The Dairy Methane Action Alliance was launched in December 2023, with members, which include Danone, Kraft Heinz and Starbucks, committing to publicly measure and disclose methane emissions from their dairy supply chains and publish plans to reduce those emissions over time.

Nestle did not say why it was pulling out of the alliance but said it would continue working towards reducing greenhouse gas emissions, including methane, throughout its supply chains and was sticking to its net zero commitment by 2050.

Climate alliances on the back foot

The move is the latest blow to a corporate alliance seeking to limit the impact of global warming, and comes as U.S. President Donald Trump dismantles a range of climate protection initiatives. Several major banks, for example, have left the sector’s main group leading efforts to cut carbon emissions.

“Nestle regularly reviews its memberships of external organizations,” the Swiss company said. “As part of this process, we have decided to discontinue our membership of the Dairy Methane Action Alliance.”

By the end of 2024, Nestle had reduced methane emissions by almost 21 per cent compared to 2018 levels, the company said in its 2024 non-financial statement.

Methane is nearly 30 times more potent than carbon dioxide, according to the U.S. Environmental Protection Agency, making it a major focus of attempts to curb global warming.

According to the Environmental Defense Fund, which launched the methane alliance, agriculture is responsible for nearly 40 per cent of human-caused methane emissions, with the majority of those coming from livestock.

Nestle’s logo was removed from the main page of the EDF’s website, but the company’s name still appears on other pages. The EDF did not immediately respond to a request for comment.

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The Dairy Methane Action Alliance was launched in December 2023, with members, which include Danone, Kraft Heinz and Starbucks, committing to publicly measure and disclose methane emissions from their dairy supply chains and publish plans to reduce those emissions over time.

Nestle did not say why it was pulling out of the alliance but said it would continue working towards reducing greenhouse gas emissions, including methane, throughout its supply chains and was sticking to its net zero commitment by 2050.

Climate alliances on the back foot

The move is the latest blow to a corporate alliance seeking to limit the impact of global warming, and comes as U.S. President Donald Trump dismantles a range of climate protection initiatives. Several major banks, for example, have left the sector’s main group leading efforts to cut carbon emissions.

“Nestle regularly reviews its memberships of external organizations,” the Swiss company said. “As part of this process, we have decided to discontinue our membership of the Dairy Methane Action Alliance.”

By the end of 2024, Nestle had reduced methane emissions by almost 21 per cent compared to 2018 levels, the company said in its 2024 non-financial statement.

Methane is nearly 30 times more potent than carbon dioxide, according to the U.S. Environmental Protection Agency, making it a major focus of attempts to curb global warming.

According to the Environmental Defense Fund, which launched the methane alliance, agriculture is responsible for nearly 40 per cent of human-caused methane emissions, with the majority of those coming from livestock.

Nestle’s logo was removed from the main page of the EDF’s website, but the company’s name still appears on other pages. The EDF did not immediately respond to a request for comment.

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Kennedy, picked last week by U.S. President-elect Donald Trump to head the Department of Health and Human Services, said during his own presidential campaign that he wanted to “Make America Healthy Again” and called out Kellogg’s Fruit Loops cereal in an interview two weeks ago.

Nestle is the world’s biggest packaged foods group with products ranging from KitKat snacks and Nescafe coffee to Maggi noodles and Purina pet foods.

Speaking on the sidelines of Nestle’s capital markets day for investors, Steve Presley, executive vice president and chief executive officer of Nestle’s North America business, told Reuters he was “less concerned” by Kennedy’s previous comments.

“If you step back from some of the emotional issues, what he believes in is more regenerative, cleaner agriculture, which we fully believe in,” he said.

Presley said Nestle, whose U.S. brands include Nesquik drinks, Hot Pockets and Stouffer’s frozen ready meals, had worked with the current U.S. administration and would work with the next.

“We have spoken to the (Trump transition) team absolutely as one of the largest manufacturers, both from an industry perspective and to help shape the agenda in terms of how they can help create economic opportunity in the U.S.”

Packaged foods stocks – from Kellogg to Coca-Cola Co and Nestle – fell on Friday when Kennedy’s appointment was announced.

