Nestlé Vietnam grows with local consumers
Nestlé Vietnam grows with local consumers
As Vietnam moves towards urbanisation, nutrition, health, and wellness have become a top priority for local consumers. Ganesan Ampalavanar, CEO of Nestlé Vietnam, talked with VIR’s Nam Phuong about how the Swiss giant contributes to the Vietnamese food industry and changing consumers’ needs.
Can you tell us some of Nestlé’s achievements from Vietnam last year? How has Nestlé contributed to Vietnam’s economic growth?
We can proudly say that 2018 has been a very good year for us, as many of our business achievements are above industry average. In 2018, we have expanded our business, notably through a new Nescafé Dolce Gusto factory in the southern province of Dong Nai. The factory will process an expected amount of 2,500 tonnes of coffee per year, using high-quality coffee beans from Vietnam. We believe that this volume will increase in the coming years.
To us, growth is very important because it allows us to contribute directly to the Vietnamese economic development. For example, Vietnam is the world’s second largest producer of coffee and Nestlé happens to be the biggest buyer of Vietnam’s coffee products, with an annual purchase volume of 20-25 per cent of the total coffee production output.
With growth, we will be able to continue buying a substantial amount of agricultural products in Vietnam, and contributing to other aspects of the Vietnamese society.
In 2018, we were also proud to receive a certificate of merit for excellent tax compliance. We are among the top 100 taxpayers in Vietnam, and tax transparency is at the core of our business.
In Vietnam, we have a large portfolio that can meet different consumer needs and target groups. Our five biggest brands here in 2018 were Milo, Nescafé, Maggi, NAN, and the Nestlé brand itself. We believe in building the business in continuous small steps, and within these five umbrella brands, we are proud to have more product line-ups that can meet the needs of consumers.
Nestlé is also an active participant in Vietnam’s social development. What are the most notable programmes you have conducted in Vietnam so far?
We always strive to practice what we preach, reflecting our role as the world’s leading nutrition, health, and wellness company and living up to our “Creating Shared Values” motto. To us, corporate social responsibility (CSR) is not just a one-time donation to a charity – it is part of our day-to-day business. Overall, as we have pledged to be a long-term partner of Vietnam’s socioeconomic development, we have deployed various programmes in terms of rural development, nutrition, and water usage. For instance, our Nescafé Plan has helped 20,000 rural farmers in Vietnam’s Central Highlands implement the best practices of coffee farming and reduce fertiliser usage. We see this programme as a win-win situation, because farmers can get a better life and improve their income by 30 per cent, while Nestlé benefits from high-quality coffee products.
I recently took part in the Vietnam Economic Forum 2019 in Hanoi, where I talked about how the government and market participants can collaborate to ensure Vietnam’s sustainable development. Our public-private partnerships have been highly praised for enhancing Vietnam’s coffee supply chain.
In terms of nutrition, we have worked with related authorities to promote a healthier lifestyle for Vietnamese people, especially children. Our Active Vietnam programme, for example, encourages children to take part in physical activities. The Nestlé Healthy Kids programme includes a software for nutrition learning at schools, while The First 1,000 Days project offers guides to new mothers.
Last but not least, we are very mindful of our water usage in Vietnam, and our factories have no direct discharge to the environment. Our waste is treated inside the manufacturing plant and the right processes are all in place.
How is Nestlé responding to Vietnam’s changing demographics and the rising impact of technology in Vietnamese society?
Our challenge, and also opportunity, is to keep up with the increasing demand of consumers in Vietnam. We have to understand and recognise the needs of different consumer groups, because Nestlé strives to be a multi-brand, multi-channel, and multi-category business. Our goal is to offer a product portfolio that covers the entire lifep of Vietnamese consumers.
On top of that, we see a big increase in younger Vietnamese consumers, whose aspirations and expectations can be different from their parents’. Using our own research and insights, Nestlé wants to make sure that we can give them the right product with the right proposition. To add another layer of complexity, both ends of the nutritional spectrum are present in Vietnam: In rural areas, people are still not given the right nutrition to develop, and their height is still below average, while in big cities, obesity is gradually becoming a problem. So as more food is readily available in Vietnam, our mission is to provide consumers with the right nutrition and promote a healthier lifestyle.
Regarding technology, people often focus on Industry 4.0 in manufacturing and industrialisation. However, I want to emphasise that our use of Big Data, robotics, and automation extends to the commercial stream. Our sales function is already automated, and every salesman carries handheld devices to measure productivity and provide transparent data, which will help with our upstream planning.
In future years, we are digging deeper to see what these data can do for us in terms of predictive forecasting and business analytics. There is still a long way to go.
What is your plan for 2019 and the years ahead?
Our growth priority remains, and our 2019 activities will continue our long-term strategy that is set for 2017-2020. We want to introduce new products that solve new consumer needs, and CSR will always remain a big driver of our goals to create shared values. Once again, as the world’ top conglomerate in nutrition, health, and wellness, we aspire to take a holistic view of our product offers. This means we must improve our recipe to increase good nutrients, while reducing fat, sugar, and salt. At the same time, we want to promote a healthier lifestyle towards our Vietnamese consumers and Nestlé looks forward to more collaborations to fulfil this mission.
Overall, we are proud of our product quality and ensure that our products offer the best value to consumers. As Vietnam moves towards urbanisation and industrialisation, we believe that consumers should have a wide range of options for their nutritional needs. Nestlé is striving to provide the best possible choices for our consumers.
On January 17, the Vietnam Economic Forum (VEF) 2019 took place in Hanoi, chaired by Prime Minister Nguyen Xuan Phuc and head of the Party Central Committee’s Economic Commission Nguyen Van Binh.
At the high-level policy dialogue on “Private sector development and enhancing links between domestic and FDI firms,” Ganesan Ampalavanar called for concerted efforts by numerous economic sectors, based on the principle of “Creating Shared Value”.
Notably, in Ampalavanar's opinion, it is necessary to find a shared voice between policymakers and economic actors for mutual benefit and sustainable economic development.
No business can do everything on its own. Organisations are therefore required to enhance win-win co-operation with distributors, suppliers, and farmers, as well as with state-owned businesses.
As a global brand with a local identity, Nestlé Vietnam has pledged long-term investment for sustainable development across Vietnam.
The company has worked to ensure successful operations in tandem with making social contributions when doing business in the country. Ampalavanar added that the company has helped more than 20,000 coffee growers improve productivity and income by applying advanced cultivating techniques via its Nescafé Plan alone.
