Nestlé is set to initiate a strategic alliance with The Yield Lab Latam, an expert venture capital fund that specializes in investing in technology-oriented startups throughout Latin America.
The primary objective of the fund is to provide financial support to budding businesses in the agri-food industry, particularly those seeking innovative technology solutions for food production and advancements in agricultural methods.
Its vision is to foster collaboration among investors, start-ups, corporations, farmers, the public sector, and research organizations, with the ultimate goal of promoting the sustainable transformation of this vital industry.
Nestlé has made a significant investment commitment to The Yield Lab Latam from one of its dedicated funds that specifically supports start-ups and organizations operating in two important areas. Firstly, it aims to promote packaging solutions and develop recycling infrastructure that contributes to the establishment of circular economies. Secondly, it seeks to facilitate the transition of the food sector towards regenerative agriculture practices.
The exact financial investment made by Nestlé, the maker of KitKat chocolate and Maggi sauce, in this venture has not been disclosed.
Maxence de Royer, Vice President of strategy, business development and ESG for Nestlé in Latin America, said, “The investment from Nestlé and the partnership with The Yield Lab Latam will help us progress on finding sustainable solutions for the food industry.
“Investing in technological innovation in the agri-food sector and drawing on the energy and creativity of start-ups can help meet common goals such as reducing emissions and increasing biodiversity. This complements our own research work in the area, for example through our new Institute of Agricultural Sciences.”
Santiago Murtagh, Managing Director of The Yield Lab Latam, said, “The relationship with Nestlé reflects the common vision of committing ourselves and the food production ecosystem to jointly help address the challenges of the industry.
“We are leveraging our proximity to local entrepreneurial talent and the reach of our network of innovation centres. From this local position and the regional experience of having invested in seven Latin American countries, we can act as a bridge between investors in the food industry and innovative solutions for the sustainable production of healthy, nutritious, safe and accessible food for the next generations.”
Nestlé has expressed its dedication to reducing its carbon footprint in the Latam region across its supply chain and operations. One significant area of focus for the company has been the adoption of regenerative agriculture practices, particularly within the dairy supply chain. Nestlé has already initiated over 80 projects spanning across 11 countries in pursuit of this objective.
These projects are believed to possess the potential to not only mitigate greenhouse gas emissions but also restore natural resources.
Founded in 2017, Yield Lab Latam operates with offices located in Argentina, Brazil, Chile, and Mexico. As a member of The Yield Lab network, a consortium of venture capital firms headquartered in St. Louis, Missouri, in the United States, it benefits from a wider network and expertise.
In February of the previous year, Nestlé established its Institute of Agricultural Sciences, aiming to “transform innovative agricultural science into practical applications and identify the most auspicious agricultural technologies.”
The institute directs its attention towards plant science, dairy livestock, and agricultural systems science, aiming to “evaluate and integrate science-backed solutions for enhancing the nutritional and sensory attributes, as well as the environmental footprint, of agricultural raw materials.”
When the institute was launched, Stefan Palzer, Nestlé’s CTO, said, “The new institute will accelerate the translation of science into concrete solutions that can be implemented at farm level, to support farmers globally in improving their environmental footprint, in reducing food and nutrient losses, and in better adapting to climate change while ensuring the quality of the raw materials they produce.”
Additionally, the company has implemented sustainable cocoa and coffee sourcing initiatives known as the Nestlé Cocoa Plan and the Nescafé Plan.
According to Nestlé, it commits CHF 1.7 billion ($1.86 billion) per year to research and development investments.
In April, the European Union (EU) took a significant step by introducing a ban on products associated with deforestation, which will have repercussions for suppliers of cocoa and palm oil.
The European Parliament, the legislative body of the European Union (EU), has decreed that companies can only sell products within the EU if their suppliers provide a due diligence statement. This statement confirms that the products are not sourced from deforested areas or have contributed to forest degradation since December 31, 2020.
