A Creating Shared Value Report of Nestlé Philippines, Inc.

2011 Edition

CREATING SHARED VALUE REPORT

 CONTENTS
Chairman & CEO’s Message 2
Nutrition 3 - 18
Water and Environment 19 -30
Rural Development 31 -62
CSV Forum 63 - 64
CSV Council 65 - 66
Contact Us 67

1
 This 2011 CSV Report highlights the
major CSV programs that we have
sustained over the last few years,
particularly in the areas of nutri-
tion, rural development, and water
and the environment. While these
programmes do not claim to
address all of the enormous social
problems that the country faces, we believe
that they create big enough ripples to make a real
Chairman’s Message and positive difference in society as we continue to
nurture generations of Filipino families in another
Making a Positive Lasting Difference 100 years.
in the Lives of Filipino Families It is our hope that through this report, we
will be able to share our programmes and develop
In the next few pages, you will be introduced to farmers who have
further partnerships to usher in an era of multi-
restored their faith in the abundance of their land planting coffee
stakeholder collaboration for the betterment of the
the Nestlé way; unemployed barangay women who have found
Philippine society.
purpose and livelihood sewing for Nestlé factories; tricycle drivers
who have become mini-entrepreneurs selling Nestlé products;
calamity victims who have found new homes and are building new
lives in Nestlé GK villages; shoeless children who now dream of
becoming athletes after receiving shoes from MILO.

We take pride and joy knowing that our Company has touched the
lives of thousands of Filipino families in the last 100 years. We have
done this through Creating Shared Value (CSV) for our business and
for society.

As we celebrate our 100th year in the country, Nestlé Philippines is

more committed than ever to embed Creating Shared Value (CSV)
in our operational activities and weave it seamlessly into the fabric
of our corporate being. More and more, we see CSV as a source of
opportunity, ingenuity, and a competitive advantage for our Com-
pany. It challenges us to creatively craft strategies that not only
make a profit for our business but also create a meaningful and
lasting social impact as well. It makes us constantly look for oppor-
tunities in the value chain where we can create shared value – from
agriculture and sourcing of raw materials, through manufacturing
to the distribution of our products, all the way to our communica-
tion to our consumers.
JOHN M. MILLER
Chairman & CEO
2
 Nutrition

3
Impact on Nutrition
Improve Nutritional
Understanding

Encourage Healthy
Habits/Behaviors

Access to Nutritious Food

Promoting an Active Lifestyle

4
 Laki sa Gatas:
Putting Milk at the
Heart of Good
Nutrition for
Growing Children
Inside the glass is a piece of paper that bears the uneven
but distinct lines of an airplane, drawn by an 8-year-old
who dreams of becoming a pilot some day. The glass,
typically used for drinking milk, is called the Ambition Glass
as it now encases a child’s dream.

This glass is just one of the many that have served as vessel
to similar drawings by grade school pupils who have
attended the BEAR BRAND Laki sa Gatas nutrition education
advocacy. By translating their ambitions to such drawings,
both the glass and the drawing serve as reminders of how
proper nourishment and drinking milk can help them
achieve their dreams.

Such has been the Laki sa Gatas experience since its launch
in 2006. The half-day nutrition education session includes
the use of colorful flipcharts and fun games led by “Kuya
Benjie.” These sessions help the children learn about the
importance of milk and good nutrition.

The Laki sa Gatas experience is not just for the children but
extends to the children’s parents and their teachers.
Mothers have gone to their children’s schools to attend the
half-day event, where they are given a lecture by a
registered nutritionist-dietician on nutrition, health and
wellness, practical tips on how to ensure proper nutrition
for their kids, plus a meal planner to help them prepare
balanced meals for their families. Thousands of teachers
have taken part in the program, getting briefed on how to
monitor the health conditions of their students and develop
action plans to help malnourished ones.

5
Post-activity research results show that children who attended the
Laki sa Gatas event increased their daily consumption of milk as their
mothers also increased the number of glasses of milk served daily in
the weeks right after Laki sa Gatas. This behavioral change can do
much to alter the dismal nutrition profile of Filipino children in the
lower-income families, who comprise 70% of the entire population.
According to the 2008 National Nutrition Survey conducted by the
Food and Nutrition Research Institute, a number of children do not
have milk in their diet with only 13% of children ages 6 to 12 only
meeting 13% of their recommended milk intake/day. This figure gets
worse as the children’s ages go up, their mothers equating nutrition
with noodles and fruit juice under the misperception that children
outgrow their need of milk.

Laki sa Gatas continues to visit public elementary

schools throughout the country year after year,
bringing the same nutrition education experience
and message to thousands more children, moth-
ers, and teachers. BEAR BRAND’s Laki sa Gatas
remains steadfast in its mission: To educate
Filipino families on the value of providing children
with proper nutrition including milk and thus give
them a good head start toward the future as
envisioned in their Ambition Glass.

6
 Turning Consumers into
Nutrition Smart Shoppers

Does nutrition come at a higher price?

Not always. That’s what Nestlé tells consumers with the Lauded in 2009 by the Department of Science and
Check the Label campaign of NIDO 3+, urging them to Technology as an “innovative way of promoting correct
study the label when buying nutrition-sensitive products information to consumers” and cited by the Department of
such as milk to determine their real nutritional value Trade and Industry as “well aligned to our mission of
instead of simply assuming that higher-priced brands are developing well-informed and vigilant Filipino consumers,”
more nutritious. the Check the Label campaign is helping transform more
and more Filipino consumers into nutrition-smart shoppers.
7
Nearly 70% of consumers who have been exposed to the campaign see the worth of its message and are likely
to adopt the practice.* This simple practice should enable them to get the best nutritional value for their money.

When checking labels of Nestlé products, consumers get more than a listing of contents. Each Nestlé product
comes with a Nutritional Compass on its packaging, an easy-to-follow graphic tool to different points of interest
about the product— nutritional information, health and wellness tips, and where to call should they need more
information. It enables consumers to make informed choices when buying food and beverage products, while
giving some friendly reminders on how to achieve wellness. That’s the power of the label being harnessed by
Nestlé to empower consumers with the right nutrition information to make the right shopping decisions.

*source based on post-evaluation of R&D deployment

Nutritional
Information

For More
information

Health & Wellness Tips

8
 Making Wellness the Lifestyle
Choice of Filipinos
They meet every Sunday 5:30 a.m. at the Makati
Park — at least 200 of them of different ages and
occupations with little in common except the
desire to get fit and achieve wellness the Nestlé
way. A fitness instructor gets them on their feet to
form an orderly assembly, some music is played,
and they all move to the groove — stretching,
bending, jumping, dancing, and sweating it out.
Once a month, a seminar on relevant health and
nutrition topics follows the hour-long exercise,
after which they get to consult one-on-one with a
nutritionist for practical advice on how to achieve
their ideal weight and improve their physical
fitness.

These weekly and monthly routines are repeated in 18 other places from up north in Baguio to down south in Davao,
where the Nestlé “I Choose Wellness” Advocacy for the Community is currently on the run. Nearly 50,000 of
participants have chosen to stick to the program every week, signing up for the “I Choose Wellness” Passport program,
where their health indicators such as weight, body mass index, and blood pressure are recorded and tracked every
month, and where they get reward items in exchange for points earned from engaging in wellness activities. This Well-
ness activity is a real, sustained, and monitored experience for Filipinos at no cost to them.

9
 Among them is Elenita Reyes, 45 years old, who has lost 8 unhealthy
kilos since stumbling upon the weekly activity and getting hooked on
it. “I feel and look much better now that I have learned to be more
physically active and more knowledgeable about the food I eat.
I used to get easily tired. I feel healthier now.” she says.

