UNIVERSITI TEKNIKAL MALAYSIA MELAKA

MMFU 5013
SUSTAINABLE PRODUCT DESIGN AND
MANUFACTURING

“Life Cycle Assessment - Nestlé”

NAME : MUHAMMAD WAZIR SHAFIQ BIN ARIPIN

IC NO. : 841213105217
MATRIX NO. : M051620029
COURSE : MASTER IN MANUFACTURING ENGINEERING
(INDUSTRIAL ENGINEERING)
LECTURER NAME : DR ROSIDAH JAAFAR
 ABSTRACT

This research paper through about Nestlé’s business and current product development
using Life Cycle Assessment (LCA). Four steps in LCA implement into Nestlé’s
product to ensure environmentally sustainability. First step is setup the
goal/aims/objectives. Secondly, inventory analysis. Third, impact analysis and lastly
interpretation. Nestlé’s product, Nescafé brand have life cycle in their development
from farmer/plantlet until end of life in inventory analysis. Nescafé define that their
product will be impact on three categories which are; Carbon Footprint, Water
Footprint, and Land Use. All this impact analysis will define that the product harm to
environment or not. Lastly this paper will interpretation all data in inventory and impact
analysis to resolve the environmental sustainability issues.

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 TABLE OF CONTENTS

Title Page
Abstract i
Table of Contents ii

1.0 Introduction
1.1 Introduction 1
1.2 Background of Study 2

2.0 Literature Review

2.1 Nestlé Principles of Business 3
2.2 Nestlé Product 4
2.3 Environmental sustainability in Nestlé 6
2.3.1 Sustainability hotspot 6
2.3.2 Packaging 7
2.3.3 Food loss and waste 7
2.3.4 Sustainable consumption 7
2.3.5 Natural capital 7
2.4 Life Cycle Assessment (LCA) 8

3.0 Methodology
3.1 Goal and scope 10
3.2 Inventory Analysis 10
3.3 Impact Analysis 11
3.4 Interpretation 11

4.0 Finding and Result

4.1 Objective Achievement 12
4.2 Nestlé Inventory Analysis 13
4.3 Nestlé Impact Analysis 14
4.3.1 Carbon footprint 14
4.3.2 Water footprint 15
4.3.3 Land Use 16
4.4 Interpretation 17

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 Title Page
5.0 Discussion and Conclusion
5.1 Discussion 18
5.2 Conclusion 18

Referances 19

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 CHAPTER 1

INTRODUCTION

1.1 Introduction
Nestlé history begins in 1866, with the foundation of the Anglo-Swiss Condensed
Milk Company. Henri Nestlé develops a breakthrough infant food in 1867, and in 1905
the company he founded merges with Anglo-Swiss, to form what is now known as the
Nestlé Group. During this period cities grow and railways and steamships bring down
commodity costs, spurring international trade in consumer goods (Nestlé, 2017).
During the war in 1914, the Nestlé Group had experienced cross-border trade
restrictions causing them to open a plant in the US and Australia. This is due to the high
demand for condensed milk and chocolate during the war. As a result, nearly 40 Nestlé
factories built after the war ended.
After the war military demand for canned milk declines, causing a major crisis
for Nestlé & Anglo-Swiss in 1921. The company recovers, but is rocked again by the
Wall Street Crash in 1929, which reduces consumer purchasing power. However, the
era carries many positives: the company’s management corps is professionalized,
research is centralized and pioneering products such as Nescafé coffee and Milo are
launched (Nestlé, 2017).
Nestlé Group merges with Swiss company Alimentana, which produces Maggi
soups, bouillons and seasonings, and is renamed Nestlé Alimentana. Alimentana’s
history dates back to 1884, when Julius Maggi developed a protein-rich dried soup to
tackle malnutrition.
The post-war period is marked by growing prosperity, and people in the US and
Europe spend money on machines that make life easier, such as refrigerators and
freezers. They also favor convenience foods, and Nestlé Alimentana meets this need
with new products including Nesquik and Maggi ready meals (Nestlé, 2017).
Acquisitions enable Nestlé to enter fast-growing new areas such as frozen foods,
and to expand its traditional businesses in milk, coffee and canned foods. In the 1970s
the company diversifies into pharmaceuticals and cosmetics. It starts to attract criticism
from activist groups that allege its marketing of infant food is unethical. Nestlé later
becomes one the first companies to apply the WHO code on breast-milk substitutes
across its business (Nestlé, 2017).
Following years of growth, Nestlé disposes of unprofitable brands and promotes
those that satisfy increasingly health conscious consumers, in line with its new
‘Nutrition, Health and Wellness’ ambition. The company expands in the US, Eastern

