyone is happy about the new CEO because he has what we call ‘a Nestlé spirit’. Personally, I am super excited, he has been with Nestlé for 38 years so he knows Nestlé inside out. He has been market head for several markets and here is where we are a little biased... his last assignment was in Nestlé Latin America and the Caribbean.”

García Pallares added that Freixe brings valuable guidance, which he has been fortunate to experience first-hand. He noted that Freixe’s values align with the company’s vision of achieving efficiencies, focusing investments on growth, gaining market share, and delivering profitable growth through sustainability, quality, digitalisation, and safety, with people and teams at the core of its operations.

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