“It’s still early,” said Presley. “What was campaign rhetoric and what will move to policy?”

Presley said Nestle, which is in 97 per cent of all U.S. households, had been driving changes for years around nutrition and health.

For instance, in 2019 the Swiss group said it would give its food products ratings according to their nutritional value so customers could better gauge the healthiness of their shopping.

“So for us, is it still too early to tell? Yes. But do we believe in the idea of better agricultural practices? Absolutely. Do we believe in better nutritional product profiles in the categories? We do.”

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Products sold by companies including Nestle, Pepsico and Unilever were assessed as part of a global index published by the Access to Nutrition Initiative (ATNI), its first since 2021.

The non-profit group found that across 30 companies, the products sold in low-income countries scored lower on a star rating system developed in Australia and New Zealand than those sold in high-income countries.

In the Health Star Rating system, products are ranked out of 5 on their healthiness, with 5 the best, and a score above 3.5 considered to be a healthier choice.

In low-income countries, the multinationals’ portfolios rated 1.8 on the system. In high-income countries, where more products were tested, they were 2.3.

“It’s a very clear picture that what these companies are selling in the poorest countries in the world, where they are more and more active, are not their healthier products,” said Mark Wijne, research director at ATNI, in an interview with Reuters.

“It’s a wake-up call for governments in these countries to be vigilant,” he added.

It is the first time the index has split the assessment into low and high-income countries.

ATNI said the index was important as packaged foods are increasingly playing a part in the obesity crisis that is now a global phenomenon. More than one billion people worldwide are living with obesity, according to the World Health Organization. The World Bank estimates that 70 per cent of people who are overweight or obese live in low-and-middle-income countries.

“We have committed to grow our sales of more nutritious foods, as well as guiding people towards more balanced diets,” a Nestle spokesperson said by email, adding that Nestle also fortifies products to help close nutrient gaps in developing countries.

A PepsiCo spokesperson declined to comment. The company last year set new goals to lower sodium in its potato chips and add ingredients like whole grains into its foods.

“We acknowledge that there is always more to do, both at a business and industry level,” said Isabelle Esser, chief research, quality and food safety officer at Danone, which was the best performer in the index.

— Additional reporting by Jessica DiNapoli and Richa Naidu

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In a ruling on Tuesday, U.S. District Judge Steven Seeger in Chicago said the risk of unfair prejudice against the egg producers and marketers by showing the graphic videos was “extreme” and outweighed any minimal value in the antitrust litigation accusing them of curbing domestic supply in order to charge higher prices.

“After watching the videos, it would not take much for jurors to believe that the egg industry abuses chickens,” Seeger wrote.

Kraft and the other plaintiffs wanted to play the videos at the trial next month to bolster their claim that an industry-wide animal welfare initiative announced in 2002 was a “sham” and actually part of a broader scheme to restrain the supply of eggs.

Seeger’s ruling on the videos was among several orders he issued on Tuesday addressing the scope of what jurors will be allowed to see and hear at the five-week trial.

Kraft and the other plaintiffs, also including General Mills and Nestle, are seeking more than US$110 million in damages against United Egg Producers and other defendants, including two farms.

Lawyers for the defendants on Wednesday did not immediately respond to a request for comment.

Representatives for Kraft and the other companies either declined to comment or did not immediately respond to a request for comment.

Seeger is presiding over a case that was previously in Philadelphia federal court as part of a multidistrict litigation proceeding. Kraft’s case returned to the Northern District of Illinois in 2019.

Lawyers for Kraft and co-plaintiffs said they obtained the videos from the Humane Society of the United States. They purport to show “day-to-day operations within defendants’ facilities.”

In a court filing, attorneys for United Egg Producers and the other defendants said the videos were “surreptitiously” recorded by animal rights activists and include “highly edited footage.”

The attorneys also said the recordings were irrelevant to the plaintiffs’ claims.

Seeger said the plaintiffs’ lawyers do not need the videos to argue that the egg industry’s promotion of animal welfare was not genuine.

“After personally watching all of the videos, the court is convinced that the videos would undermine the truth-seeking function of the trial,” Seeger wrote.

— Mike Scarcella is a Reuters legal affairs reporter in Washington, D.C.