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Europe and Asia, and targets for global leadership in water, ice cream and animal food
(Nestlé, 2017).
Nestlé articulates its Creating Shared Value approach to business for the first
time, and launches its Nestlé Cocoa Plan and Nescafé Plan to further develop
sustainable supply chains in cocoa and coffee. While strengthening its position in
traditional segments, infant formula and frozen foods, Nestlé strengthens its focus on
medical nutrition (Nestlé, 2017).

1.2 Background of Study

Nestlé objective is to be the leader in Nutrition, Health and Wellness, and the
industry reference for financial performance, trusted by all stakeholders. To achieve
their objective, Nestlé develop a roadmap, which is in the roadmap focus on three
section ; Operational Pillars, Growth Drivers, and Competitive Advantages. Figure 1.1
below show the Nestlé roadmap.
Nestlé also focus on their roadmap are Compliance – Sustainability, Nestlé
Culture, Value and Principles, and Creating Shared Value.

Figure 1.1: Nestlé Roadmap (Nestlé, 2016a)

This study will be focusing on how Nestlé implementing Life Cycle Assessment (LCA)
in their product development process. Firstly, most important to known about Nestlé
principles business. After that, will looking up on Nestlé product and development
product that involve in LCA.

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 CHAPTER 2

LITERATURE REVIEW

2.1 Nestlé Principles of Business

Nestlé have ten principles of business operation with five main attributes, as a
Table 2.1 below:

Table 2.1 : Nestlé Principles of Business (Nestlé, 2010).

Attribute Principles Description
Nestlé core aim is to enhance the quality of consumers’
Nutrition, lives every day, everywhere by offering tastier and
Health and healthier food and beverage choices and encouraging a
Wellness healthy lifestyle. Nestlé express this via our corporate
proposition Good Food, Good Life.
Quality Everywhere in the world, the Nestlé name represents a
Consumers
assurance and promise to the consumer that the product is safe and of high
product safety standard.
Nestlé are committed to responsible, reliable consumer
Consumer communication that empowers consumers to exercise their
communication right to informed choice and promotes healthier diets.
Nestlé respect consumer privacy.
Nestlé fully support the United Nations Global Compact’s
Human rights Human rights
(UNGC) guiding principles on human rights and labor and
and labor in our business
aim to provide an example of good human rights and labor
practices activities
practices throughout our business activities.
Nestlé success is based on our people. Nestlé treat each
other with respect and dignity and expect everyone to
Leadership and promote a sense of personal responsibility. Nestlé recruit
personal competent and motivated people who respect Nestlé
responsibility values, provide equal opportunities for their development
Our People
and advancement, protect their privacy and do not tolerate
any form of harassment or discrimination.
Nestlé are committed to preventing accidents, injuries and
Safety and
illness related to work, and to protect employees,
health at work
contractors and others involved along the value chain.

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 Attribute Principles Description
Nestlé require our suppliers, agents, subcontractors and
Supplier and
their employees to demonstrate honesty, integrity and
customer
fairness, and to adhere to our non-negotiable standards. In
relations
Suppliers and the same way, Nestlé are committed to our own customers.
customers Nestlé contribute to improvements in agricultural
Agriculture
production, the social and economic status of farmers, rural
and rural
communities and in production systems to make them
development
more environmentally sustainable.
Nestlé commit ourselves to environmentally sustainable
business practices. At all stages of the product life cycle we
Environmental
strive to use natural resources efficiently, favor the use of
sustainability
sustainably-managed renewable resources, and target zero
The waste.
environment Nestlé are committed to the sustainable use of water and
continuous improvement in water management. Nestlé
Water recognize that the world faces a growing water challenge
and that responsible management of the world’s resources
by all water users is an absolute necessity.

