Nestlé Vietnam setting sights higher

May 10, 2021 | 08:00
Nestlé Vietnam has been awarded the Vietnam National Gold Quality Award 2019-2020, highlighting the corporation’s vision, leadership, and strong business performance in the past year. Binu Jacob, managing director of Nestlé Vietnam shared with VIR’s Tom Nguyen how the comprehensive business evaluation award fits flush with the companies development orientations so far and future plans to be the leading sustainable “glocal” company in Vietnam.

Nestlé Vietnam recently won the National Gold Quality Award in its very first year of participation. What does this award represent in your evaluation?

1543 p17 nestle vietnam setting sights higher
Binu Jacob, managing director of Nestlé Vietnam

We are particularly proud of this award because it is an end-to-end business excellence award that was built on criteria covering all aspects of business, from a company’s leadership through its business strategy, people development, and consumer relations to actual business results.

This is the most comprehensive award in Vietnam, and it fills us with pride that we were selected as the only multinational food and beverage corporation among a line-up of mostly Vietnamese companies.

The National Gold Quality Award was compiled based on extremely comprehensive criteria, which happened to be fully in line with our strategy to be the leading sustainable glocal [a portmanteau of “global” and “local”] company in Vietnam. We strive to lead in all aspects: in growth, in thought, and being the first in the market to do new things.

In addition, we take care to ensure sustainability and support the planet in everything we do while leading the market in all sustainability initiatives. For instance, last December we launched the new La Vie prestige bottles that are made from 50 per cent recycled PET.

Last, but not the least, we are going glocal by bringing the best of global technologies and resources to support the local communities in Vietnam. We are constantly looking for ways to bring our global competencies to bear in the local context.

The National Gold Quality Award fits perfectly with this vision and it is a recognition as a glocal company that reinvests in Vietnam.

Doubtless, the handling of the COVID-19 pandemic has played a great part in the awards and your business performance. With the latest outbreak in Vietnam, how is Nestlé Vietnam preparing to tackle upcoming issues?

Now, like before, we start each day with a 30-minute telecall with our COVID-19 Prevention Taskforce to take stock of the situation and to get the latest updates on employees’ health and safety conditions.

Since the last lockdown, much of the work is on autopilot now: the team is prepared to react to any situation. Our people know what the right thing to do is in a crisis and waste no time in seeking approval. We have empowered our people to act and they are confident to step up, even at the lowest levels.

At the same time, just like during the previous lockdown, we are taking care to keep our suppliers and retailers afloat and stand ready to offer similar levels of support if the pandemic gets out of control. We were one of the first companies when the COVID-19 occurred in Hai Duong to react almost instantaneously to support local communities with donations of tens of thousands of food and water products.

This resilience and the continuity of our operations has led far more countries to rely on us for supplies than before, significantly increasing our export operations. Now Nestlé Vietnam not only services the domestic market but also international markets. At present, our “Made in Vietnam” products have been exported to some 25 countries around the world.

The improved reputation of Nestlé Vietnam translated into a 20 per cent growth in exports in the past year, driven by new products for export to Thailand and the Philippines. Are there any similar moves on the cards?

While many of our factories were affected in the world, Vietnam was one of the countries where we could maintain 100 per cent of our production without issues. Thankfully we are producing a variety of products here and so many countries have approached us for support.

This success has earned Vietnam a worldwide reputation as a reliable source market and now more and more countries are turning to us. Even the production of Nescafé Dolce Gusto capsules for export to Japan, the market with the highest quality standards in the world, have been moved from Europe to Vietnam – and slowly but surely we are receiving more orders from Japan.

You are also looking back on your very first year at the helm of Nestlé Vietnam. After a particularly stormy beginning, in what direction are you taking the corporation?

I arrived to Vietnam just for the country to go into lockdown as soon as I landed. To react to the pandemic, I came out with what we call Project STORM, a strategy to thrive during COVID-19. I arrived here from China, where we had already seen the outbreak, so I had some experience and knew to prepare for a long fight.

