Nestlé began its journey in Sri Lanka in 1906 as a trading company and today it’s a local powerhouse in manufacturing with several household brand names like NESTOMALT, MILO and MAGGI noodles, demonstrating the positive outcomes a multinational can have on local economies in terms of livelihood creation, technology transfers, value generation and good quality products that consumers love. Bernie Stefan, Managing Director of Nestlé Lanka, reflects on the company’s 118-year impact on Sri Lankan households, communities, and the economy.
What started as an import business is now one of the largest local producers in Sri Lanka, with 90% of its products made and consumed locally. This presence enables Nestlé to source ingredients locally, creating livelihood opportunities across Sri Lankan communities. “We work with over 10,000 dairy farmers through 60 milk collection centres, and purchased milk valued at about Rs4.3 billion rupees last year,” Bernie said. “Additionally, we invest in these farmers, providing training and development support, with a projected Rs80 million being spent this year alone.”
Nestlé also sources coconuts from approximately 8,000 farmers, with a procurement valued at around Rs6.3 billion last year. Its production of coconut milk powder not only supports local farmers but also contributes to the economy through exports, bringing in nearly Rs14 billion worth of foreign currency in 2023 alone.
Moreover, Nestlé is a significant taxpayer, contributing around Rs34 billion over the past three years. Its commitment to the community extends to product innovation as well, delivering over 530 million fortified servings to Sri Lankan consumers last year, enhancing the nutritional value of everyday diets.
“Through these efforts, Nestlé’s Doing Good Together vision has deeply integrated us into the fabric of Sri Lankan society, contributing to both economic development and community well-being,” Bernie observed, in an interview, the excerpts of which follow:
What drives the success of Nestlé’s brands like Nestomalt, Milo, and Maggi Coconut Milk Powder?
The success of household brands like NESTOMALT and MILO in Sri Lanka lies in their strong connection with local consumers. They have become household staples for great taste, quality, nutrition, and safety, which are non-negotiables for our products.
NESTOMALT, for example, has been a part of Sri Lankan life for decades and leads the market due to its consistent quality and engagement with the community through national sports events and festivals. MILO also reaches over 24,000 young Sri Lankans annually through sports events.
Coconut milk powder is another significant product for us. Nestlé operates in over 180 countries, but Sri Lanka is the only place where we produce MAGGI Coconut Milk Powder. This product is exported to various regions, including India, the Middle East, and the Caribbean, serving as a testament to the excellence of Sri Lankan manufacturing.
As you reflect on your Kurunegala facility celebrating 40 years, what factors shaped your successes in Sri Lanka?
As we celebrate 40 years at our Kurunegala facility, it is clear that continuous investment and innovation are the drivers of our success in Sri Lanka. Over the years, we have consistently upgraded our factory, expanding its capacity and integrating new technologies to meet growing demand and diversify our product offerings. In the past few years, we have invested around Rs8 billion in these upgrades.
Our long-standing presence in the community is another cornerstone of our success. We directly and indirectly employ about 900 people at the factory, many of whom are from the area. Remarkably, we now have the third generation of some families working with us, reflecting our deep roots in the community.
Innovation has been central to our operations. Our local innovation team has played a crucial role in developing and refining popular products like MILO, NESTOMALT, and local NESCAFÉ variants, including the NESCAFÉ Ready to Drink range. We have also introduced new products like MAGGI Papare Kottu and explored new flavours and enhancements, particularly in our MAGGI noodles range.
Having a local facility gives us the flexibility to adapt to market demands. For example, the development of MAGGI Coconut Milk Powder was a pioneering effort by our local team, leveraging the technology used for milk powder and soluble coffee to create a unique product that is now our biggest export item from the factory.
How is Nestlé Lanka tackling climate change and plastic pollution in its quest for net-zero emissions by 2050?
We recognize the importance of addressing climate change and plastic pollution, and we are committed to achieving net-zero emissions by 2050. The changing weather patterns directly impact our supply chain, making it imperative for us to take proactive steps. We have made progress in this regard and reduced our local greenhouse gas emissions by over 40% by transitioning our factories to 100% renewable electricity and introducing a biomass boiler.
In tackling plastic pollution, we introduced paper straws for our ready-to-drink products in 2019, ahead of the mandatory requirement. By next year, over 90% of our packaging will be recyclable, and we are also working with local partners to recycle complex materials, such as beverage cartons, into new products.
However, creating a circular economy requires more than recyclable products; it demands active consumer participation. That is why we have launched the Schools Waste Management programme to educate children about recycling, reaching over 700,000 school kids across 1,000 schools since 2020, and partnered with retailers to establish collection points for recyclable materials, making it easier for consumers to contribute.