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Comparison between Nestle and Unilever

Let’s make a little comparison about the main business, concepts and focused points.

 

Nestle Unilever
Main Business Foods Foods & Daily Chemicals
Concept Creating Shared Value Competing through Sustainability
Focus On Nutrition, Water, Rural Developing Eliminating Deforestation,

Sustainable Agriculture and Small Farmers

Water, Sanitation, Hygiene

Now let’s see what will these two companies have done to achieve their goal of sustainability:

Nestle Unilever
Things had done Create SAIN(Sustainable Agricultural Initiative at Nestle)
Create an SAI platform for other companies
Create USLP(Unilever Sustainable Life Plan)
Calls for Sustainability in the global food system Challenging the culture, Changing the team
Leading the Agricultural raw materials sourcing Nominate CSO, VP of social impact
Supplier code of conduct
Responsible sourcing/Traceability

All these companies are great because they realize that if you want to run the company longer, you have to take more and more responsibilities for economics, the environment, and society. But I think there are some differences between Unilever and Nestle.

Here are the statements that why I think Nestle is the best out of these two great companies.

In my opinion, I’d like to say that Unilever is more focused inside of the company, such as changing the team and nominating a Chief Sustainability Officer, Yet Unilever’s business is very wide, including food and daily chemicals, so the sustainable goal for them is also very ambitious, which means that it’s great but hard to achieve.

We can see Unilever is still more concentrated on economics, i.e., the profits of the company. Because we see the word Competing in Unilever’s concept and more focus on inner factors. But Nestle’s concept, is Shared, which means Nestle wants to make all these things happen by sharing the value of sustainable developments. Nestle created the SAI platform for all the food companies that are in demand of agricultural raw materials and made investments in rural places to make people there lives better. Thus I’d like to say that Nestle is more concentrated on environmental and social responsibilities to make not only the company but also the world better.

According to the Triple Bottom Line’s standard, we can see Unilever’s ambitious plan about sustainable development and taking responsibility due to its wideness of business, and Nestle is more likely to concentrate on smaller things and try their best to make it happen.

As we all know. Nestle is the largest food company in the world. It has about 500 factories in 83 countries. And there are about 400,000 employees working in Nestle. But when a company gets bigger and becomes worldwide. We cannot ignore the impact on the world economy, environment, and society. In Nestle’s story. We see more substantial initiatives and movements to make the world better, especially to solve the biggest problem: food.

Face The Environmental Problems

However, in this modern world, basic industries such as energy, metallurgy, and chemical engineering are still playing an indispensable role in economic development. But industry is the main source of pollution now.

Balancing between the cost of process pollutants and destroying the environment is a growing problem for today’s companies.

After The Industrial Revolution. Our planet is facing more and more destructive factors such as climate change, air and water pollution, and so on. All these factors can cause droughts, floods, and soil degradation. They directly impact the agriculture industry. In India, there are about 59,000 farmers committed suicide due to bad harvests in the last three decades (<Washington Post> 8/1/2017), and according to the India National Bureau of Crime Records, only in 2015, the number of farmer suicides is about 12,000.

Agriculture is a very important industry because, without it, we have nothing to eat. Australia has 408,000,000 sq.km. Agricultural land, 487,600 sq. km. Cultivated land and about 300,000 farmers. Many countries rely on their agricultural activities. But in recent years, many rural places are still using traditional cultivation methods and lack of agricultural knowledge, these factors bring about lowness of output and land degradation.

Take Responsibilities in Society and Environment

As a food company, what does their customers eat is always a hot issue. Nestle, not only from the company’s point of view to make money, but also as a problem solver to take their social responsibilities by making nutrition solutions for both people wo suffer from malnutrition or obesity. The concept of providing “nutritional solutions” to the whole lifecycle of customers is very look-ahead but applicable.

Nestle is focusing on rural development to solve problems. On the one hand, investments in this area can make their own supply chain to Nestle products, and all raw materials can be monitored by Nestle quality standards; on the other hand, Under professional guidance, people in rural places can make more money by growing agricultural product effectively and make their life better.

In Nestle’s Sustainable Agriculture Initiative, The Farmer Connect program plays an important role in the initiative; it unites the raw material producers all around the world, most of them farmers. On the one hand, providing a lot of job opportunities as a supplier of Nestle; on the other hand it makes most of the raw materials can be traced; thus, Nestle can produce better products and be more competitive in the market.

In some social and environmental issues like child labor, deforestation, etc. Nestle also makes commitments about zero tolerance for child labor, never using raw materials like cocoa or coffee that are produced by children. On the issue of deforestation, just like Unilever, Nestle also raises the concept of sustainable palm oil to protect the forest.