2.2 Nestlé Product

Nestlé offer products and services for all stages of life, every moment of the day,
helping people care for themselves and their families. Their are portfolio includes over
2000 brands from global icons like Nescafé to local favorites like Ninho. Nestlé divide
their product into seven (7) categories of product. Each product has their own
collaboration between Nestlé and other company. Table 2.2 below show categories of
Nestlé product and their example product.

Table 2.2: Nine Nestlé Product Categories (Nestlc, 2016).

Categories Example

Nutrition and
Health Science

Milk products
and Ice cream

Powdered and
Liquid
Beverages

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 Categories Example
Prepared
dishes and
cooking aids

PetCare

Confectionery

Water

Nestlé Product Sales in 2016

19792
Sales in Million CHF

15038 14331
12148 12067
8679
7414

Nutrition and Milk products Powdered Prepared PetCare Confectionery Water

Health and Ice cream and Liquid dishes and
Science Beverages cooking aids
Product Categories

Figure 2.1: Nestlé Product Sales In 2016 (Nestlé, 2016b).

Figure 2.1 above show how Powdered and Liquid Beverages leads other Nestlé
product in sales 2016. Nescafé is the world’s favourite coffee brand, with close to half
a billion cups served daily (Nestlé, 2016a). Second highest is product from category
Nutrition and Health and Science contributed 15,038 million CHF.

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 Figure 2.2: Nestlé Product Growth (Wimmba, 2012)

2.3 Environmental sustainability in Nestlé

Since 2010, Nestlé very committed to environmentally sustainable business
practices (Nestlé, 2010). Nestlé can achieve this through pursuing greater efficiency in
resource use, and relying on and improving the environmental performance of their
foods and beverages. With their strong belief in the benefits of a more circular
economy, where practicable, Nestlé can help combat food waste, and support
individuals and families in making more informed decisions about the products they
buy. Five categories in Nestlé’s attention to ensure environmental sustainability:
i. Sustainability hotspots
ii. Packing
iii. Food loss and waste
iv. Sustainability consumption
v. Natural capital

2.3.1 Sustainability hotspots

Nestlé believe by improving the environmental impact of their foods and
beverages. We assess and optimize the environmental performance of our new and
renovated products across the entire value chain, from farmer to consumer and beyond.
This gives us a clear understanding of their life-cycle impacts (Nestlé, 2018e)

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2.3.2 Packaging
Packaging is crucial for protecting foods and beverages, preventing food waste,
and providing important information for individuals and families. Nestlé work to
optimize their packaging to minimize resource use; use more materials from sustainably
managed renewable resources; support initiatives to recycle or recover energy from
used packaging; and use recycled materials wherever there is a clear environmental
benefit and it is appropriate (Nestlé, 2018c)
Nestlé have supported the Product Environmental Footprint project, helping the
European Commission develop category rules for packed water and pet food. Nestlé
conducted a pilot study of Purina ONE to determine how best to engage customers
about sustainable purchasing decisions. A second phase focused on how best to
communicate these results to individuals and families, which we tested using both
Purina ONE and Nestlé Waters Vittel bottled water. (Nestlé, 2018d)

2.3.3 Food loss and waste

Nestlé also focusing in reducing food loss and waste. Their led in the development
of the Food Loss & Waste Protocol, on behalf of the Consumer Goods Forum (CGF),
and piloted its Food Loss and Waste Accounting and Reporting Standard in our dairy
supply chain in Pakistan (Nestlé, 2018d)
Around 30% of the food produced for human consumption is wasted along the
value chain, resulting in social, environmental and economic costs. These range from
unnecessary water use, GHG emissions and risks to food security to an avoidable
financial burden borne by individuals and families, farmers and businesses (Nestlé,
2018a)

2.3.4 Sustainable consumption

At Nestlé, their confident that their well placed to share product information that
helps everyone make more sustainable choices. Nestlé can encourage people to recycle
more, lower their energy consumption and reduce their use of resources (Nestlé, 2018f)

2.3.5 Natural capital

To remain sustain in their business, Nestlé preserving habitats and enhancing
biodiversity. As the source of many of our raw materials, our long-term success depends
on maintaining the health of natural capital, particularly land, soil, trees and water. We
seek to act as a responsible steward of natural resources, particularly in terms of water
preservation, working to eradicate deforestation from our supply chain, and improving
soil management and biodiversity conservation (Nestlé, 2018b).

