Nestlé has been in the homes of Ecuadorian families for more than 60 years. How did it conquer the market?
We started with imports of our flagship product, which is milk powder, so it was natural. This led to the establishment of the first Nestlé Ecuador office in Guayaquil. We now have two business divisions in Guayaquil and two in Quito. In fact, in December we started operating from our new offices in Guayaquil. This is really important, because the political center of the country is in Quito, and the commercial center is in Guayaquil. We want to balance that. There is a strong cultural difference, so we need to take both into consideration. We have grown our presence through acquisitions of organic growth to an extremely broad portfolio. This would not have been possible if the Ecuadorian consumer had not made that journey with us.
If the pandemic has taught us anything, it is the value of our health. How will Nestlé keep its products healthy?
This is something that has been coming for some time now in the last 10-20 years. We are working heavily on that. Sugar and salt reduction are extremely important pillars. We have seen in our consumer research that the pandemic has significantly changed consumers' behavior toward health. People are focusing on nutrition and healthy eating as a way of preventing illnesses. That is different from a general interest in healthy food—it is a concrete action. They are buying products that they believe contribute to their health. In that sense, we are quickly evolving our portfolio toward healthier options. It is an exciting journey. The US is much further ahead of the curve, but not here. That poses some challenges for us, which we happily take on. The consumer is always at the center of everything we do. We have clear indication of where to evolve our portfolio. Growth is more mindset than metrics. We can grow in our most traditional products through more distribution and better communication. We can also grow in new categories, like new health. Ecuador is not exactly the most cost-competitive country, but there are opportunities. It has excellent, high-quality milk, and it could export much more. I see room for growth everywhere. We need to be closer to consumers, not just in Quito and Guayaquil but more in the provinces. We can grow everywhere.
How does your Nestlé Cocoa Plan help create shared wealth in the agro industry?
We were the number two cacao exporter in the country in 2020, exporting about 80 million of total volume. It goes to other Nestlé branches as well as third parties. We play an important role there. The quality of the cacao here is outstanding. We have more than 3,500 farmers, and we invest in training and helping them increase their yields. We give them the broadest possible view on their job and what they are doing; however, we are seeing a generation relief problem. This is not just in cacao—other countries are dealing with this in coffee as well. The next generation of farmers does not necessarily want to do the same as their parents, which is a huge issue. We are trying to help them understand that staying in the farming business is actually a positive thing. We are trying different programs. We are also investing in initiatives such as digital formation training. We are doing the same in milk as well and help our milk farmers have a more successful business. Behind the scenes, we have many initiatives because we believe it is the right thing to do. We have to recognize the biodiversity of the country. There are three regions—the coast, the highlands, and the Amazon—and they have an incredible richness of ingredients to produce. That is a good starting point. We also have interesting climatic conditions all year around. There are already thriving agro-export businesses such as banana and shrimp, but we believe we can do much more.
How will Nestlé Ecuador participate in the initiative toward a more sustainable and circular economy?
This is more than an initiative—it is a group commitment. We have our global commitments, like carbon neutrality by 2050, packaging, and so on, and we are implementing those changes here. In Ecuador, we have committed to three things in the mid to short term: plastic neutrality in 2021, fit for purpose in 2022, and 100% recyclable packaging in 2023. Ecuador is one of the 12 Nestle market countries worldwide to pioneering the concept of plastic neutrality. This means if we sell 1,000 tons of plastic to the market, we commit to getting at least 1,000 tons back into the recycling circle. We will reach plastic neutrality this year, so we will meet our objective. It is not only about getting plastic back and recycling it—it is about working together with partners to build a recycling network. This is the problem in countries like Ecuador where you do not actually know where you can recycle. In 2022, we want to have all of our packaging fit for purpose, which means we only use the amount of plastic that is functionally needed and saving large amounts of plastic every year. That will happen fully in 2022. By 2023, all our packaging should be recyclable. Today, about 14% of our plastic is still non-recyclable because of the composition of the material. There is still some research to be done. In fact, on a global level, Nestlé opened a packaging institute three years ago that looks at how every plastic we use can be recycled. This is our contribution as Nestlé to the larger society in the country. We also influence other companies to think about what they are doing, which is another side benefit of our commitments.