♪ francine: nestle is the biggest food company in the world. the company boasts more than 2000 brands. while nestle's products transcend countries and cultures, they are often tailed test tailored to locals. take tod of ceo does it oversee such a company? we make the chairman of nestle. paul volcker, thank you so much.

if you look at the future of the food industry, what has been the biggest transformation in the last 20 years? paul: before, people were worried about having enough calories and food. that has moved completely towards having good nutrients, not too much calories. the consumer has grown into an awareness about food and health and nutrients, and it is pretty good for us because nestle had a status sheet all about nutrition, health, and wellness. knowing how nutrients interact with health and having quite a sizable r&d research, we are answering specific needs. insumers are changing knowing the supply chain behind the products they have. a little more empathy with small brands. i would say the food industry is

in one of these rapid evolutions that is very interesting for us. francine: is this because of mobile and the access to information, or something else? paul: a combination. our transparency and information, social media. people take so many photos of what they eat. also, there is awareness. the link between food and health, people are asking. we want to be serious about nutrients and food and health, and these relationships are quite new. it is amazing to know that food science per se is quite recent. minerals, we knew that calcium was good for your bones, but how does it address your micro biome? in a society that is more aware but needs more, think about the aging population and the

specific food needs of that population. how can we part -- how can we be part of active health of the consumer? if they are aware of their diet and how it impacts their life, it is a much more interesting food industry. francine: how will it change in the next 10 years? want toents and people know where their product comes from? paul: it will evolve. it will be, is that food healthy? is that heart of my quest on a healthy diet lifestyle? francine: isn't it more difficult for you guys? you need preservatives in some of these things. paul: well, i would say do not need. the supply chain can be shorter. -- you thinkrve about frozen food. it is one of the best ways of keeping all the nutrients.

you do not need preservatives. you are right to say also the consumer wants more nutrition and responsibility towards his diet. at the same time, ask also if that is possible. that brings that combination. i feel it is more challenging but more interesting. that is exactly what we want to be as a company. we started 50 plus years ago with a product that saved the life of a child. the purpose, why we exist and why we exist is enhancing the quality of life and being able to contribute to a healthier future. it was the same thing 150 years ago, it did not change, but it has many more angles to it that allows us to differentiate. francine: what is misunderstood about the food industry, a supply chains or the frozen food

business or something else? paul: perceptions, you have quite a bit of perceptions. the food industry per se, what has it done to society? you have communicable diseases which is a societal problem. the food industry as part of that equation, so we have to take responsibility. yet again, we can make an impact. i see it more from that angle. what i like about this dynamic today as it plays well in what we have set forth as the purpose of our company, research and development has so much more meaning when you start to understand and invest in understanding how nutrients impact health. we can translate that into products. we have done we exist. processes of raw material, texture, flavor, we are good at

that. in the last 20 years, we have been redefining and reformulating our products. let's reduce calories, let's reduce sugar. these are not empty words. sugar in the last 10 years by 34%. francine: that comes from the consumer side, the consumer asking for something healthier? paul: it is both our awareness and the capabilities that we invest in to do it. francine: and regulation? paul: regulation helps to frame. it is a societal issue that has to be done by all players. it is true, a push from a valuing of consumers of these elements is important. francine: what will consumers eat in 10 years? less meat? more vegetables?

paul: you will have more choice and you will have changed because you will know and understand so much more. for us to give these possible answers to your knowledge, to your request, to your worries for your diet. it will be more personalized. much charge to flavors. all of these things to be played. i do believe the food industry will respond to that. it makes nestle want to respond. francine: what can nestle do better? paul: so much. francine: is there anything you would change? paul: this is a dynamic company so the speed of innovation. the millennial's, the consumer awareness about their diet, about the companies and not only

what they do but how they do it, all of that has changed so dramatically. we have to be fast to respond, to anticipate, to be in sync with this one. this whole digital dimension that comes in, and this is not social media definitely, but also the traceability of the supply chains, all these new possibilities to build up into our reality is a challenge and an opportunity. go fast, embrace better more. you can do always better. francine: up next, we talk nestle's push into a more sustainable future. ♪

