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Feb 14, 2019

The importance of innovation

by Stefano Agostini

stefano agostini

Today, at our Vevey HQ in Switzerland, we have announced Nestlé’s financial results for 2018 which represent a positive step in the right direction and another important milestone for our business. We are seeing increased organic growth both at a global level as well as here in the UK and Ireland while we have also won market share across a number of different categories. This improved performance, overall, is down to some fantastic work that is going on in all corners of our organisation to transform Nestlé UK and Ireland into a faster and more agile company. I thank all of my colleagues for their hard work and congratulate them on some really impressive successes in the last twelve months.

2018 was an exciting year full of new developments and important changes for Nestlé in the UK and Ireland. Two of the biggest included opening a wind farm in Scotland that is now powering half of our electricity needs and our partnership with XPO to start work on a futuristic new distribution centre that will transform how we supply our products.

In many ways our priorities are unchanged; we want to grow our business, create an inspiring place for people to work and offer consumers the best choices. Safety, for example, will forever be our first priority; ensuring safe working environments and making sure that our products are always of the highest quality. That is something that will never change.

But change is also at the heart of how we will achieve our ambitions. Underpinning our successes in 2018 was the relentless innovation that is having a positive effect across our business. I have said consistently how important it is for us to look at new and better ways to provide for the people who buy our products. This can be through the products themselves, their distribution or how we market them.

It is vital that we use Nestlé’s size, scale and experience so that we are quick to find solutions, meet trends and take the opportunities that are out there. Our competition is increasingly coming from smaller companies with an entrepreneurial mindset, a single focus and the flexibility to change direction at great speed. There is no reason that Nestlé cannot demonstrate those same attributes but on a much larger scale. That is how we will succeed and that is why we continue to simplify our business and invest in innovation and growth.

I am very proud when I look back at what we achieved in the last twelve months. We have had a really strong focus on health, diet and nutrition and we are constantly developing our products to make them both tastier and healthier wherever we can.

Our confectionery business saw one of the biggest innovations of the year as we brought the world’s first chocolate bar with 30% less sugar to this market. Milkybar Wowsomes is the first chocolate bar to get such a significant sugar reduction but it is unlikely to be the last. This launch was followed by YES!, a range of snack bars made with fruits, nuts and vegetables that are unlike anything we have offered before in confectionery.

In our cereals we have continued to reduce sugar and increase the wholegrain levels across the range. It may sound simple but these sorts of changes require us to invest time and money in research and development to make sure that our products are just as tasty and appealing as they always were.

A great example of that is with the changes we have made to Sanpellegrino, a brand very close to my heart. Several years of innovation has delivered a 40% reduction in the sugar across our range of sparkling fruit beverages which represents a huge technical achievement and is all the more impressive when you find out just how good they taste.

Some of our other 2018 innovations were simply about special products under some of our most well-known and successful brands. KitKat became the first mainstream chocolate bar to use ruby chocolate, Nescafé introduced nitrogen infused coffee in cans and on tap and our colleagues in Nespresso delivered Vertuo, the same great coffee in a larger size, and perfect for the preferences of this particular market.

All of this product development has been matched by new ways to reach consumers. Our Quality Street brand had a very successful Christmas with more personalisation of the famous tin and a hugely popular pick and mix option thanks to a tie-up with John Lewis. We have continued to expand our network of Nespresso boutiques while Nescafé Azera found a new home at the O2 arena.

We do not only rely on innovating within our existing business and 2018 proved that there are opportunities out there for us to bring the best innovations to Nestlé and vice versa. We announced the formation of a global coffee alliance with Starbucks that brings together, with Nescafé and Nespresso, three of the world’s biggest coffee brands and yesterday we introduced some of the first Starbucks branded products that will go on sale in the coming weeks. Our deals with Starbucks and Nature’s Health will help us deliver more in coffee and healthier snacking while our investment in Tails.com, through Purina, means that we can match our long experience in pet care with the leading expertise in personalised pet nutrition that Tails has built such a reputation for.

Of course, innovation comes in many different forms and, in the coming months and years, we will be increasingly looking at more innovation in our packaging to develop the solutions that mean we reach our ambition of making all of packaging either recyclable or re-usable by 2025. This will be a huge but very important challenge and another example of where the talented people in our business, all around the world, can make a difference.

2019 is set to be another year of change for us with many opportunities and challenges ahead but I am excited to see another twelve months of innovation unfold within this great business that I am proud to lead.

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