FROM THE BEGINNING

Dominican Republic 2017 | AGRICULTURE | VIP INTERVIEW

TBY talks to Alexandre Carreteiro, Director General of Nestlé Dominicana, on the role the company has played in developing the local agriculture sector by educating farmers and providing them with reliable markets for their products.

How has Nestlé in the Dominican Republic changed since it got its start?

2016 marked Nestlé's 150th anniversary and 2017 will mark the centenary of our products' presence in the Dominican Republic. Four decades ago, the government came to us to help develop the dairy sector and we focused specifically on helping farmers enhance the quality of their milk. This is something we did district by district and farm by farm. We provided loans, training, and technical support and, today, we buy milk on a daily basis from 1,100 farmers. Other companies have followed our path, which we are proud of. Secondly, our two local factory application groups research local tastes, which allows us to develop products specifically for Dominicans. One example is the Maggi Gallinita, which is powder bouillon, the first in the Dominican market. This is how we have adapted over the years, by developing alongside the local community and helping to create jobs in agriculture.

What advantages of the Dominican Republic contribute toward the success of Nestlé?

It started 100 years ago when there was a large demand for condensed milk, which was really a novelty at the time. The biggest factor is that Nestlé is well embraced locally. We did a survey and seven out of 10 people believe that Nestlé is a Dominican brand, which shows how well entrenched we are in the country. It is also well situated for us and allows us to have a small hub in the Caribbean, for example, from where we can export to Trinidad, Jamaica, and Cuba. This makes a huge difference—the historical presence, our local knowledge, and a burgeoning consumer base.

Which products see the most growth and how do you see the Dominican market's demand changing in the next five years?

The Dominican consumer is demanding. They are proud of their origins and what is produced here. At the same time, the Dominican consumer is modern and follows trends in the US and Europe, like lactose free, gluten-free, low cholesterol, and high-protein products. Therefore, we need to listen to them and adapt. Today, we rely essentially on three categories, which are dairy, infant nutrition, and culinary. The categories that are growing the most are coffee, particularly our newly launched Nescafe Dolce Gusto, Purina pet care products for cats and dogs, and Nestlé Professional, which are tailor-made products for hotels and restaurants.

What do you see as the biggest future obstacles to food production and distribution in the Dominican Republic?

Productivity has been improving since the CAFTA-DR agreement but at a slow pace, and this is something we continue to focus on and train farmers accordingly. One problem is the dry season; the hot weather makes the output of milk seasonal. There is nothing you can do to solve this issue 100%, but you can do things like give farmers more access to water through pumping and drilling. If producers can learn how to use water more efficiently, there are a lot of opportunities in the productivity of milk. One of the challenges is to have products produced on a larger scale and with higher quality, as they are in the US. It is going to be critical because agriculture is so important for the Dominican Republic.

What are some of Nestlé Dominicana's projections for growth in the next five years?

That the economy is growing between 5 and 7% is enormously helpful; therefore, we will likely see high, mid-to-high single-digit growth in 2017 and double-digit growth in 2018. For that to happen, the key priority must be to innovate and create shared value. We want the innovations to represent a minimum 15% of our sales; therefore, we are restructuring our innovation, marketing, and sales teams to accelerate insights coming from the market. There will be many new products coming out in the next few months.