Can Nestle be virtuous and yet profitable?

Lausanne, Switzerland

MARK Schneider, the chief executive of the Swiss food giant Nestlé, gripped a bun-clad concoction that looked like a bacon cheeseburger but contained no actual bacon, cheese or beef. He took a bite.

It was a faux-meat, dairy-free mouthful symbolising what may be the future of the food industry. It was also a manifestation of how big corporations like Nestlé are responding to increasingly intense pressure to help fight climate change.

Vegan burgers, Mr Schneider said, are a response to rising consumer concern about the healthiness of red meat and to criticism that cattle farming is bad for the climate.

"The reason I like the plant-based so much is this is where the two kind of connect," he said at Nestlé's research and development centre in Lausanne. "There's an environmental side to it, and there's a healthy nutrition side to it."

Nestlé, the world's largest food company, is in the pincers of both trends. It makes products that permeate daily life around the globe, like baby formula, coffee, ice cream, pet food and bottled water, and activists blame it for draining aquifers, fuelling obesity with fatty and sugary foods and littering the world with plastic packaging.

The demands on Nestlé and other corporations are growing as consumers pay more attention to the environmental effect of what they eat. Agriculture accounts for more than a fifth of greenhouse gas emissions, and plastic production and incineration account for an additional 10 per cent or so. There is no way to avoid catastrophic climate change without action by the food industry.

Jolted by movements like FridaysForFuture, a global climate protest staged by schoolchildren, companies are responding in a way that sometimes feels like panic. Hardly a day goes by without a big corporation promising to install solar panels on its factory roofs, buy battery-powered delivery vehicles or finance a reforestation project in Borneo. Increasingly, being green is a commercial imperative.

But corporate history is full of cases where claims to be environmentally responsible proved to be exaggerated if not outright fraudulent. Volkswagen said in 2010 that its goal was to be the most ecologically minded car company in the world. At the same time, Volkswagen engineers were rigging millions of cars to cheat on emissions tests.

During an interview and lab tour, Mr Schneider insisted that Nestlé's commitment to the environment and public nutrition was sincere and longstanding. For example, he pointed out, Nestlé adds iron to Maggi brand bouillon cubes to address a common nutritional deficiency in Africa, where the product is a cooking staple.

"No one asked us to fortify these bouillon cubes," mr Schneider said. "It's the right thing to do."

Born in Germany, Mr Schneider, 54, earned an MBA from Harvard. Before being recruited to Nestlé in 2017, he was chief executive of Fresenius, a health care company in Bad Homburg, a city near Frankfurt, Germany. He drives a Tesla and said one of his hobbies was making vegetable drinks.

As part of a companywide campaign to reduce plastic waste, he recently volunteered to help clean up garbage along the Seine in Paris. In September, Nestlé inaugurated the Institute of Packaging Sciences in Lausanne, which has a goal to ensure that all of the company's packaging will be recyclable or reusable by 2025 and that none of it will end up in landfills or floating in the Pacific.

One of the biggest knocks against Nestlé is that it promotes obesity in places like Africa, a growth market, by getting consumers hooked on sugary and fatty foods. The company's products include Nesquik flavoured milk powders, KitKat chocolate bars and Häagen-Dazs ice cream.

"In the developing world, the sudden availability of high-calorie, sugary, fatty products has displaced traditional products," said Oliver Huizinga, head of research and campaigns at Foodwatch Germany, a watchdog group. "That is certainly one reason for the epidemic of obesity and Type 2 diabetes."

Nestlé, sensitive to the criticism, says it has already cut sugars in its products by more than a third since 2000 and will cut them by an additional 5 per cent by next year. It has set similar targets for saturated fat and salt.

Bottled water is another business where Nestlé is often on the defensive. The company owns brands including Perrier, San Pellegrino and Poland Spring. Last year, Nestlé's water business generated almost US$8 billion in sales. But in places like Florida and California, the company has been accused of contributing to the depletion of spring-fed aquifers and selling a public resource at a profit. Bottling water and trucking it to stores are considered per se wasteful in developed countries where the tap water is just fine.

On a rainy morning recently, Cédric Egger, a geological hydrologist who is Nestlé's corporate water resources manager, led a tour of the hills above the Swiss village of Henniez to demonstrate why he believes the accusations are unfair. Nestlé acquired the Henniez mineral water brand in 2008 from a family company that had owned it for a century.

"The farmers were suspicious," said Olivier Mayor, whose land is in the so-called catchment area where rain collects and then, over the course of years, seeps through underground rock to emerge at a spring near the village. "We have been here for centuries."

But Mr Mayor said Nestlé worked with him and other farmers to improve their agricultural techniques in a way that also protected the quality of the water.

Mr Schneider defended bottled water in principle, noting that sales have surpassed carbonated soft drinks. "Water is the healthiest form of hydration," he said.

He acknowledged that the company had work to do to reduce its impact on the planet. "There is the environmental side," Mr Schneider said. "We fully own up and step up to the plate when it comes to that responsibility." The vegan bacon cheeseburger is Nestlé's entry into the veggie burger arms race.

Because cattle and dairy farming are major sources of greenhouse gases, the ersatz meats have the potential to serve the twin ideals of saving the planet and making money.

"Clearly, if we want to feed a planet of 10 billion people in a few decades," Mr Schneider said, "having more plant-based alternatives and a more plant-based diet is going to be a big support." NYTIMES