Nestlé Mexico makes strategic $53m investment to ensure milk supply

The company says the investment will address a milk shortage by increasing the efficiency of dairy farmers’ production models.

“Mexico has a shortage in its milk supply,” ​a spokesperson told DairyReporter.com. “Considering that the world demand of milk is increasing, it is strategic for Nestlé to assure the supply in the mid to long term.”  ​

Entrepreneurial skills for dairy farmers​

Nestlé Mexico is the country's third biggest milk buyer, and has been buying milk directly from farmers since 1935.

The company says it wants to strengthen links with dairy farmers to understand the practical problems they face.

“More than 250,000 small dairy farmers in Mexico don’t have the knowledge and support to make their production models efficient, and guarantee the cost competitiveness and quality to access the formal market​,” the spokesperson said.

“When this happens, dairy farmers are exposed to unfair trade practices, that don’t guarantee the long term sale of their goods.​

“With Nestlé’s technical assistance and financial support, we have third generation producers who have experienced the benefit of security and permanent access to the market.​

“One of our commitments is inclusive agriculture, which means we will work with small farmers to help them grow with the proper knowledge to make their production sustainable. In alliance with Instituto Tecnologico de Monterrey, we will train them to develop entrepreneurial skills​.”

Production and infrastructure​

As part of the investment, Nestlé Mexico will allocate 400m pesos ($30m) to finance production and infrastructure. One of the projects is Response Inducing Sustainability Evaluation (RISE), a tool which evaluates the sustainability of milk production and then creates an action plan to improve systems.

A further 300m pesos ($23m) will be invested in providing technical assistance in the milk and whey supply chains in Mexico.

Products made by Nestle Mexico include powdered milk, sweet condensed milk, evaporated milk and dairy cream.