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2.4 Life Cycle Assessment (LCA)
Life cycle assessment (LCA) also called Life-Cycle Analysis is a tool for
examining the total environmental impact of a product through every step of its life
from obtaining raw materials all the way through making it in a factory, selling it in a
store, using it in the workplace or at home, and disposing of it (Roisin, 2008).
Environmental inputs and outputs refer to demand for natural resources and to
emissions and solid waste. The life cycle consists of the technical system of processes
and transport routes used at, or needed for, raw materials extraction, production, use
and after use (waste management or recycling).
Life-Cycle Assessment is an objective procedure used to evaluate the
environmental impacts associated with a product’s entire life cycle, through the
quantitative determination of all exchange flows between the product system and the
ecosphere in all the transformation processes involved, from the procurement of
materials (these may be recycled instead of new) to their end for this product.
Four steps in a life cycle assessment:
i. Goal and scope
ii. Inventory Analysis
iii. Impact Analysis
iv. Interpretation

Figure 2.3 Adaptation of LCA’s stage/step according to ISO 14040 (Roisin, 2008).

In defining the scope of an LCA study, the following items shall be considered
and clearly described:
i. the functions of the product system, or, in the case of comparative studies,
the systems
ii. the functional unit
iii. the product system to be studied
iv. the product system boundaries
v. allocation procedures
vi. types of impact and methodology of impact assessment, and subsequent
interpretation to be used
vii. data requirements
viii. assumptions

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 ix. limitations
x. initial data quality requirements
xi. type of critical review, if any
xii. type and format of the report required for the study

The scope should be sufficiently well defined to ensure that the breadth, the depth
and the detail of the study are compatible and sufficient to address the stated goal. LCA
is an iterative technique. Therefore, the scope of the study may need to be modified
while the study is being conducted as additional information is collected.

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 CHAPTER 3

METHODOLOGY

3.1 Goal and scope.

Nestlé setup the goal or objective for each category that them involve ensuring
environmental sustainability. Table 3.1 below show their objective.
Table 3.1 Nestlé Environmental Sustainability Objective.(Nestlé, 2018d)
Objective
i. Sustainability hotspots By 2020: Identify, update and address the
sustainability ‘hotspots’ for 20 product categories.
ii. Packing By 2017/By 2020: Continue to systematically analyse
and optimise our packaging portfolio, avoiding the
use of at least 100 000 tonnes of packaging material
from 2015 to 2017 and at least 140 000 tonnes from
2015 to 2020.

By 2020: Drive alliances with relevant stakeholders

to address packaging waste management and marine
littering in 10 relevant markets.
iii. Food loss and waste Ongoing: As a member of Champions 12.3,
accelerate progress towards halving food waste by
2030.

By 2020: Achieve zero waste for disposal in our sites.

By 2020: Make date labels understandable to our

consumers to reduce food waste at consumption
stage.
iv. Sustainability By 2020: Improve the availability and consistency of
consumption fact-based environmental information for consumers
on our digital and other channels.
v. Natural capital By 2020: 70% of the volume of our 12 priority
categories of raw materials has been assessed against
our Responsible Sourcing Guideline (RSG)
requirements and is compliant, or improvement plans
to preserve natural capital are ongoing.

3.2 Inventory Analysis

Inventory analysis involves data collection and calculation procedures to quantify
relevant inputs and outputs of a product system. These inputs and outputs may include

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the use of resources and releases to air, water and land associated with the system.
Interpretations may be drawn from these data, depending on the goals and scope of the
LCA. These data also constitute the input to the life cycle impact assessment. The
process of conducting an inventory analysis is iterative. As data are collected and more
is learned about the system, new data requirements or limitations may be identified that
require a change in the data collection procedures so that the goals of the study will still
be met. Sometimes, issues may be identified that require revisions to the goal or scope
of the study.

3.3 Impact analysis

The impact assessment phase of LCA is aimed at evaluating the significance of
potential environmental impacts using the results of the life cycle inventory analysis.
In general, this process involves associating inventory data with specific environmental
impacts and attempting to understand those impacts. The level of detail, choice of
impacts evaluated and methodologies used depends on the goal and scope of the study.
This assessment may include the iterative process of reviewing the goal and scope
of the LCA study to determine when the objectives of the study have been met, or to
modify the goal and scope if the assessment indicates that they cannot be achieved.
The impact assessment phase may include elements such as, among others:
i. assigning of inventory data to impact categories (classification)
ii. modelling of the inventory data within impact categories
(characterization)
iii. possibly aggregating the results in very specific cases and only when
meaningful (weighting).