Millions of Filipinos continue to learn more about nutrition, health,

and wellness through the other components of the Nestlé “I Choose
Wellness” campaign:

• “Choose Wellness, Choose Nestlé”

at the Trade. The Company deploys
registered nutritionists to trade outlets and
public markets to educate shoppers on
nutrition and wellness to help them make
purchase decisions attuned to their
wellness needs. Shoppers may also consult
the nutritionists on their personal health
and nutrition concerns, during which their
relevant body measurements are taken for a
proper assessment of their needs. Over 5
million people have sought counseling from
Nestlé-deployed nutritionists since 2005.

10
 • Wellness in the Workplace. Nestlé spreads its wellness
advocacy with business companies, government agencies,
hospitals, and schools by conducting its Wellness in the Workplace
Workshop for representatives of these institutions. This program
is designed to give participants a solid background on nutrition,
health and wellness, and help them develop wellness programs for
their respective organizations. More than 200 companies,
represented by HR practitioners, teachers, and medical staff, have
attended the workshop. Some of them have launched their own
wellness programs as an offshoot of attending the Nestlé
workshop.

Wellness Begins at Home

Six years since its launch to Company employees, the Nestlé
Wellness program continues to spread through every
activity within the Nestlé organization, as employees are
constantly encouraged to adopt a healthy lifestyle through
proper nutrition and physical activity. Nutrition education
training, regular physical exercises, year-round sports and
recreation activities, incorporation of wellness in internal
communication materials, a well-equipped gym at every
site, and a dedicated nutritionist per site — these are what
make wellness palpable in the Neslté culture.

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• Wellness Expo. Nestlé highlights its nutrition,
health, and wellness advocacy by holding an annual
two-day Wellness Expo in celebration of the Nutrition
Month of July. Open to the public, the wellness fair
features standard Nestlé wellness activities — nutrition
counseling, seminars on nutrition and health, physical
measurement of participants for health assessment
purposes, plus an array of engaging wellness activities
by the Company’s major brands. More than 20,000
consumers trooped to the 2010 Wellness Expo, of which
more than 18,000 people took part in at least one of the
wellness activities, around 7,000 availed of nutrition
counseling, and more than 5,000 signed up for the
I Choose Wellness Passport program.

Nutrition
Online
Together with the Food
and Nutrition Research
Institute which develops
relevant content for an
online nutrition resource
called nutritionschool.ph,
both FNRI and Nestlé
provide visitors with
valuable information
about good nutrition,
health and wellness.

12
 B r in g in g
N u t r ie n t -E n r ic h e d
F o o d w it h in R e a c h
Aling Nene goes to the sari-sari store to buy baon
for her son. She gets him one pack of BEAR BRAND
Busog Lusog family cereal drink. While at the store,
she decides to get MAGGI Sinigang, a NESTEA Litro
Pack, and 20g pack of MILO. She gets all these for
around PhP 23, well within her limited budget. She
may not realize it, but that amount has also bought
for her family a dose of zinc, iron, calcium, vitamins
and minerals, and iodine.

Like Aling Nene, millions of Filipinos in the lower-

income brackets buy food products in small packs
from small stores. These are everyday food
necessities that Nestlé has fortified with the very
nutrients that the Food and Nutrition Research
Institute found to be lacking in the average Filipino
household, and makes these affordable and
accessible to them. The Company makes use of
Nestlé’s global superior nutrition science research
to constantly innovate its products with nutrient
combinations that address known deficiencies
among Filipinos while keeping the costs low and
developing routes that bring these within easy
reach, so Aling Nene and millions more like her can
get the nutrients they need from good-tasting and
budget-fitting Nestlé goods.

13
The range includes:
• BEAR BRAND Powdered Milk Drink with zinc, vitamin C, and iron
• BEAR BRAND Ready-to-Drink with zinc and vitamin A
• BEAR BRAND Busog Lusog Family cereal drink with zinc and iron
• MILO ACTIGEN-E (combination of B vitamins and micronutrients -- a good source of niacin, iron and calcium
with enriched levels of vitamins B1, B2, B6, B5, B8, Magnesium and Vitamin C) and malt extract PROTOMALT
(mixture of different types of carbohydrates)
• NESTEA Litro Pack with Vitamin C
• KOKO KRUNCH Breakfast Cereals with B Vitamins, iron and Vitamin C
• CERELAC Rice & Soya with Protect Plus (Bifidus BL, Immunonutrients: DHA, Iron, Zinc, Vitamin A and C)
• MAGGI Sinigang with Vitamin C

14
 Promoting a
Healthy Lifestyle
Through Sports
The sight of a 10-year-old running in the country’s biggest marathon
event with a big smile on his face as he approaches the finish line is
enough inspiration for Nestlé to have its many MILO sports develop-
ment programs touch the lives of as many Filipino youngsters as
possible. The sight of this same boy running barefoot, is more than
enough to stir the Company to provide this child and many others like
him with the most basic of sports gear — shoes.

And so, some 4,000 public elementary school students nationwide are
walking to school in new shoes this year — shoes given to them by MILO
through a million-peso grant matched with a million-peso fund raised
from a portion of registration fees from the 200,000 or so runners in the
2010 National MILO Marathon. By gearing them up with running shoes,
the Company puts them on track to becoming champions in life through
the values of discipline, teamwork, competitiveness, sportsmanship,
and perseverance learned in sports.

Nothing beats the MILO Marathon when it comes to the scope of reach
of a sporting event, having sent millions of Filipinos running since its
pilot run in 1976. Held in key cities nationwide, the country’s biggest
marathon event offers people of all ages and walks of life an enjoyable
venue to experience the natural high from running. And with its new
advocacy of helping provide shoes to the shoeless, the MILO Marathon
has become even more relevant to young Filipinos aspiring to become
tomorrow’s champions.

15
At the heart of Nestlé’s
champion-building program is the
MILO Summer Sports Clinics,
hailed by the Philippine Sports-
writers Association as the
longest-running grassroots sports
development program in the
country. The Clinics, which
started out in 1983, provide
youngsters as early as 7 years
old, with professional and
scientific training on various
sports, including badminton,
basketball, bowling, chess,
football, gymnastics, ice skating,
karatedo, lawn tennis, squash, swimming, table tennis, and
taekwondo.

Millions of Filipinos have undergone at least one MILO Sports

Clinic in their lifetime. Among them are some of the country’s
champion athletes such as Chris Tiu (2008 UAAP Basketball
Champion), Japoy Lizardo (2007 SEA Games Medalist) and Nica
Calapatan (2005 SEA Games Gold Medalist).

16
 Recognizing the all-important role of schools in the over-all formation
of young people, Nestlé consistently partners with the educational
sector in advancing its sports programs. For over two decades now,
the Company has been the driving force behind inter-school sports
competitions for elementary and high school students through MILO
Little Olympics. Starting out as a city-wide competition in 1988, the
event has evolved into a national athletic meet where represented
schools compete in several events, and the winning schools receive
cash prizes to be used to purchase sports equipment. In 2009, over
946 schools nationwide took part in the first ever National MILO Little
Olympics.

17
To get more youngsters to actually experience the thrill of engaging in sports,
Nestlé has launched the MILO Champ Camp. This is a half-day program that Nestlé
brings to elementary schools nationwide, gathering pupils ages 7-12 and teaching
them the rudiments of basketball, baseball, and soccer through 15-minute drills
per game supervised by professional trainers. The activity is meant to supplement
the school’s P.E. instruction for the day, and includes a lecture on sports principles.

Champ Camp involves the students’ parents as well, inviting them to a session
where they are taught about nutritional benefits of MILO, the values learned from
sports, and the importance of an active and healthy lifestyle for kids to avoid
lifestyle-induced diseases such as diabetes and hypertension later in life. The
recipe for a perfect MILO drink is also shared with the parents.

