Inside Nestlé's Sustainable Supply Chain Dairy Plan

Dairy supply chains face pressure from multiple directions. Emissions targets, climate variability, labour availability and cost inflation all affect how milk reaches processors and consumers. Food manufacturers that rely on dairy ingredients must manage these factors while maintaining product quality and volume.

Nestlé employs more than 270,000 people and operates a portfolio of more than 2,000 brands. The company was founded in 1866. Many of its products contain dairy ingredients.

The company has published its first Dairy Plan. According to Nestlé, the plan details how it works with 130,000 dairy farmers and more than 200 suppliers. The document connects climate action, farmer income, animal welfare, nature protection and quality standards.

Supply chain resilience model

The plan forms part of Nestlé's net zero roadmap. It targets greenhouse gas reductions, regenerative agriculture expansion, farmer livelihood support, animal welfare improvements and ecosystem protection across the dairy value chain.

"The Dairy Plan shows that productivity, quality milk and sustainability are closely connected and can positively reinforce each other. Through our collaborative approach across the dairy value chain, we are working to advance this change," says Katja Seidenschnur, Nestlé's Head of Sustainability for the Nutrition & Health business.

"Together with farmers, we are deploying innovative solutions and technologies that help them build resilience to climate change and economic pressures, develop skills to run their farms as businesses and improve their livelihoods."

"These practices are also supporting Nestlé's long-term access to high-quality milk and milk ingredients – crucial for the production of the nutritious products across our portfolio."

Procurement and traceability systems

Nestlé sources dairy through two channels. Dairy derivatives such as milk powders, whey and lactose come from cooperatives or suppliers. Fresh milk is sourced directly from farmers before processing in Nestlé factories.

The company applies its Responsible Sourcing Core Requirements and due diligence processes to monitor how ingredients are produced. Strategic suppliers include Fonterra, Sodiaal Euroserum, Lactalis, Agropur, Land O'Lakes and FrieslandCampina.

Nestlé works with these dairy businesses to develop efficiencies, low-emission solutions and regenerative agriculture practices. Traceability systems track ingredients from farm to factory.

"Nestlé remains a company where science meets nutrition," Serena Aboutboul, Head of Nutrition & Health Strategic Business Unit at Nestlé, explains in the plan's introduction.

"Dairy is an important source of nutrition for young and old alike, providing essential nutrients that support growth, development and healthy longevity."

Emissions reduction across operations

According to Nestlé, dairy represents one of its largest agricultural emissions sources. The company reported a 26% net greenhouse gas emissions reduction in its dairy supply chain in 2025 versus its 2018 baseline.

The company attributes this to interventions in feed composition, precision feeding methods, regenerative agriculture, manure management and methane reduction technologies. Examples include biodigesters in India, a net zero pilot farm in New Zealand and a Dutch programme aiming for a 50% lower milk footprint by 2030.

"Dairy-based products are a central part of our portfolio and that means we need to source milk and milk derivatives responsibly. This includes working with partners and communities on topics like farmer incomes, climate change, animal welfare and nature. We see all these challenges as being highly interconnected. Therefore, the Nestlé Dairy Plan pulls together expertise from across the company and beyond to approach them in a comprehensive and holistic manner," says Serena.

The report states that milk quality begins on the farm. Soil health, herd health, feed quality and climate conditions all affect outcomes.

Value chain risk mitigation

"The Nestlé Dairy Plan is the embodiment of Creating Shared Value: supporting supply continuity, mitigating risk, and delivering benefits to stakeholders," says Antonia Wanner, Chief Sustainability Officer at Nestlé.

"When things are done well, everyone stands to benefit – the farmer who has improved their income or is on firmer ground when challenges arise, Nestlé, which has access to high quality ingredients, and the environment, because of the resource-efficient, nature-based approach to agriculture we are promoting. By working at a systems level with carefully selected partners, we can help the sector transform."

The company positions the plan as a method to make supply chains more reliable and better able to handle disruptions. According to Nestlé, the approach could lower risk while maintaining access to quality ingredients at scale.