3.4 Interpretation
Interpretation is the phase of LCA in which the findings from the inventory
analysis and the impact assessment are combined together, or, in the case of life cycle
inventory studies, the findings of the inventory analysis only, consistent with the
defined goal and scope in order to reach conclusions and recommendations.
The findings of this interpretation may take the form of conclusions and
recommendations to decision-makers, consistent with the goal and scope of the study.
The interpretation phase may involve the iterative process of reviewing and revising
the scope of the LCA, as well as the nature and quality of the data collected consistent
with the defined goal. The findings of the interpretation phase should reflect the results
of any sensitivity analysis that is performed.
Though subsequent decisions and actions may incorporate environmental
implications identified in the findings of the interpretation, they lie beyond the scope
of the LCA study, since other factors such as technical performance, economic and
social aspects are also considered.

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 CHAPTER 4

FINDING AND RESULT

4.1 Objective achievement

Nestlé setup the goal or objective for each category that them involve ensuring
environmental sustainability. Table 4.1 below show their objective.

Table 4.1 Nestlé Environmental Sustainability Objective Achievement.

(Nestlé, 2018d)
Objective Achievement
i. Sustainability By 2020: Identify, update and By the end of 2017 Nestlé
hotspots address the sustainability assessed and addressed the
‘hotspots’ for 20 product sustainability hotspots for 22
categories. product categories.

By the end of 2017, Nestlé

evaluated 7005 projects and
20 608 scenarios using eco-
design tools, since the
introduction of eco-design
software a decade ago.
ii. Packing By 2017/By 2020: Continue 22 558 tons of packaging
to systematically analyze and avoided since 2015, saving
optimize our packaging CHF 29.3 million.
portfolio, avoiding the use of
at least 100 000 tons of Four markets covered by
packaging material from ongoing projects and
2015 to 2017 and at least 140 collaborations.
000 tons from 2015 to 2020.

By 2020: Drive alliances with

relevant stakeholders to
address packaging waste
management and marine
littering in 10 relevant
markets.
iii. Food loss and Ongoing: As a member of We have continued to reduce
waste Champions 12.3, accelerate waste for disposal in our
progress towards halving factories.
food waste by 2030.

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 Objective Achievement
By 2020: Achieve zero waste 253 of our factories achieved
for disposal in our sites. zero waste for disposal in
2017.
By 2020: Make date labels
understandable to our 217 office, R&D and
consumers to reduce food distribution centers also
waste at consumption stage. reached zero waste for
disposal, which makes a total
of 470 sites globally.

Reduced waste for disposal

per ton of product by 88%
since 2007.
iv. Sustainability By 2020: Improve the Through our corporate
consumption availability and consistency websites alone, we provide
of fact-based environmental environmental information in
information for consumers on 127 countries. Packaging and
our digital and other brand websites provide
channels. additional information.
v. Natural capital By 2020: 70% of the volume 57% of the volume of 12
of our 12 priority categories priority categories is
of raw materials has been Responsibly Sourced.
assessed against our
Responsible Sourcing
Guideline (RSG)
requirements and is
compliant, or improvement
plans to preserve natural
capital are ongoing.

Regarding from the result, Nestlé on track in objective achievement and have a
certain objective have been achieved.

4.2 Nestlé Inventory Analysis

Nestlé very proud of their product’s quality and believe that it is strongly linked
to respect for the environment. Nestlé made an inventory analysis input and output
starting with agriculture, raw material, processing, packaging, distribution, consumer,
and recovery.

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 Figure 4.1 Inventory Analysis For Nestle Product. (Gueye, 2016)

4.3 Nestlé Impact Analysis

In the case of Nescafé, this looks at the full life-cycle from plantlet to end of life,
and assesses the environmental performance of all our activities across the value chain.

Figure 4.2 Nescafé process impact on environment.(Nestlé, 2018d)

Nestlé have been setup their inventory will be impact on three major section
which are, Carbon footprint, Water footprint and Land Use.