♪ francine: nestle has made sustainability a priority.

hope to make their packaging 100% recyclable. they are taking measures to use more renewables to powerplants. how do such a large international company accomplish these greener goals? paul bulcke is with us. how much do you think about sustainability and how much does that change your packaging? how much does it change transportation and the way people consume? paul: we are a long-term thinking company. strategically speaking, also on blair -- long-term shareholder value creation. that is our dna. whenever you speed up the long-term, somewhere you also say to the long-term shareholder value creation, but it should be value creation for all stakeholders. that is how we have phrased this

in creating share value, value for the shareholders and stakeholders. supply linked with the chain and our employees, where we are in the world. producing good nutritional products, that is carried into the future. francine: that is lovely, but don't shareholders just want returns or dividends? paul: they want it today or tomorrow. in five years time, 10 years time, and if you are thinking time framing you get to sustainability. that serves the shareholder. it is not a contradiction to say, let's beware of the shareholder and the value creation by him, and be aware also of being a positive force in society. i do not see any contradiction. let me give an example. country with ae

factory and we have some male farmers around. -- mill farmers around. receivethis factory to the best quality ingredients with consistency over time. i work with these farmers and share best knowledge. i start to organize with them stations so it is the highest quality in the factory. that is building sustainable economical development for a better getting -- giving life views and better quality for the farmers, better income for them. i secure also my supply chain. i can say that sounds idyllic. no, that is what we do. we have many supply chains. francine: how do you choose what you buy and sell? paul: the first criteria -- does it fit our strategic direction?

nutrition, health, and wellness, all these are linked. does it serve that strategy? the second one is -- what does it ring to us? is it accelerating, bringing new platforms and insights? with enoughhere resources? strategic fit and we will enjoy it. orncine: is it market share revenue in a specific category? paul: winning is playing the category. you want to be leading the category, having the future in our hands shaping. can we win? yes. we are driving market share. also, can we enjoy it? that means growth. how intense are the resources needed for that return on investment? it is logical. a strategic fit.

another point is what we buy, how will that fit the people? what is the culture? what is the empathy of the culture? if we tried to buy something that is well-managed, we will not destroy outcomes. francine: is it dangerous that you buy things, for instance frozen pizza? the trend is consuming less and you are stuck with an asset that is difficult to shift. paul: you have to see it in time. there is a little bit of critical dimensions of frozen food. think through the basics of it. frozen is the best technology to keep the nutrients in and bring it as fresh as you can have. we had a frozen capability through stauffer's lean cuisine in the united states, so it complements nicely. frozen pizza is a way of

delivering a nice pizza to people. if you did not do that with balancing it out, having gluten-free pizza, or more vegetable pizza is, less salt, and you go on, you can deliver through that platform a very wholesome, healthy alternative. francine: if you were to choose four or three of your products that tell the story of nestle, what would it eat? paul: -- what would it be? paul: all of this is linked with children. withilk brand has evolved micronutrients, etc. that is a nice brand. and it has been a nice story for so many years. francine: it is so popular, especially in the u.s. paul: not especially in the u.s. , so many companies. nescafe is in latin america and the u.k.

or in asia. there are all different kinds of forms. nescafe is one brand worldwide and we have 150, 200 blends adapted to local taste. nescafe is the number one. i have a special story with maggie because it is the first band i was able to manage when it was in peru. the bully at cube allows so many things -- leon cube -- bullion cube allows so many things, soup in africa and europe. the housewives, the mothers can take care of their families and cook so it helps them prepare the classical food made at home. allowslso a carrier and

the carrying of micronutrients. vitamin iron, zinc, and d. of the day, maggie is one of these that has many angles that are quite positive. francine: coming up, we will discuss his storied career, including his transition from nestle's chief executive to chairman. that discussion, next. ♪