Launched in 2009, Champ Camp has visited around 680 schools nationwide and
engaged nearly half a million students in the camp’s
mini-sports training. It was also held at trade outlets in
April and May during the summer school break, enabling
thousands of shoppers and their kids to experience the
camp activities.

18
 Water and
Environment

19
Impact on Water and the Environment

Water Conservation Energy

Sharing Best
Waste Management Practice

20
 CONTINUOUS REDUCTION OF ENVIRONMENTAL IMPACTS since 2000
60.00%
55.01%
50.00%

40.00%

30.00%

Change , %
20.00%

Conserving 10.00%

0.00%

Water -10.00%

-20.00%
Nestlé Philippines is keenly
-30.00%
aware that water is a -35.87%
-35.59%
life-giving resource that is -40.00%

finite and getting scarcer by -50.00%

the minute. The Company 2000 2007 2008 2009 2010

Prod.Volume Total Water Withdrawal Rate Total Water Discharge Rate
takes water conservation to
heart, leaving no stone
unturned in finding ways to minimize and optimize consumption, treat wastewater, and protect water sources.

Optimizing Water Consumption

All Nestlé worksites employ various means to use water efficiently, ever pressed to reduce consumption while increasing
production. Workers are greatly involved not only in implementing water-conservation practices but more so in thinking
of ways to conserve water at their level, since they are the ones who know best the conditions within which they do their
job. Water-conserving ideas are thus aplenty in the worksites — mostly simple practices that cost little spending but
cause a lot of savings.

Among these are:

• Reuse of sealing water from vacuum pumps, where the water is recircu-
lated and used all over again as sealing water for the same vacuum pumps
• Recirculation of cooling water instead of being immediately discharged to
waste
• Reuse of water from Reverse Osmosis plants for such purposes as flushing
of toilets
Plants

• Reuse of the final rinsing water during cleaning-in-place (CIP) of process

equipment as initial rinsing water for the next CIP
• Reuse of effluent for irrigation of plants and grass inside factory premises
Reverse Osmosis

• Use of automatic washer for the cleaning dryer, which regulates volume
of water used to clean the dryer
• Insulation of steam valves and leak management
• Use of sensor-operated faucets, which ensures automatic stoppage of
water flow as soon as faucet use is done
• Throttling of supply valve to regulate water flow
• Installation of cistern tanks to collect rainwater
• Use of waterless urinals

21
 t e W a s t e T r e a t ment Plants
Was

All these water-saving initiatives have reduced water consumption

throughout Nestlé Philippines by 41% since 2006, or an average of
170,000 cubic meters of water every year. In 2010, water consumption
further dropped by 20%. Water dropped to 7.21 m3/t from 9.01 in 2009.

Treating Wastewater
Nestlé operates world-class wastewater treatment plants in all its factories and distribution centers to make sure
that every drop of water used is cleansed of impurities before being released to natural waterways. Industrial
wastewater is treated separately from domestic waste to produce cleaner effluent and ensure absence of the bacte-
ria that characterize the domestic kind.

Treated water from Nestlé sites is constantly tested and known to meet, and often exceed, strict government
standards. Nestlé-treated water is clean enough to sustain marine life, as evidenced in koi or tilapia fishponds in all
factories, which get water solely from the treatment plants.

Preserving Water
Sources
Nestlé keeps a caring eye for rivers and creeks that
run through the communities where it operates.
Through community outreach programs, the sites
organize regular clean-up activities in areas
surrounding the water sources and waterways.

The Cagayan de Oro Factory, in particular, makes it a

point to clean the Umalag River of algae, cut grasses
near the river, and rid the area of scattered trash. The
factory has hired a contractor to do this every month.
Employees and barangay residents of Tablon do their
share in cleaning up the river environs every quarter.
Cagayan Distribution Center has mobilized employ-
ees, local residents and students to clean up the
coastal area in Barangay Casinglot.
22
 Spreading Water Awareness
Nestlé has also joined hands with Department of Education, DENR-EMB, and CEAE in
conducting the Project Water Education for Teachers (WET) in various communities
throughout the country. Project WET is a curriculum-activity-based training on water and
related environmental concerns.

Using Energy Efficiently

CONTINUOUS REDUCTION OF ENVIRONMENTAL IMPACTS since 2000
60.00%
55.01%
50.00%

40.00%

30.00%
Change , %

20.00%

10.00%

0.00%

-10.00%

-20.00%

-30.00%
-35.87%
-35.59%
-40.00%

-50.00%
2000 2007 2008 2009 2010
Prod.Volume Energy Utization Greenhouse Gas Discharge Rate

Another natural resource that Nestlé takes extra care to use responsibly and optimally is energy, fully aware
not only of the cost of power generation but more so of its climate change impact and the dwindling supply of
fuel, which is the world’s primary source of energy.

23
 The Company invests heavily in technologies that reduce consumption, convert byproducts into
energy, and tap the use of alternative energy sources. Some of the more notable ones are:

• the use of Solatube lighting, which captures • Use of Thermax Chiller condensate in Cabuyao
solar energy to provide lighting inside factory to reheat water
buildings and warehouses • Arrest of steam leakages in all factories by
• Conversion in CDO Factory of spent coffee installing insulation steam valves and through
grounds into 24 MT of steam per hour through other leak management means
the Atmospheric Fluidized Bed Boiler (AFBB) • Use of Variable Frequency Drive (VFD) Motors
• Recovery of exhaust heat or gas from power to control air blowers and cooling fans
plants in Lipa and Cabuyao Factories to • Use of high-pressure gas discharge lamps for
produce secondary steam that serves as fuel outdoor lighting in Lipa
• Recovery of exhaust heat from air heaters in • Use of solar-powered air conditioners in the
Cabuyao to pre-heat incoming fresh air before Cagayan DC main warehouse and offices
final air heating • Use of glass skylight windows also in Cagayan
• Recovery of heat from air compressors in CDO DC to minimize use of lighting inside the
Factory warehouse during daytime

Serving as a strong foundation to the Company’s energy-efficiency efforts is a well-developed energy-

consciousness among employees, which has been achieved through continuous training. Such mindset is what
drives every department in all worksites to keep looking for ways to avoid wasteful use of energy and develop
energy-efficient practices, and monitor their respective energy consumption rates. These practices range from
something as basic as turning off lights when not in use to something as technical as reducing steam pressure.

Energy management in every work site is continually audited to ensure that work practices and processes are
constantly reviewed to determine where energy usage can be further optimized.

24
 Reducing the Environmental
Footprint of Packaging
The role of packaging in the sustainability agenda is to Nestlé promotes that reducing the environmental
prevent food waste by providing adequate protection to footprint of a product or service requires ‘life-cycle
the product from manufacture to consumption. Aside thinking’. This approach may be applied in packaging
from minimizing food loss, packaging contributes to design to show the impact of a material in all phases of
environmental preservation by ensuring that fewer its life, i.e. from raw material extraction up to recovery
resources are used to produce it while meeting the and disposal.
demands of the market.
Comparative impacts of two materials may be assessed
Packaging source reduction is an important part of using an eco-design tool called PIQET which stands for
Nestlé’s environmental policy. This program is aimed at Packaging Impact Quick Evaluation Tool. Developed in
reducing the amount of packaging used without partnership with Strategic Packaging Alliance (SPA) of
compromising product quality and safety. In 2009 Australia, the web-based tool generates a spider graph
alongside growth in product volume, Nestlé Philippines summarizing the influence of a given packaging material
ranked 5th among Nestlé markets that contributed to on eight predefined indicators such as the one shown in
this program. Through initiatives such as use of thinner figure below. Shorter distance from the center means
gauges, optimized dimensions and material lower impact for a given indicator. The chart compares
replacements, the company saved 2,046 MT of the former rigid plastic container to the new shaped box
packaging usage in that year alone. made of laminated paper for the product Nestlé Pops.