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The company announced Thursday it will start to wind down work late this year at the Nestle Professional plant at Trenton, where dehydrated dry-blend and frozen products are made mainly for the U.S. restaurant and hospitality sectors.

The plant is expected to close in stages with the first products transferring to U.S. plants in late 2021 ahead of a “full shutdown” at Trenton by mid-2022, Nestle said.

In a release, Nestle said the foodservice industry is “highly competitive” and volumes in the U.S. have “continually outpaced” Canadian volumes, meaning over 80 per cent of the Trenton plant’s annual output is now shipped to the U.S.

The Trenton plant, Nestle said, “is part of a North American manufacturing network and the U.S. foodservice factories have capacity to absorb the production.”

However, the company said it “remain(s) focused on growing the Nestle foodservice business in Canada and staking out a post-pandemic leadership position in out-of-home solutions.”

Nestle emphasized its decision “in no way reflects the performance of our dedicated team members who work tirelessly to provide the highest quality products.” Local media reports put the plant’s current workforce at about 200 people.

The Trenton plant in the previous decade underwent two upgrades, including a project to streamline operations at the site in 2010, and a 30,000-square-foot expansion in 2011 creating new lines for both frozen and dehydrated food processing. — Glacier FarmMedia Network

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Nestle Canada said June 23 it expects to break ground in September for a 26,600-square foot expansion of its London, Ont. plant with “additional buildings, increased refrigeration capacity and other services to support the new capacity.”

The two new production lines, due to be completed by 2023, are expected to generate “more capacity for future growth, resulting in incremental ingredient, packaging, and raw material supplier purchases,” the company said, noting it bought over $45 million of dairy in the area in 2020.

The expansion follows reconfigurations in 2016 to boost the London plant’s capacity and flexibility for more product lines under the Haagen-Dazs brand, which has been processed there for the Canadian market since 1985.

A $51.5 million, 9,000-square foot expansion followed in 2018 “to create more capacity for future growth of Haagen-Dazs and other popular products.”

The latest expansion “allows us to bring even more exciting and innovative products to market and continue to meet consumer demand,” Jayne Payette, Nestle Canada’s president for ice cream, said in the company’s release.

The London plant, which today employs over 800 people, is expected to “create 88 new job opportunities” as a result, the company said. — Glacier FarmMedia Network

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Known for Maggi soups and bouillon cubes, Nestle has been investing in plant-based food to make its prepared dishes unit trendier and more appealing to consumers wishing to lower their meat intake.

Made with pea protein, the new “Garden Gourmet” near-tuna — or “vuna,” as Nestle bills it — will be available in glass jars in the chilled aisle of Swiss supermarkets and can be used in salads, sandwiches and pizzas. Ready-to-eat sandwiches will also be sold in some stores, Nestle said.

Developed within nine months by Nestle’s Swiss research facilities, the tuna is the group’s first plant-based seafood product to hit the market. Soy-based burgers, mince meat, sausages and chicken nuggets are already available.

Nestle said last month that increased at-home consumption during the COVID-19 pandemic boosted demand for its Garden Gourmet plant-based products in the first half of 2020.

The group’s sales of plant-based meat alternatives reached around 200 million Swiss francs (C$289.5 million) last year.

Nestle in January announced an open-ended deal with Canadian plant-based ingredient makers Burcon and Merit Functional Foods for supplies of those companies’ pea- and canola-based plant protein products.

— Reporting for Reuters by Silke Koltrowitz. Includes files from Glacier FarmMedia Network staff.

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The company joins Nomad Foods, Premier Foods, Nestle, Mondelez and other processed food makers, which have benefited since March, when restaurants around the world closed, forcing people to eat at home.

The trend marks a bright spot for a sector that has been upended in recent years by challenger brands offering products seen as healthier or less-processed.

“In March, the company experienced an unprecedented increase in consumer demand for food at home,” General Mills said in a statement. “While the magnitude of… demand moderated in April, it remained significantly elevated compared to pre-COVID-19 levels.”

Sales of General Mills products — which include Cheerios, Progresso soups and Old El Paso meal kits — at U.S. retail stores tracked by Nielsen jumped 45 per cent in March and 32 per cent in April, the company said.