♪ knowsne: paul bulcke nestle inside out. climbedeaching -- he the ladder working through countries in europe and america. he was named chief executive and now is chairman. we talked about that transition.

what kind of chairman are you? was it the transition from ceo to chairman difficult? paul: good question. if you define the definition of a chairman, it is someone who knows. you have a little bit of fiduciary duties that are different. you have governance and you are responsible to make sure the board has good articulation of the right strategy, and have the right people in the right structure. a ceo is part of the board. we delegate strategy. that is close to what i know i have been running and what i have been part of these years. hands off. francine: that would be difficult, right, hands off

after you have been running a place for so long? paul: we are there for the company. have to take distance. it is easier when the ceo is doing a good job. i have enough on my plate to think it through. board members, looking for the right board members. unit thathas to be a has all the right profiles there , that are very aware of the day today. that has to reflect the environment for the company to be successful. that has financed through political views and it is linked -- the consumer industry, retailing, digital. you have to have these complementing each other so you have a collegiate lord that can

steer the come dashboard that can steer the company and the right way. my independent director is responsible for that. francine: how does the relationship between the chairman and chief executive work? or keepeed to get along each other on their toes? is it a counterbalance? paul: first of all, actors are different, complement each other. we have somebody that i can still say that. next year, coming from the outside, two years will be the inside. i know this company has been around. company withn this so many dimensions. i know what i'm talking about. predecessor was -- and we can go and ask questions and ask, why is that like this, or what

do you think about that person for that job? things like that. continuing with intensity is good. he brings new ways of going about things and that is why we brought him. we share the same vision about the strategy, because these are the two preconditions. sharing and understanding the strategy, what it means, and the second is values, sharing the same values. my values and the company values and his values, that is a precondition. the rest is, we are there for serving a successful company. he knows the company but he knows me also. we have one meeting every month fixed. with a lunch included. we can anchor that. we have a few points in that meeting. in between, we have many

different meetings and things like that. that is where we work together. francine: what is the best piece of advice you have ever been given as a leader? you received your self or have given to someone else? paul: as a leader, authenticity, simplicity, being able to think income text -- in context, have inner strength. that has helped me as a leader and as a person. you are part of your life. you are the main actor of your life. you are involved in your life. you are on the scene. at the same time you need to detach, sitting in the public, detach involvement. the same thing professionally. you are under pressure. always be able to take a step back and watch, put yourself in the context. -- helps you to

take a look back off the tension of today, maintain perspective of time, it helps a lot. when you are angry, it helps to calm down before you get angry, but it helps to cope with pressure. francine: is that the advice you were given? paul: i have given a few times. the advice comes from my indian professor i had who wrote a book about it. hey, detach yourself. then i give a little booklet that helps. a good thing also is a sense of humor. francine: you also have a shareholder activist on your back. how is your relationship with him? paul: i have a more active investor and you have different investors and we listen to all of them. all ideas, all angles are useful. it is for us to listen and to do what is best for the company.

what is best for the company is to have a company that is consistently delivering value for shareholders, stakeholders, ,hat is dependable, confident has consistency and a good strategy, and that is thinking about long-term and sustainability. francine: american companies are more used to dealing with activist investors. do you think it will change? paul: the have more experience maybe, and from experience you learn. be true to yourself and transparent and listen, taking havebody serious, and we intensified a little bit listening to shareholders, all of them. different angles of seeing the , but what weecting have to do as nestle is what we believe nestle is, share that with them, have the dialogue, and deliver. deliver over time, and that is

what we have been doing and that is what we feel is our obligation for the future. thank you very much. ♪

>> you're watching "the best of bloomberg daybreak middle east"" the major stories this week. saudi arabia kicks off a sweeping plan to kick off half a trillion dollars of fresh investment. the c.e.o. of the austrian energy giant o.m.b. tells us asia is running the show when it comes to global oil demand. and in dubai, how is the u.a.e.'s employment market looking? we ask the c.e.o. of online jobs portal base.com. ♪ manus: saudi arabia