How Nestlé is Battling to Cut Emissions from Dairy Suppliers

Nestlé is reframing dairy not just as a food system challenge but as a critical emissions and energy efficiency issue, with its new Dairy Plan highlighting a 26% cut in greenhouse gas output across its dairy supply chain and outlining the next phase of decarbonisation for one of its most energy-intensive agricultural inputs.

For global food manufacturers, dairy sits at the intersection of energy use, emissions and supply security. The sector must contend with methane output, climate volatility, fluctuating milk prices, labour constraints and rising input costs, all while maintaining consistent production at scale.

Established in 1866, Nestlé operates across more than 2,000 brands and employs over 270,000 people worldwide, with dairy underpinning a significant share of its product base.

Its first Dairy Plan sets out how it collaborates with 130,000 farmers and over 200 suppliers, linking emissions reduction, energy efficiency, farmer resilience and environmental stewardship.

The company positions sustainable dairy as a pathway to stabilising supply chains while reducing exposure to energy and climate-related risks.

The strategy forms part of Nestlé’s broader net zero roadmap, targeting emissions reductions, regenerative agricultural practices, improved livestock management and ecosystem protection throughout 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."

The footprint of the dairy industry

Dairy is a major source of greenhouse gas emissions within Nestlé’s operations and represents one of its most significant agricultural emissions hotspots. Methane, a potent greenhouse gas, is central to this challenge and closely linked to energy inefficiencies across livestock systems.

At the same time, dairy remains nutritionally important, meaning the objective is not reduction in output but a shift towards lower-emission, less energy-intensive production.

The plan underscores how energy flows through the dairy system begin at farm level, where soil quality, herd health, feed composition and climatic conditions directly influence both emissions and productivity.

“Nestlé remains a company where science meets nutrition,” Serena Aboutboul, Head of Nutrition & Health Strategic Business Unit, Nestlé explains in the introduction to the plan.

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

“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.”

Sourcing, supply chains and energy efficiency

Nestlé’s dairy procurement operates across two primary channels: processed dairy ingredients such as milk powders, whey and lactose sourced from suppliers and cooperatives, and fresh milk collected directly from farms for processing.

Improving traceability and production oversight is central to reducing embedded emissions.

Through its Responsible Sourcing Core Requirements and due diligence frameworks, Nestlé is working with major dairy partners including Fonterra, Sodiaal Euroserum, Lactalis, Agropur, Land O’Lakes and FrieslandCampina to enhance efficiency and deploy lower-emission technologies across supply chains.

This includes optimising feed systems, reducing energy waste and scaling regenerative practices that improve carbon sequestration and reduce reliance on energy-intensive inputs.

Decarbonising dairy systems

Dairy represents a significant opportunity for large-scale emissions reduction, particularly through improved energy management and methane mitigation.

By 2025, Nestlé reported a 26% reduction in net greenhouse gas emissions across its dairy supply chain compared with its 2018 baseline.

The company attributes this progress to interventions such as lower-carbon feed, precision feeding techniques, manure management systems and technologies designed to curb methane emissions while improving overall resource efficiency.

Examples include biodigesters in India that convert waste into renewable energy, a net zero pilot farm in New Zealand and a programme in the Netherlands targeting a 50% reduction in milk’s carbon footprint by 2030.

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