Climate Change

2.197e+0 kg CO2 eq nd
Cumulative Energy Dema
Solid Waste
5.029e+1 MJ LHV
4.718e-1 kg

Minerals & Fuel

Water Use
3.542e+0 MJ surplus
8.287e-2 kL H20

Photochemical Oxidation
Land Use
1.835e-3 kg C2H4 eq
5.574e-5 Ha a
Eutrophication

1.342e-3 kg PO4 3- eq
Tub &... POPS in Hexagonal Box
POPS in Plastic

25
PIQET results can be translated into equivalent units for easier comprehension, allowing the packaging
designer to have a clear idea of the impacts of the packaging choice over one year of sales. Based on 1.5
million retail units of Nestlé Pops per year, the environmental gains of moving to the shaped box are
expressed as follows:

On climate change - 223 trees saved

On comulative energy demand - 24,414 households worth of energy use

saved

On photochemical oxidation - 102,000 passenger car kilometers not

driven

On water use - 579,800 household buckets of water saved

On solid waste - 58 wheely bins of trash not generated

Completely embedded in our Nestlé Packaging Environmental Sustainability Policy, PIQET is systemati-
cally applied during the packaging innovation and renovation process. It serves as an internal decision
support tool allowing the user to design a packaging material that is not only the most suitable for the
product, but the one with the least possible negative impact to the environment.

26
 Going Beyond Nestle
Nestlé Philippines values water and the environment. Water conservation and environment protection
are inherent in its corporate culture. Recognizing that water and environment are universal concerns,
the Company goes beyond the confines of its operations in upholding these values. Through structured
programs, Nestlé shares its best practices and initiatives with business partners and encourages them
to develop a similar commitment to water conservation and environment protection.

Greening the Supply Chain

Nestlé helps business partners develop their own environmental management system (EMS) through the
Greening the Supply Chain (GSC) program. The Company provides business partners with training on EMS as a
tool for improving environmental performance and visits them on-site to guide them in developing their own
environment programs.

To sustain the initiatives, Nestlé invites all GSC business partners to a day-long forum every four months. The
fora serve as a venue for business partners to learn more about the environment, get updated on relevant
issues and regulations, network and share best practices with other companies, and collaborate in addressing
common issues such as water and climate change.

27
In 2010, GSC business partners made a formal pledge to conserve water, stating their respective water
consumption reduction targets. These targets are now being monitored within given timelines.

Now on its 10th year, GSC has helped over 170 business partners improve their environmental performance
through EMS, enabling them to put up their own wastewater treatment plants, materials recovery facilities,
waste segregation systems, and water and energy conservation programs, among others.

Water Pledge

Total 2011 Pledge 137,825.55

Actual 2010 water saved 41,233.12
Cubic meters projected savings 179,085.67
Which is equivalent to:
895,428 DRUMS*
*estimated representation

Here are some fruits of GSC:

• A co-manufacturer reduced water usage by 30% after setting up a

re-use system and saved 25% on LPG cost by simply switching to
bulk container system.
• Another co-manufacturer reduced total waste generation by 40%
by strictly implementing the 3Rs (Reduce, Reuse, Recycle).
• A laminate packaging supplier now saves 30% on major chemical
usage through a recycling scheme and 5% on energy consumption
through a power management system. It was also able to put up a
low-cost wastewater treatment facility through collaborative
studies with the DOST-MIRDC.
• A plastics supplier was able to save 60% on major packaging
materials after launching a solid waste reduction program.
• A primary packaging supplier cut down its energy bill by 5% soon
after installing capacitor banks. It also achieved 10% savings on
cost of water through regular collection of rainwater.
• The GSC partners committed to a water pledge and expected water
savings from this pledge is around 179,085.67 cubic meters which
is roughly 895,428 drums of water.

28
 Greening the
Transport Operations
Nestlé transport operations mainly involve more than 1,100
trucks that carry Nestlé products between its manufacturing
facilities and distribution centers nationwide. These trucks
are owned and operated by 19 third-party truckers with a
total of 3,500 trucking personnel in their employ. To reduce
the environmental impact of its transport operations, the
Company has initiated projects aimed at maximizing the use
of transport resources, notably:

• Balik Baterya, a joint project between Nestlé and its

truckers and the Philippine Business for Social Progress
(PBSP) where truckers donate sales proceeds from its used
lead acid batteries to PBSP. Nestlé collects these batteries
from the truckers and turns them over to Motolite, which
in turn passes the batteries to the Philippine Recyclers, Inc.
for proper recycling. Motolite pays for these batteries
directly to PBSP, which uses the proceeds to finance its
social projects.

29
 In 2010 to 2011, three rounds of collection yielded a total of 710 batteries from Nestlé truckers, which fetched
Php 440,000 for PBSP. In 2009, the used tires donated by Nestlé truckers netted PhP 195,000, which PBSP used to
provide free textbooks to students in two public elementary schools in South Cotabato.

• Bantay Langis, a joint project with the ABS-CBN Foundation, under which Nestlé truckers turn over their used
oil for purchase by an oil-recycling company. Proceeds are then donated to ABS-CBN Foundation to finance its
Bantay Kalikasan program.
• Dedicated Return Trip (DRT), a program that ensures every return trip of a truck from a delivery destination to
its point of origin performs a delivery function as well. Previously, Truck A would deliver from factory to
distribution center (DC) and make an empty return trip while Truck B delivers from DC to factory and likewise
return empty. Under the DRT program, Truck A assumes the function of Truck B delivering from DC to factory on
its return trip. This effectively halves the number of trips between the two points.

Raw and Packaging Material

Factory

Supplier

Finished Goods

Distribution Centers

Co-Manufacturing Sites

Caring with Partners

To ensure that Nestlé’s co-manufacturers, truckers, and other partners comply with government requirements as
well as Nestlé and international standards, the Company has rolled out the Nestlé compliance assessment
program to key co-manufacturers and transport partners. Called CARE (Compliance Assessment of Human
Resources, Safety, Health & Environment), the program verifies, through external independent auditors, that
operations of co-manufacturers and truckers are aligned with relevant standards, laws, and regulations pertaining
to labor, business integrity, safety, health, and environment practices. CARE participants are given ample time to
correct audit findings and implement recommendations, after which a second audit is done to check progress and
ensure complete compliance is achieved.

30
 Rural Development

31
 Impact on Rural Development
direct indirect employment direct purchasing of energy-efficient procurement of contribution to
employment (contractors, locally grown equipment and local services local education
collection agents) commodities practices facilities

employment Nestlé products investment in local employee training clean drinking Nestlé-built waste
volunteering and for sale and transport and apprenticeship water and hygienic water treatment
charitable consumption infrastructure projects plants
donations

32
 Micro-distributorship Program
Turns Underemployed Pinoys to
Entrepreneurs

A husband who used to depend on his Dubai-based wife’s earnings has asked his wife to come home as he
now earns enough for their family. An odd-job worker who could barely make both ends meet six years ago
now earns enough to send his children to school, afford medical service for his epileptic child, and construct
an extension to his house.

A school teacher who earned P6,500 a month three years ago now generates as much as P50,000 monthly
income and has just recently bought a brand new car. Lotto winners? No. But they all feel like they hit some
kind of jackpot to have their lives turned dramatically around — the jackpot being the opportunity to run
their own business under the micro-distributorship program of Nestlé Philippines.