4.3.1 Carbon footprint

The carbon footprint represents the quantity of greenhouse gases (GHGs)
generated along the coffee value chain that influence global warming. The carbon

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footprint is expressed in kg CO2 equivalent and measures GHG emissions over the
entire life-cycle of a cup of coffee.
The largest contribution to the carbon footprint of a cup of Nescafé comes from
growing coffee through the production and application of agrochemicals, and from
deforestation. The second largest aspect is the consumer use stage, which is dominated
by the energy used through cup washing, beverage preparation and any extra water
boiled.

39%

11%

11%
2%

37%
Figure 4.3 Contribution to Carbon Footprint

4.3.2 Water footprint

Water resource depletion (also known as water scarcity footprint) is a measure of
water consumed from natural systems, considering whether the region is under stress
due to lack of freshwater. The water footprint is measured in cubic meters of water
equivalent.
The irrigation of coffee trees is the biggest driver of water resource depletion
associated with a cup of Nescafé. Other contributors to water resource depletion include
the water used to make a cup of coffee, any extra water boiled and the washing up of
the coffee cup and equipment.

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 40%

7%
3%
1%

41%
Figure 4.3 Contribution to Water Footprint

4.3.3 Land use

The use of land for agriculture and infrastructure reduces the quantity and quality
of the natural environment. Soil loss is related to use and conversion by activities such
as agriculture, roads and housing.
The impact on land use of a cup of Nescafé is dominated by the agricultural land
used for coffee cultivation.

88%
1%
1%
1%

10%
Figure 4.3 Contribution to Land Use

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4.4 Interpretation
There some solution from inventory analysis and impact analysis for Nestlé
(Nescafe Product) continues sustain.
Solution
Agriculture i. Training farmers in agriculture techniques
(including irrigation)
Raw Material ii. Distributing high-yielding drought resistant
coffee plantlets
Processing i. Zero waste for disposal
ii. Reduced water withdrawal and greenhouse
gases (GHG) emissions.
iii. Spend Coffee grounds used as a factory fuel
Packaging i. Development of materials made from
responsibly managed sources and with
improved environmental performance.
ii. Design for recovery
iii. Eco design
Distribution i. Alternative modes of transport and reduce
journeys to reduce GHG emissions.
Consumer i. LCA communication tools to encourage
customers to compare energy and water use
of different machines, cups and types of
coffee.
ii. Online courses developed Nestlé
Professional for hospitality and food service
customers on waste management, including
food loss and waste
iii. An efficient and cost-saving machine due to
a better idle and an energy-saving mode
Recovery i. Tool created by Nestlé Professional to help
providers understand environmental impact
of serving coffee to customers and offers
practical suggestions for waste disposal.

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 CHAPTER 5

DISCUSSION AND CONCLUSION

5.1 Discussion
Nestlé has made a lot of strides in reducing the environmental impact of its
operations. However, going forward, the company needs to increase focus on the first
and most important stage of its supply chain – production. The future of the entire coffee
industry is at stake and focusing primarily on reducing Nestlé’s gas emissions, while a
worthwhile venture, will not be enough to save it. Nestlé must invest more in research
and development, to help improve the quality of coffee bean production. There are
opportunities to partner with other food and beverage companies, or with organizations
such as World Coffee Research which conducts research to develop new genetic
varieties of coffee that will be more resilient to extreme temperatures.
The company may also need to consider opportunities to help coffee farmers earn
more revenue on their harvests. New competitors entering the market are willing to pay
farmers more, and Nestlé may lose some suppliers to companies such as Thrive which
essentially eliminates the middle man in the supply chain (distributors, wholesalers and
retailers) by buying directly from the farmers and selling directly to consumers.

5.2 Conclusion
According to estimates from Rabobank International, 2017 is gearing up to be the
fourth consecutive year of coffee deficit. The price of green coffee continues to stay
relatively low despite increasing costs to produce and depleting supply. Can Nestle
afford these increasing costs to make coffee available to consumers? Will Nestle be
forced to increase the price of their coffee, and how will that affect demand?
Many coffee farmers have begun to diversify their farmland to ensure that they
can make a stable income to offset the loss of income due to decreased yield as a result
of global warming. How did that affect already dwindling supply and what role can
Nestle play in mitigating this?

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