Project STORM has five priority areas, protecting our people, working with customers and distribution partners to make sure our products were available, ensuring our supply chain, supporting communities, and making sure that we remain financially viable.

Looking back on the past year, I feel we did relatively well: we did not lose a single day of production, helped our partners stay afloat, and supported our communities. In the last year, we have received more recognition from the government than in any year before.

Building on this success, we have crafted our plans for the next five years as a continuation of our legacy but also a step towards newer, more ambitious goals. There are several great things Nestlé Vietnam has done in the past which we are committed to keep. For instance, our emphasis on people will never change. We will also continue to enhance the agility of our operations and our factories.

However, there are three areas where I feel there is room for growth, such as consumer-centric innovation. We have done great work in the past, but moving forward, we need to adopt a more consumer-focused approach. The biggest success of Nestlé in Vietnam is Milo, which addressed a real consumer need. Mothers in Vietnam wanted to give their children nutritious milk which they enjoy drinking – and Milo met their expectations with all the goodness of micronutrients and milk plus an unrivalled signature taste. This is the kind of innovation that we want to start focusing on as it is consumer centric, differentiated, and can become big.

The second focus area is digitalisation. Today, I am confident we are at the head of the market but the pace of digitalisation will grow five-fold in the future, so we have to accelerate our efforts. Great strides have been made, for example farmers in Dak Lak have started using handheld devices to measure the quality of the soil, while buyers are starting to track where the coffee is coming from using technology – all with support from Nestlé Vietnam.

Moreover, just in the past six months our factories have developed 34 different apps to automate processes that were previously done manually, collecting vast amounts of data that is available across our operations.

The third focus area is sustainability. We are here to enhance the lives of Vietnamese people, and this includes making sure that none of the packaging we use today end up on the landfill or in the oceans. Today we are part of the problem, but we are working hard to become part of the solution.

Around 20 per cent of my time is now spent on our sustainability agenda, to harmonise efforts towards our ambitious goal that by 2025, we will take back all the plastic packaging we use by tying up with waste management companies and other relevant partners and stakeholders.

We will be the first company to eliminate the use of plastic straws when next month we move 100 per cent to sustainable-sourced paper straws for our Milo products.

We are also working to create actual demand for the collection of orphan plastics, setting off reuse and recycling efforts and kick-starting a circular economy. Nestlé is looking to lead the way as the co-chairs of the Vietnam Business Council for Sustainable Development and Packaging Recycling Organization Vietnam, leading the way and inspiring others to follow.

In 2020, Nestlé Vietnam has seen an impressive 20 per cent on-year growth in exports with strong acceleration in the Culinary product line complementing traditionally strong coffee performance.

The main driver of this growth was MAGGI, an indispensable brand from any Vietnamese kitchen across the globe, such as naturally-fermented MAGGI Soya Sauce, MAGGIA oyster sauce made from genuine oyster extract and MAGGI Bouillon.

The companies best-known products have made inroads to markets with the most stringent quality requirements such as the US, Japan, Australia, and South Korea. Meanwhile, new products cooked up in Nestlé Vietnam factories exclusively for export markets, such as the all-in-one cooking sauce for Thailand and the MAGGI Supreme Sarap cooking sauce for the Philippines, have also gained remarkable success at their target markets.

Providing a solid base to up-and-coming product lines, Nestlé Vietnam has long been the largest buyer and exporter of coffee in Vietnam. Each year, Nestlé Group purchases 20-25 per cent of Vietnam’s coffee output with an average total value of $600-700 million. Locally, all of Nestlé Vietnam’s NESCAFÉ products are made from 100% high-quality Vietnamese coffee beans and are enjoyed domestically and are exported to 25 markets for the love and joy of consumers around the world.

Rising export orders, as well as a demonstrated ability to zero-in on local tastes in foreign markets, are elevating Nestlé Vietnam’s status in the global Nestlé Group as a sourcing and export hub.

By Tom Nguyen

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional