Global food manufacturers including Nestlé and Mars are driving a major shift in the dairy supply chain, steering suppliers towards regenerative agriculture practices in response to corporate climate and reporting goals.
Processors say the momentum is coming from industrial buyers rather than supermarket consumers in the New Zealand dairy industry. These multinational food companies are setting strict sustainability conditions in their contracts, aiming to meet targets for net zero greenhouse gas emissions by 2050 and comply with Scope 3 reporting rules that account for emissions “embedded in product inputs.”
Nestlé, which describes milk and dairy ingredients as its largest raw material by volume, has committed to sourcing 50% of its key ingredients from regenerative farms by 2030.
The company has already surpassed its interim milestone, reaching 21.3% in 2024 through a network of more than 150,000 farmers across 25 countries.
Companies including Fonterra, Lactalis and Synlait are working through the Sustainable Agriculture Initiative (SAI) Platform to standardise these efforts, a network of over 190 members. The SAI Platform defines regenerative agriculture as “an outcome-based approach that protects and improves soil health, biodiversity, climate, and water resources, while maintaining or improving farmer livelihoods.”
Nestlé has backed its commitments with US$2.61 billion over five years, funding premium payments to farmers, pilot programmes, and research. It is supporting the country’s first commercially viable “Net Zero” dairy farm with Fonterra and Dairy Trust Taranaki, targeting a 30% reduction in emissions intensity by 2026–27.