Nestlé looks to dairy supply chain to achieve net-zero

Nestlé, the world’s largest food company, is supporting farmers in its supply chain to farm more sustainably and help reduce the carbon footprint of the value-added products that it produces.

Agriculture offers an attractive opportunity not only as a means of curbing greenhouse gas (GHG) emissions, but also to sequester carbon dioxide through the adaptation of regenerative farming practices that have a net positive affect on the environment.

According to the UN’s Food and Agriculture Organization, livestock farming contributes about 14.5% of global anthropogenic GHG emissions. These are mostly in the form of methane from beef and dairy cattle.

By switching to more sustainable production systems, such as pasture-based dairy farming in which the animals are grazed extensively on grass, a dairy farm can eventually take more CO₂ out of the atmosphere than it produces.

Swiss multinational Nestlé has four processing facilities in SA where it produces some of its brand name products including a range of chocolates such as KitKat, powdered hot chocolate and Milo, as well as condensed milk and evaporated milk, and some of the ingredients used in products.

The company sources milk from 135 farmers in SA, from dairies that produce 200l of milk a day, to large-scale farms producing up to 35,000l of milk per day.

Buying credits

Hoven Meyer, head of agricultural services for Nestlé in East and Southern Africa, said most of the milk sourced in SA is from pasture-based dairy systems. Nestlé is targeting a 25% reduction in emissions by 2025, a 50% decrease by 2030, and it wants to achieve net-zero by 2050.

“Instead of buying carbon credits from outside the company to meet these targets, we believe it makes more sense investing in our own supply chain to reduce the footprint of the raw products that we source from farmers,” said Meyer.

He told Business Day that 65%-70% of Nestlé’s emissions footprint can be attributed to emissions from agriculture, such as dairy farming.

The company now supports dairy producers in its supply network in SA to farm more sustainably.

Some of the interventions that the company supports includes the installation of solar panels to provide renewable energy for the dairies, and the establishment of multispecies, mixed pastures that offer the dual benefit of improving soil health and increasing the rate of carbon sequestration.

Another key factor, says Meyer, is manure management. Manure is a major source of methane emissions on dairy farms. If managed correctly, manure can become a valuable source of fertiliser than can reduce a farm’s reliance on chemical fertiliser. Given that 5kg of CO₂ emissions result from every 1kg of nitrogen fertiliser produced, the switch to organic fertiliser can represent a large reduction in the total emissions generated in the production of one litre of milk.

On schedule

Nestlé supports milk suppliers with a “sustainability contribution” in combination with an advanced payment system, towards implementing sustainable and regenerative farming practices, says Meyer.

One of the farms in its supply network, the 1,000-cow dairy  Skimmelkrans in George, Western Cape, began adapting its production practices in 2021 and is on schedule to reach its net-zero goal in 2023.

Another Nestlé milk supplier, and a rare example of successful transformation in SA’s dairy sector, the 650-cow Springfontein Dairy, was on track to reach net zero by 2025. The dairy, owned by the Makhoba community, is situated on a 10,000ha farm at the foot of the Maluti mountains in KwaZulu-Natal. The emission per litre of milk on the farm has already been reduced from 1.8kg CO₂ to 1.35kg CO₂/l.

Ultimately Nestlé hopes to introduce a payment system that will incentivise farmers to implement and sustain regenerative and sustainable farming practices by paying a premium to compensate farmers for delivering milk with a smaller emissions footprint.

erasmusd@businesslive.co.za