Nestle: Agricultural Material Sourcing Within the Concept of Creating Shared Value (CSV)

Case Solution

Ray A. Goldberg, Lorin A Fries
Harvard Business School ()

The thoughts of the executive director of Agricultural Economics, Hans Jöhr, were crowding in anticipation of the board meeting in the afternoon. Jöhr saw the meeting as an important opportunity for future-oriented strategies and examined how his team’s efforts in sustainable agricultural procurement supported Nestlé’s position as a world leader in nutrition, health and wellness. The company set out to tackle three of the most pressing challenges in food, water and rural development, and Jöhr’s team was instrumental in each of these pillars. But the forces that changed the global food system were enormous: unprecedented levels of hunger, obesity, and chronic disease; Land degradation, frequent natural disasters and critical threats to the water supply; Population growth in billions in the coming decades, accompanied by increasing urbanization; and a volatile and timid world economy. Given these threats and complexity, how could Hans Jöhr ensure that Nestlé’s agricultural raw materials are produced safely, of high quality, consistently supplied, and in a sustainable, ethical and economic way? How can the procurement process allow the small producer to become a viable partner in the milk production models that Nestlé has developed in developing countries? Also, how could your team go beyond the day-to-day running of the business and realize Nestlé’s visions for the future?

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