Distribution

   
Bottled distribution

Optimizing Distribution

Environmental impacts in the distribution phase have remained stable over the reporting period (+3% and +2% from 2008 to 2013) for GHG emissions and non-renewable energy). Of the areas covered in our GEF tool, the main impact of this phase is domestic transport from factory to customers. It is important to note that cooling of Home and Office fountains is quite a significant variable in this specific channel.

Transport has always been a key consideration for the bottled water business model. At Nestlé Waters, we have built significant expertise due to our longstanding experience in supply chain management. As a result, our logistics and delivery programs are amongst the most efficient in the consumer goods sector.

Nestlé Waters has continued exploring opportunities to further reduce our distribution footprint., new initiatives have been launched throughout our organization. Some of these success stories are detailed in the following pages, highlighting new opportunities in the next few years. Today, the Nestlé Waters’ transport policy focuses on the following five key areas:

  • Reducing distance to consumers
  • Using alternative transport
  • Exploring new technologies
  • Optimizing payload
  • Working with our carriers

Evolution of ghg emissions and non-renewable energy for distribution

Reducing Distance to Consumers

Because the bottled water industry involves large volumes of product, transport is a primary consideration and, therefore, the vast majority of our business is locally focused. In 2013, 95% of Nestlé Waters’ production was sold in its country of origin. Globally, between 2008 and 2013, the average distance traveled from factory to customers has remained stable, at approximately 450 km. Nestlé Waters encourages direct shipping (i.e. no intermediary storage) from factory to customers to limit transport distance. In 2013, 80% of our products were shipped directly to customers.

Bottling operations are located in the immediate vicinity of the water sources. While distance is an important economic and environmental consideration, the bottled water industry has limited flexibility in choosing the location of its sources and factories. This is particularly true for natural mineral or spring sources, which require stringent requirements, guaranteeing consistency of its original and natural composition. These unique sources are typically located outside of urban centers.

The NESTLÉ PURE LIFE model is introducing opportunities to reduce the distance to consumers.

NESTLÉ PURE LIFE is a global multi-source model providing safe and affordable drinking water, adapted to local preferences. The water can be purified utilizing several treatments in order to comply with our stringent product quality requirements. Compared with natural mineral waters, prepared waters offer a wider range of opportunities for exploring new water resources, in particular to settle our factories closer to populated areas.


Using Alternative Modes of Transport

At Nestlé Waters, we explore all economically-feasible opportunities to divert an increasing share of our transported tonnage from roads.

Use of boats for our imported international brands:

Perrier and San Pellegrino: 93% (2013 – US)

Acqua Panna : 94% (2013 – NA)

Use of trains for our imported brands :

San Pellegrino in Germany: we have increased our use of trains by 48% since 2009.

Decreasing CO2g/liter emission :

Acqua Panna in Belgium: we have decreased the emission of C02g/liter by 44% since 2009 thanks to the use of trains.


Exploring New Technologies

Nestlé Waters carefully follows the development of any new technologies that would improve environmental performance for any given mode of transport. In particular, our Home and Office businesses in North America have initiated pilot projects to replace their regular truck fleet with hybrid trucks (gasoline and electric engines). This transition is expected to accelerate in future years as the technology improves and our current delivery trucks are replaced.


Optimizing Payload

Payload is one of the areas of the distribution phase where we have found opportunities to reduce our environmental footprint. Local regulations define the maximum allowable weight of the final product that can be loaded onto a truck. Based on current limitations, Nestlé Waters has actively worked to optimize the ratio between our actual load and the authorized allowance to reduce the environmental impact of transport per liter. As a result, the worldwide average road payload has been increased by 4% from 2009 to 2010, reaching 23.1 tons of finished product per truck. We also believe that increasing payload regulatory limitations can be very beneficial in order to decrease the number of trucks on the road, thereby reducing the environmental impacts per liter transported.


Working with Suppliers

We favor long-term partnerships with carriers and include environmental criteria in the supplier selection process. The most recent trucks (such as Euro4, Euro5, Euro 6) have benefited from significant improvements to reduce fuel consumption and emissions versus older generations. Consequently, we also pay close attention to the environmental performance of partner/supplier vehicle fleets. Despite this on-going work to improve vehicle performance, we continue to utilize national average truck efficiency statistics in our environmental performance calculations. We are working with suppliers to progressively incorporate actual carrier data in order to more accurately reflect our selective truck policy. Once this has been implemented, we expect a further reduction in our accounting of Nestlé Waters’ transport impacts.