As a great company that has to take responsibility, Nestle and Unilever have to measure the impact of every operation or decision they have made on the environment and society.

Sharing Value with its Competitors

Market competition is very cruel and intense. From a traditional perspective, companies will only get competitive power by doing something unique and hard to copy. But by the economics globalization and development of the internet. This point of view may have a little adjustment.

The conduction code is very complicated in the area of logistics, and logistics is a necessary chain in the supply chain, like when the raw material needs to be transported to the factory, and the products need to be transported to the sales market. With different conduction code rules, there will be a lot of trouble transporting goods, which means higher logistics costs in money and time.

Nestle augmented its Supplier Code of Conduct program step by step; the first step was sharing a common audit protocol with its competitors such as Kraft and Unilever, etc.; we can see that the responsible sourcing program is to connect suppliers all around the world and make material trading more easily and convenient.

Nestle is trying to break the traditional competitive mode; it wants to make a win-win situation by embedding their concept: ”Creating Shared Value.” Not only to make the enterprise flourish but also to push worldwide trading and economics to a better place.

Make This World Better

This is the lifecycle of a general product:

From raw materials to a finished product, there are four steps:

  1. Suppliers provide raw materials and energy to the company.
  2. In the factory, workers make products by pre-processing the materials, manufacturing the product, and packing the product for sale. In the meantime it will generate some byproducts and wastes.
  3. The finished product will sell on the market.
  4. The customers consume the product and make waste, such as packing materials.

Except for the last step, Logistics service and quality control are always needed in first 3 steps. Here is the importance of the agreement for supplier code of conduct between the competitors and traceability of the raw materials. Nestle made it all efficient.

Then let’s see a recent news released by Nestle:

Nestlé aiming at 100% recyclable or reusable packaging by 2025.

Nestlé today announced its ambition to make 100% of its packaging recyclable or re-usable by 2025. Its vision is that none of its packaging, including plastics, ends up in landfill or as litter. Nestlé believes that there is an urgent need to minimize the impact of packaging on the environment.

Nestlé CEO Mark Schneider said, “Plastic waste is one of the biggest sustainability issues the world is facing today. Tackling it requires a collective approach. We are committed to finding improved solutions to reduce, reuse, and recycle. Our ambition is to achieve 100% recyclable or reusable packaging by 2025.”

The company focuses on three core areas: eliminate non-recyclable plastics, encourage the use of plastics that allow better recycling rates, and eliminate or change complex combinations of packaging materials.

At the end of this paragraph, here are some announcements:
Recognizing the need for developing a circular economy, Nestlé is committed to:

Playing an active role in the development of well-functioning collection, sorting, and recycling schemes across the countries where we operate;

Working with value chain partners and industry associations to explore different packaging solutions to reduce plastic usage, facilitate recycling, and develop new approaches to eliminate plastic waste;

Labeling our plastic product packaging with recycling information to help consumers dispose of it in the right way;

Promoting a market for recycled plastics by continuing to increase the proportion of recycled plastics in our packaging

Preventing packaging material from ending up as waste, including in seas, oceans, and waterways, is one of the key reasons behind Nestlé’s pledge.

As you can see Nestle is making another step for protecting the environment. Most of Nestle’s products are small and packed individually, and the usage of packing material is a very large amount. After the product consumed, only about 36% of it will be recycled (2015). Plastic is a very difficult material to degrade and will cause white pollution. If this goal is achieved, the pollution due to plastic waste will decrease a lot.

So the concept of Nestle products may be like this:

All the suppliers are managed by one common coding rule, and all materials are traceable for better quality; most of the pollutants will be recycled and reused to minimize waste. I think this is the lifecycle that Nestle is trying to achieve and make their concepts for sustainability come true.

The SAI Platform, water management, rural development, and commitments about ethical issues. As a None Government Organization, Nestle helps and takes responsibility for economics, the environment, and society.

Conclusion

Nestle and Unilever are both big and great companies in this vulnerable world. There are many problems to be solved, such as famine, drought, poverty, water pollution, greenhouse effects, and so on. From my point of view, Unilever is more likely to seek solutions from the inner self by establishing departments and changing their management strategies. Also, the goals about sustainability of Unilever seem like a long-term plan; it is very ambitious, which is good, but it is hard to achieve in a short time or some staging target.

Nestle focused on small but effective targets to make sustainable agricultural sourcing and help the world in many ways. The strategies about nutrition, water, and rural development all contribute to cutting down the pollution, getting rid of poverty, creating job opportunities, and so on. It also improves the supply chain of Nestle, even the whole food industry, by unifying the supplier code of conduct and making raw materials provided traceable for quality and management.

Above all. I’d like to say that Nestle is more likely doing a solid job of taking responsibility for economics, the environment, and social. Making a better world as a great company.

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