Besides basic pantry-stocking, large packaged food companies are seeing renewed strength in their traditional, classic brands, many of which have struggled to keep pace with changing tastes.

“In times of uncertainty, consumers turn to brands that they trust. They want to experiment less,” Kraft Heinz CEO Miguel Patricio said last month. “That’s what we’re seeing right now.”

A consumer survey last week by Jefferies analysts found that 38 per cent of respondents were purchasing more standard or classic brands versus only 16 per cent who were not.

Jefferies analyst Rob Dickerson said those big brands might be easier to find because their supply chains tend to be larger and more secure.

“In times of stress and duress, larger retailers are probably going to want to lean on some of their larger suppliers,” Dickerson said.

“It’s been all about the emerging brand. But all of a sudden, stuff hits the fan and when in doubt, you call on the big guys.”

Even in May and beyond, as lockdowns are lifted and eateries begin to reopen, consumers are not expected to rush out immediately, due to lingering fears about the coronavirus and soaring unemployment, which will slash household spending.

In a report last week, research firm Kelton Global found in a survey that more than 60 per cent of respondents remained afraid to go to a bar or restaurant.

Analysts at Wells Fargo estimate food-at-home sales to rise 14 per cent in 2020, and then fall five per cent in 2021.

“We suspect that between some permanent restaurant closures, lingering social distancing measures… and some stickiness to the work-from-home movement, at-home spending may not see as hard of a landing that some expect,” said Wells Fargo analysts.

Jefferies predicts an incremental boost to U.S. retail spending on food at home of around US$43 billion every three months for a period following the panic-buying that marked the early spring.

The S+P 500 Packaged Foods and Meats index is down 6.5 per cent for the year, compared to a 9.5 per cent decline for the S+P 500.

General Mills expects fourth-quarter organic net sales to increase by a double-digits percentage.

— Martinne Geller is a consumer goods correspondent for Reuters in London; additional reporting by April Joyner in New York and Nivedita Balu in Bangalore.

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Meat substitutes from plants in burgers, nuggets and many other foods are a fast-growing industry, driving up demand for crops that produce them.

Canada is among the world’s largest growers of peas and the biggest producer of canola, crops high in protein that technology companies like Burcon — a joint-venture partner in Merit — can separate and isolate for use in foods and beverages.

The agreement with Nestle is long-term, with no expiry, Burcon CEO Johann Tergesen said in an interview. Nestle will buy pea and canola proteins from a 20,000-tonne-per-year Merit plant to be built by the end of this year in Winnipeg.

Merit will process the proteins using Burcon technology under a licensing agreement.

“It’s a little bit like Christmas morning for those of us who have been doing this for 20 years,” Tergesen said.

“In the early days, I had to explain to people what protein was. Now it has been a wild ride.”

Burcon stock jumped 36 per cent in Toronto to $1.89 per share, touching its highest price in nearly three years. Nestle stock rose 0.9 per cent in Switzerland.

With the deal, Burcon expects to report its first-ever commercial revenue and profit in 2021. Terms were not released.

Nestle launched soy and wheat protein-based “Incredible Burgers” in Europe last year. The deal gives the company access to a range of ingredients for its foods and beverages, using the “unique expertise” of Burcon and Merit, Nestle chief technology officer Stefan Palzer said.

It comes after Beyond Meat this month struck a similar supply agreement with France-based Roquette, which is also building a pea protein plant about 90 km west of Winnipeg at Portage la Prairie, Man.

The new commercial demand “provides a real sense of optimism for the future,” said Gord Bacon of Pulse Canada, an industry group representing pulse farmers and processors.

“To have a diversified market base is what every group producing commodities or ingredients in Canada would hope for.”

With so much of Canada’s peas exported raw, finding enough supply to satisfy the Nestle deal will not be a challenge, said Ryan Bracken, Merit’s co-CEO. The company is already planning to expand the Winnipeg plant under construction to more than double production.

— Reporting for Reuters by Rod Nickel in Winnipeg and Silke Koltrowitz in Zurich; additional reporting by Kelsey Johnson in Ottawa.

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