33
Micro-distributorship, primarily a route-to-market scheme developed by the Company to target
bottom-of-the-pyramid accounts, is proving to be one of the Company’s most viable and effective
means to help provide livelihood to otherwise unemployed or underemployed Filipinos. It allows
any able-bodied individual — who can read, write, compute and drive — to become small-scale
entrepreneurs by selling Nestlé products to small accounts in areas that are not covered by Nestlé
distributors.

The scheme takes the form of three different programs representing the three major sales units of
the Company — Micro Distributor (MD) of Grocery Field Sales, Carrito of Ice Cream Sales, and
Business on Wheels (BOW) of Nestlé Professional. In all three programs, the entrepreneurs are
trained on the Nestlé way of selling, product knowledge, and the mechanics of the program they
are in. They are equipped with Nestlé-branded motorized tricycles and assigned to certain
territories to tap and develop their accounts. They get their stocks of Nestlé products from Nestlé
distributors, enjoy a certain discount on distributor rates, and are allowed to mark up their price by
a certain percentage. On any regular day, these enterprising peddlers earn a net income higher
than the daily minimum wage, with the capacity to earn so much more.

34
 The MDs of Grocery Field Sales are
deployed in densely populated urban
areas to sari-sari stores, delivering
and selling to these accounts a range
of Nestlé products that are known to
be in great demand among sari-sari
store shoppers. To date, this program
has given livelihood to some 392 MDs
nationwide, among them being
Daniel Gorospe whose wife is now
happy to be back from Dubai helping
Daniel grow their MD business.

35
The Carrito sellers of Ice Cream ply the streets of
residential subdivisions and other high-traffic public
areas to sell the range of NESTLÉ Ice Cream products
categorized as “impulse”, the kind that consumers are
known to crave for in a whim. Numbering about 2,000
nationwide, these vendors earn from regular commis-
sion and different financial incentive programs such as
daily and monthly incentive bonuses. Armando Araja

Among the hardest working carrito

vendors is Armando Araja of San
Jose, Nueva Ecija, whose earnings
from selling NESTLÉ Ice Cream in
the streets had sent a daughter to
earn a degree in Education and
enabled him to provide medical
attention to his epileptic child,
something he never could afford
before he joined the Carrito
program in 2004.

36
 A promising Street Selling project is also on the rise under Operation Mobile Store (OMS) program of the
Chilled Dairy Business Unit, under which small entrepreneurs sell BEAR BRAND Probiotic Drink in high-traffic
places such as schools, bus terminals, public markets, and churches. The sellers are equipped with a cooler
mounted on a trolley (called “Rambo carrito”), which they lug along with them as they ply their usual route.
Piloted last quarter of 2009, the program has provided a steady source of income to more than 60 sellers in
Metro Manila and nearby provinces, many of whom are ladies who were formerly unemployed or without
livelihood. Aside from earning a commission for every bottle of BEAR BRAND they sell, they receive monthly
cash incentives to add to their income. During the rainy months of June to August, considered lean season,
they also get kilos of rice as assistance.

37
The biggest earners seem to come from the ranks of the
BOWers, who sell Nestlé products to small carinderias,
kapihans, and small-scale eateries. Around 350 of them
are in active operation nationwide, many of whom earn
triple the minimum wage. Others have developed their
own ways of growing the BOW business, surpassing
earnings of white-collar professionals. No wonder
Peachy Francisco left her teaching job to concentrate on
expanding and closely managing her BOW venture,
which has enabled her to send her children to a private
school and afforded her to build up their family
resources that now include a brand new car.

38
 Nestlegosyo:
Helping Small Stores Boost Business
Nestlé products reach its consumer through over 640,000 sari-sari stores and market stalls scattered
throughout the archipelago. Deriving a portion of its total sales from these small stores, the Company
recognizes the decisive role that this channel plays in getting its products sold to the greater mass of Filipino
consumers.

To build and nurture partnership with these stores, the Company has developed a dedicated program called
Nestlégosyo that provides small store owners with useful information and tools for growing their business:
relating with their customers, displaying their merchandise, and developing a mindset of nutrition, health,
and wellness. The program involves studying and developing content that is relevant to the channel, such
as: best-selling SKUs, proper display, easy-to-recall tips, sanitation and hygiene, as well as nutrition and
wellness. Every year, Nestlégosyo reaches around 25,000 tinderas.

39
Nestlégosyo imparts all this information through:
• Classroom sessions conducted by Nestlé Sales executives
as well as guest speakers, like Mr. Francis Colayco, as part
of trade events for sari-sari storeowners;
• Personal visits to the stores by Nestlé distributors for
face-to-face coaching; and
• Production and distribution of leaflets, brochures, comic
books, calendars, and other informative materials.

From time to time, Nestlégosyo runs sales promos exclusive

to small stores, allowing stores to increase their margin by
hitting certain targets or complying with specially developed
display guidelines. Stores also receive useful display tools as
added incentive.

“Malaki ang naitulong ng Nestlégosyo sa pamilya ko dahil

ito ang pinagkukuhanan namin ng aming ikinabubuhay”
“Nestlégosyo has helped me and my family a lot because
this is our main source of livelihood.” – Susan Perlata
(Owner, Peralta’s Sari-Sari Store)

40
 Responding to the
Needs of OFWs
With an estimated 11.5 million Filipinos working in
foreign shores, OFWs (Overseas Filipino Workers) and
their families have become a potent force in the
marketplace. This phenomenon has prompted Nestlé
to give dedicated attention to this growing sector in
Philippine society, catering to their special needs based
on two insights gathered from focus discussions with
OFWs and dependents:

• OFWs, particularly mothers who are forced to part

from their families, are eager to take an active role in
nourishing their families in spite of the distance
between them.

• OFWs ultimately want to have a business of their

own to sustain livelihood, in preparation for the time
when they come home for good.

For some years now, the Company has been carrying

out special programs that respond to these insights.
First is the gift-giving service which allows OFWs
anywhere in the world to send various products
including nutritious Nestlé products to their families by
simply ordering online or through remittance agencies.
They may send specially wrapped gift sets on special
occasions or simple grocery packs consisting of milk,
coffee, breakfast cereals, and other Nestlé products
that mothers usually shop for their family. This Nestlé
service gives OFWs a chance to convert part of their
monetary remittance to grocery items that provide
their family with nutrition, health, and wellness. This
assures them that their children get their supply of
milk, breakfast cereals, and other products they
normally buy for their little ones despite their physical
absence.

41
Second, to help them realize their dream of having their own business, Nestlé has designed for them a sari-sari
store start-up package called the Nestlégosyo Bundle which has been availed of by 35 Seafarer families.
The package, available in P7,000 and P15,000 bundles, comprises Nestlé SKUs that are known to sell fast in sari-sari
stores, along with free store display materials and other business tools such as a calculator and notebook, plus a
booklet of guidelines on how to start up a small store business. Going one step further, Nestlé partners work with
cooperatives to provide qualified OFWs with low-interest small loans to finance this start-up package.

“ Nakatulong talaga sa amin ang

Nestlégosyo Bundle. Nakadagdag kita sa
aming pamilya at natulungan ko pa ang
kapatid ko na walang pinagkakakitaan.”
(“The Nestlégosyo Bundle has really
helped us. It added to our family income
and helped my brother who was not
earning anything.”)

- May Paceta (Assistant Manager of

Magsaysay’s Crew Family Affairs;
married to a seafarer)

Nestlé continues to explore ways it can

help OFWs and their families by keeping
in close touch with organized groups of
OFWs, manning agencies, and other
establishments that are dedicated to
OFWs, linking arms with them in
providing overseas Filipinos the services
they need to strengthen their family ties
and sustain their livelihood for the
long term.

42
 Maggi Dedicated Seller Program

Parallel to the Company’s micro-distributorship schemes is a

dedicated selling program launched by the Food Business
Unit in 2005 to push MAGGI products in the public market,
specifically in the market stalls and market stall-x channels.
This program has given livelihood to over 160 people
nationwide, who now make up the MAGGI-exclusive sales
force tasked to drive the distribution of MAGGI products in
the general trade and oversee the execution of
brand-initiated activities, in partnership with our
distributors nationwide.

Many of these sellers attest to the program being key to the marked improvement in their economic conditions.
Ancielyn Udarbe and Charima Noche, both of South Luzon 1, say they have been able to build their respective houses
and buy motorized vehicles from their earnings. Others say that their earnings from selling MAGGI have enabled
them to finance their daily family needs, education and some were able to venture out to other business projects
such as sari-sari stores or buco juice stalls.

43
 Sharing the MAGIC
Providing Basic Culinary-
Entrepreneurship Education
as Means to Better Livelihood

Vilma Villareal is a simple housewife who runs

a small sari-sari store at their house in Quezon
City. As a cook, she says that between her
husband and her, she is the less experienced
one — a fact that her kids would attest to. So
how come she also runs a small carinderia
beside her sari-sari store?

What she lacked in experience, Vilma filled

with practical and cutting-edge know-how that
she gained quickly and easily from culinary-
entrepreneurship program organized jointly by
the Food BU of Nestlé Philippines and the
BAYAN Academy of ABS-CBN Foundation. She
applied for this program last August 2010,
underwent the screening process, and got
accepted as part of Batch 5 of the MAGGI
Culinary-Entrepreneurship program.

On September 12, 2010, she opened a carinderia as an extension of her sari-sari store and started serving breakfast
dishes. She soon saw that this was an opportunity to generate additional income and now plans to expand her carinderia
to a bigger space and start serving lunch, merienda, and dinner. She is optimistic that with her little investment, backed
with passion and formal training, she can make life better for her family.

44
 This training that Vilma attended is one of the
customized programs developed by MAGGI to
address specific needs of the target participants.
Many of the total 209 food enthusiasts who went
through the same program have reported similar
gains from the training. Housewives like Vilma,
who were aspiring to get into the food business,
have actually been encouraged to put up their
own. Those who have existing businesses
expanded their menu offerings and have
observed an increase in their daily income.
Meanwhile, other graduates have used the
training to beef up their qualifications for employ-
ment in the food service industry.

The five-day customized culinary-

entrepreneurship program was the second
phase of Nestlé’s partnership with the BAYAN
Academy, a step forward from what used to
be a simple product sponsorship deal
between the Company and the Academy.
Nestlé has linked up with BAYAN, a social and
enterprise development institutions that has
helped more than 50,000 families establish
entrepreneurial ventures nationwide, to
advance its own agenda of providing basic
culinary and entrepreneurial education to
aspiring chefs, small business owners, and
caterers in the BCDE income brackets to help
them get started in the food business or
improve their existing business.

Through lectures, demonstrations, and hands-on exercises held in a kitchen-equipped classroom, the program teaches
participants basics in good cooking such as kitchen safety and sanitation, ingredients and ingredient substitution, waste
segregation, food plating and presentation, safe and balanced meal preparation, healthier eating habits that promote
nutrition, health, and wellness and easy recipes using MAGGI products, among others. A similar program is designed for
the entrepreneurs, which includes lessons in purchasing, inventory, culinary math, and sales and marketing. Their learning
was put to a test via a simulation of an actual “carinderia” business, wherein the profits generated were donated to the
foundation. Graduates of these courses are monitored for one year to track their progress.

45
In parallel, Nestlé also launched its train-the-trainer
program to the members of the Food BU and BEST
team. This was a 10-day basic culinary program
that prepared them to be trainers and assistant
chefs. Aside from equipping them with basic
cooking know-how, it also enabled the team to
have a joint learning experience and at the same
time allowed them to get more actively involved in
the BU’s CSV initiative. From June to December
2010, the BU and BEST team members served as
volunteer assistant chefs and touched the lives of
BAYAN trainees. As they continuously develop
more trainers within the team, they develop a
more solid foundation for future runs that MAGGI
intends to conduct.

The culinary-entrepreneurship program is in line

with MAGGI’s global brand vision, which highlights
the role of cooking in influencing the family’s life
for the better. This, in essence, is the spirit with
which the Food BU creates shared value for its
business and for the millions of households where
its products serve to enhance cooking.

By educating the many culinary talents among

Filipinos who have had little formal training, the
MAGGI brand takes an active role as an enabler for
the participants to improve the quality of their
lives, by uplifting the quality of the food that they
prepare and serve not only to their families but to
the community; and providing them with some
solid means to improve their craft and their liveli-
hood.

46
 Cut & Sew: Empowering
Women in the Barangays

Mila Lambio had been unemployed for most of her adult life as she chose
to attend fulltime to her daughter. When Nestlé put up a manufacturing
Ka Mila Lambio plant in Barangay Bagong Barrio, Lipa City — right where she lived, in the
early 1990s, Mila and other unemployed housewives in the neighborhood
all thought it would be wonderful to be employed in the plant as it was so
near their homes they wouldn’t have to part too far from their children.

Much to their delight, Mila and other housewives like her who had basic
sewing skills were tapped by Nestlé for a livelihood project in 1997. They
were sent to TESDA for formal training on sewing, shouldered cost for
training and sustaining capital, and awarded with a Purchase Order for
sewing jobs that helped them obtain a start-up business loan from a local
bank. Thus the Cut & Sew project was born, and the ladies soon started
doing small sewing jobs for the factory. In just two years, Cut & Sew
became an organized cottage-industry type of enterprise, with Mila acting
as community leader who oversees the operations and represents the
group to business transactions with Nestlé.

47
For several years now, Cut & Sew has been generating at
least P1.5 million worth of business every year for the
ladies, who now supply the factory’s demand for uniforms
(pants and polo jackets) lab gowns, hairnets, shoe covers,
and rags. On the average, the Cut & Sew ladies in Lipa
earn around 2,500 to 4,000 pesos monthly, with the more
productive ones such as Mila netting more.

Mila herself has seen a dramatic

economic improvement in her life.
Through Cut & Sew and her involvement
in other livelihood projects with Lipa
Factory, Mila has earned enough to have
three houses built for her family. She
has also seen her child through college.
What gives her the most satisfaction is
the recognition she enjoys as a commu-
nity leader, which inspires her to share
as much as she knows with other
women in the hope of encouraging
them to become economically produc-
tive through livelihood projects such as
Cut & Sew.

48
 Most recently, Cut & Sew was adopted in Barangay Tibag where the Pulilan Factory was reopened to manufacture
ice cream and chilled dairy products. This project was replicated in this factory in partnership with the New
Zealand Embassy.

About 25 formerly unemployed women from the barangay were recruited into the project forming the Samahan
ng mga Mananahi. They underwent a briefing by Mila Lambio of Lipa on how Cut & Sew could provide them with
a steady source of income and also attended TESDA trainings to improve their sewing skills. Today, the 25 ladies
supply hairnets, face masks, filters, aprons and service uniform repairs for Pulilan Factory, earning an average of
Php 3,700 per month.

Women of Cut & Sew Pulilan

49
 Gardening
in the Factory

Another noteworthy livelihood activity for Ka Mila

and other Bagong Barrio housewives is the Yard and
Garden in Lipa Factory. Here the ladies engaged in
cut-flower production and organic vegetable farming
in a plot of land within the premises of Lipa Factory.
The factory provided the start-up financial assis-
tance, planting materials, and relevant training,
enabling the Yard and Garden members to take full
charge of the operation of the garden. They sell all
their produce to the factory canteen and employees
and rent out the ornamental plants to the factory.
They use the earnings to pay for their operational
expenses, including remuneration of those involved
in the project.

50
 Uplifting the Lives of
Coffee Farmers
Nestlé Philippines is the country’s biggest buyer of green coffee beans, purchasing majority of the entire Philippine coffee
produce. Relying heavily on local farmers for the supply of raw materials that go into manufacturing of NESCAFE, the Company
explores every possible means to help farmers improve the quality and quantity of their yield. Through its long-running
agronomy program, Nestlé has enabled thousands of farmers to make a profitable living out of coffee-farming and encouraged
thousands more to venture into coffee farming.

The Nestlé agronomy program started way back in the 1960s

when the Company opened its first NESCAFE-manufacturing
plant. Then as now, the foremost objective is to equip local
coffee farmers with the best available technologies and
techniques to enable them to increase their harvest per
hectare and improve the quality of their coffee. At the core of
the Company’s agronomy program is the Nestlé Experimental
and Demonstration Farm (NEDF) in Tagum City, Davao Norte,
which was built in 1994 to serve as the hub of the Company’s
agricultural research and training activities. The agronomy
program does this in several ways:

• Providing access to world-class coffee farming technologies.

Nestlé agronomists continually conduct trials and experiments at the NEDF and across the country to discover and
develop better techniques of growing coffee. They also cascade research findings from the Nestlé R&D Center in Tours,
France to the demo farm to test them for local application. Continuing research allows Nestlé to equip farmers with
scientific tools for adapting to changing agricultural conditions or new methods that had been pre-tested and shown to
generate positive gains.

51
• Training. For effective transfer of technical know-how,
the Company offers three kinds of training to farmers;

(1) three-day basic seminar, which is open to any one who

wants to learn about coffee-growing; (2) three-week
advanced course, for coffee specialists and technicians from
government agencies, NGOs, and LGUs that provide assis-
tance to farmers; and (3) on-site training for farmers whose
coffee farms need to be improved. Training is provided
• Promoting sustainable practices
free-of-charge.
Nestlé has developed a coffee-based sustainable
In the past three years, NEDF has trained 829 farmers within
farming system that allows farmers to plant other crops
its facilities and conducted on-farm training to 1,509 farms
in between rows of coffee trees and enable them to
nationwide.
earn additional income. This is in line with the
• Propagating coffee planting materials Sustainable Agriculture Initiative of Nestlé (SAIN),
a worldwide advocacy for making coffee farming
Integral to the NEDF is a nursery where Nestlé agronomists feasible and sustainable.
propagate high-yielding and high-quality rooted cuttings that
become ready-to-plant seedlings. These are made available To cascade this system, Nestlé set up 13 demo farms in
to farmers at minimal cost. It is estimated that Nestlé coffee-producing regions nationwide that now serve as
provides 80% of all Robusta cuttings in the Philippines. In the working laboratory where farmers can observe first-
last five years alone, the NEDF has distributed 1,215,612 hand how sustainable coffee is done and get first-hand
coffee seedlings. information from farmer-cooperators on the benefits of
the system. Two examples of these demo farms have
shown to generate good income from crops planted
between coffee trees— one in Toril, Davao City, which
plants highland lacatan banana alternately with coffee;
and another in Sultan Kudarat, which earns additional
income from peanuts, upland rice, and white beans
planted between coffee.

52
 • Directly buying from farmers

Under its direct procurement policy, the

Company buys coffee beans directly from
farmers instead of traders at prevailing market
price, for as long as their beans meet the quality
standards of the Company. Nestlé is the biggest
buyer of green coffee in the country and its
demand usually exceeds the supply. Farmers are
invariably guaranteed of buyers, and are thus
able to concentrate their time and attention to
producing the coffee with little worry about the
marketing side.

53
• Linking arms with government

Nestlé’s ardent support of coffee farmers has not escaped the attention of the Philippine government. In
2009, the Department of Agriculture entered into a Memorandum of Agreement with the Company after
expressing desire to partner with Nestlé in further developing the coffee-growing industry. This has led to
joint projects between Nestlé and the government involving training of government agronomists in coffee
farming technology and increased propagation of coffee planting materials.

Regional officials of the Department of Agriculture from Bicol, Iloilo, Bohol, Mindoro and Cavite have so far
participated in a two-day seminar at the NEDF, and were set to cascade their newly acquired learnings to
farmers in their localities. Among the early beneficiaries of this technology-transfer effort were coffee
farming communities in Bohol and Surigao del Norte.

For more information on Nestlé’s coffee program, contact: coff[email protected]

54
 Claudio Arandia

Octogenarian’s Unlike most of his neighboring farmers in Silang, Cavite who sold their
farm lots to real estate developers, octogenarian Claudio Arandia stuck

Long-Lasting to his farm and got rewarded for it.

Affair with Like most farmers in Cavite, Claudio planted pineapples all his life until
he decided to shift to coffee in 1975. He marketed his produce to

Coffee
retailers in the nearby palengke who sold the roasted and ground coffee
beans in a can. It was in the 1990s when he decided to sell his green
coffee beans to Nestlé that life tasted a little sweeter. His two-hectare
farmland grew to nine hectares and the carabao and karitela were
replaced by two jeepneys and a pickup. Averaging a harvest of 10,000
kilos of green coffee beans yearly, Claudio hit the jackpot in 1997 when
he harvested 12,000 kilos. Part of his earnings went to the purchase of a
maroon Honda Civic.

“Nestlé has been a part of my family’s success. I always cherish that

every time I drink my coffee in the morning,” he mused.

55
 Coffee Awakens
Bayanihan Spirit
Hope and change for the better came to
Julio Budlayan and his fellow farmers in
Kahayagan , Surigao del Sur in 2007 when
they received free on-site training on
modern coffee farming from Nestlé
agronomists Jose Reano and Proceso
Cortejos. Although Julio and the farmers
had been farming for decades, the lessons
in coffee farm cultivation and maintenance
that they gained from the training quickly
made an impact on the volume and quality
of their harvests.

Julio Budlayan

56
 The training also awakened the sense of community among
the Kahayagan farmers. This has spurred them to form their
own cooperative, the Kahayagan Coffee Growers’ Associa-
tion, through which they can now share in the blessings of
the land by working together as a community, in the true
spirit of Filipino bayanihan. By pooling resources and sharing
knowledge, the benefits they get are multiplied and For its first project, the coop bought a de-hulling
received by all their families. machine after pooling contributions from
members. Before that, the farmers had to rent
vehicles to transport their dried coffee beans to
the next barangay where there was a de-hulling
machine they could use for a fee. Since buying
their own de-hulling machine, the farmers have
saved a lot in terms of time, energy and money.

For its second project, the coop sent some

members to the NEDF in Tagum for further
training.

“As late as it may seem, farmers in our barangay

have realized we are much stronger when we are
united. If ever there’s knowledge a farmer ought
to know, we must learn it as a group. Walang
iwanan sa kape,” said Julio, who became the
cooperative’s founding president in 2007.

57
Building Homes, Rebuilding Lives

A house to call their own. For years, it was a luxury for Rolando to allow himself to think of such
a place. With his daily earnings as a laborer hardly enough to feed their seven children, a roof
over their head at night was something they had to beg for, sometimes even fight for. Informal
settlers, they were called, with very slim chances of ever hauling themselves out of the rut they
were in.

Until Gawad Kalinga, that is. Early last year, they were among the first batch of families who
qualified for a house in the newly developed GK Nestlé Eco-village in Lipa, Batangas. They
moved in July, and have since embraced a new life anchored on a place they can finally call their
own in a community designed for ecologically sustainable living.

“I cannot even begin to describe the feeling of knowing that my family is now assured of safe
and permanent shelter,” said Rolando. “Life in this village is good—peaceful, quiet, and clean,
the complete opposite of the place we used to live in.”

58
 Rolando’s high spirits and optimism are shared by the 19 other families who have so far settled in the 50-house
village that Nestlé Philippines committed to develop in Lipa for Gawad Kalinga. Beyond merely providing housing
structures to beneficiary families, the village is intended to bring about a community that lives in harmony with
nature. It is equipped with a rainwater catchment system that allows recycling of rainwater and is designed to
make use of reed bed technology that processes sewage by natural reed system without use of chemicals.

Nestlé’s continuing commitment to build this eco-village for GK sprang from its initial involvement with Gawad
Kalinga in 2004, when the Company heeded GK’s call to come to the rescue of families displaced by a huge fire in
Baseco, Tondo. Mobilizing 150 volunteers to help reconstruct the houses in Baseco, the Company soon committed
its full-blown support to the GK cause, building 50 houses in Baseco and adopting 4 more, for a total 54 houses and
households that the Company continues to support to this day.

Rainwater catchment
59
A Venue for Volunteerism
The Company’s partnership with Gawad Kalinga has kindled
the spirit of volunteerism among Nestlé employees. From
time to time, groups of employees visit the Nestlé GK
villages to render some form of assistance such as helping
paint houses, conducting livelihood workshops, cascading
wellness tips, teaching children, and other such activities.

60
 Two business units have embraced the cause of GK in their
respective social development platforms: the Dairy Health
and Nutrition Solutions (DHNS) and the Liquid Beverages
and Dairy Culinary (LBDC) units.

Expanding the sphere of its BEAR BRAND

Laki sa Gatas program, DHNS launched a
four-point assistance program called Lakbay
Tagumpay specially for the GK Nestlé village
in Baseco early this year. The entire program
consists of:

• Palaruan-repair and sponsorship of a

playground for the village’s children;
• Nutri-Patrol - where nutritionists visit the
village every 2nd Saturday of the month
to monitor the children’s growth in
relation to weight and height and advise
parents on proper nutrition;
• Lakbay Tagumpay - tutorial sessions for
children and inspirational talks for
parents held every 2nd and 4th Saturday
of the month; and
• Lakbay Kabuhayan - workshops that teach
village residents practical livelihoods
skills, conducted every month.

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For its part, LBDC, through NESTLÉ CHUCKIE, as its
initiative of providing primary education, turned
an empty school building in the GK-Nestlé village
into a bright and cheery classroom, furnishing it
with books and toys and most importantly,
sponsoring its school teachers. The Nestlé Sibol
school caters to about 25 school-age children.

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 Heading Toward
an Era of
Collaboration

Nestlé Philippines, Inc. has taken the lead in promoting the

concept of Creating Shared Value in the local business
community, seeking to encourage companies to achieve
sustainable business growth while helping boost social
progress in the country.

The Company took its first significant step in this endeavor by

gathering leaders from government agencies, NGOs, business
organizations, and the media to a forum on CSV at the New
World Hotel in Makati in April 2010. The Company organized
the event in cooperation with the Philippine Business for Social
Progress (PBSP), the Asian Institute of Management, RVR
Center for Corporate Social Responsibility, and the Asian
Development Bank (ADB).

With the theme “Creating Shared Value: Beyond CSR”, the

event saw some 260 representatives of different stakeholder
groups engage in a public discussion of the evolving concept of
CSV. In opening the forum, Chairman and CEO John Martin
Miller called on the business community and other sectors of
society to “form an era of collaboration” and to reinforce the
increasing role of the private sector, particularly the
multinational companies, in driving social development
through CSV.

No less than the world’s leading CSV proponent Mark Kramer

led the cast of speakers at the forum, giving the audience a
comprehensive view of CSV as a viable, effective, sustainable,
and profitable business philosophy. Kramer is a Senior Fellow of
John M. Miller Harvard University and Founder and Managing Director of FSB
Social Impact Adviser. He co-wrote the landmark study Strategy
and Society: The Link Between Competitive Advantage and
Corporate Social Responsibility, which was published in the
Harvard Business Review in 2006.

63
 Tony Meloto
Mark Kramer
In his presentation, Kramer explained that CSV is more expansive,
more precise, and more integrated than CSR in its approach toward
achieving a mutually beneficial or “symbiotic” relationship between
business and society. “You have got to find the points of convergence
rather than the points of tension. It’s really providing competitive
success and at the same time really making a material difference”, he
said. He further illustrated how CSV allows a corporation to integrate
social responsibility and social progress within the core of its values,
business strategy, and business processes. He cited as an example
how Nestlé partners with local farmers in its business operations,
resulting in mutual benefits.

Arjun Thapan
The forum featured three other distinguished speakers who expounded on
how the CSV philosophy can generate greater gains for both business and
society in the areas of nutrition, water resources, and rural development. The
speakers shared insights on how corporations can help ensure that a society’s
citizens are adequately provided for in terms of their nutritional and water
needs, and how rural areas can achieve development in partnership with big
business.

Dr. Mario Capanzana, Director of the Food and Nutrition Research Council,
spoke on nutrition, emphasizing the need for making affordable but healthy
food innovations accessible to the bottom of the pyramid. Arjun Thapan,
Special Senior Adviser to the President on Infrastructure and Water of the
Asian Development Bank, touched on the urgency of managing today’s water
resources to ensure water availability in the future. Antonio Meloto, Chairman
of Gawad Kalinga, talked about rural and community development.

Through the forum, Nestlé Philippines hopes to have captured the interest of
more business companies to consider adopting the strategy of CSV and thus
think of ways they can create partnership with different sectors of society and
Dr. Mario Capanzana effectively make a social difference in the years to come.

64
 CSV Council:
Championing CSV
Nestlé Philippines, Inc. has stepped up its CSV campaign
with the creation in January 2010 of the CSV Council. The
creation of the Council manifests the Company’s intent to
further embed and champion CSV in the organization,
indicating the prime importance of CSV as a strategy for the
Company.

Composed of representatives from all Business Units and

Shared Services, the CSV Council serves as the one body that
consolidates, drives, and directs all CSV initiatives of the
Company. With support from top management, the Council
is tasked to align CSV activities, measure their success in
definite terms, ensure a common understanding of the CSV
concept within the Company, and communicate all these to
employees, stakeholders, and the general public. The CSV
Council meets regularly to share and exchange ideas on how
to design and monitor local CSV programs, receive updates
on the progress of ongoing programs, cascade learnings,
know more about best CSV practices from other countries,
and keep up-to-date on global CSV directions and initiatives.

65
To date, the Council has had many
accomplishments. Council members have
become more cognizant of the social needs
of the country as the CSV team invites
experts from time to time to speak about
local issues in the fields of nutrition, water
and rural development. The Council
constantly seeks to meet with NGOs and
bilateral aid agencies, and in so doing has
formed partnerships with external groups
that help maximize the impact, scale and
sustainability of the Company’s CSV
programs. Close communication between
and among members has also paved the
way for collaboration and joint programs
between business units.

Now on its second year, the CSV Council is shap-

ing up to be a fine model for championing and
driving Creating Shared Value in the Nestlé
milieu. Through the steering of the Council,
Nestlé Philippines is confident it is on track to
keep doing good for society while doing what’s
good for business.

66
 We would like to hear from you.

For comments or inquiries on Creating Shared Value

Contact us:
[email protected]

67
 Nestlé Philippines, Inc.
©2011, Corporate Affairs
Nestlé Philippines, Inc.

Nestlé Center, 31 Plaza Drive, Rockwell Center

Makati City, Philippines

www.nestle.com.ph