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Has Nestle Gone Too Far?
Forbes Business AUG 21, 2015 Clark Wolf
http://www.forbes.com/sites/clarkwolf/2015/08/20/has-nestle-gone-too-far/
Protests against Nestle, the food giant, over child slavery in cocoa production, water grabbing in the drought-stricken West, baby formula hawking in third world countries and a host of other highly questionable and controversial practices, seem to be coming to a head. Could this be a tipping point for the world’s largest multi-national products-that-some-call -food company? Reddit is ablaze.
Are they heading into Mac Donald’s country? Are they starting to smell like Whole Foods?
Ok, that’s extreme. But the gist is clear. MacDonald’s has come to mean a meandering behemoth that can’t quite finds its way. Like the funny old uncle who really should wash that shirt. Whole Foods has come to mean a bait and switch fancy grocery that gets caught overcharging. Coast to Coast. Like a vintage car salesman who, this time, wants to unload something called an Edsel, and makes you wonder about the Corvair you coveted your last year in college.
Nestle?
The man (their CEO) said he doesn’t think water should be free, or that’s what he seemed to say. To Californians. In the midst of a 5 year drought that threatens to undermine the farming that feeds much of the nation. No matter what you think of the actual rights and details involved, no matter how deeply your libertarian leanings go, this is tone deaf beyond belief. This is the kind of life in a bubble away from real people that can undermine the basic trust needed to create successful, beloved and time tested brands. He may support efforts to provide safe drinking water to tough regions but keeps slurping huge volumes of public water near Sacramento for free, selling it back to Californian’s in heavy plastic bottles. What’s wrong with this picture?
And make no mistake, Nestle sells brands. Not water or chocolate or cereal, or yogurt, or ice cream or frozen foods or baby foods or any of those other things. They sell Nespresso, and Perrier and Coffee Mate and Munch Bunch, and Gerber and Stouffer’s and Hot Pockets and Lean Cuisine and too many more to even think about naming.
It’s brands and distribution, promotion and marketing, business dealing and category building they are actually very good at. It’s why they sell Cheerio’s in countries beyond the US and Eskimo in Finland. They don’t make food or other edibles or drinkables. Or if they do, they don’t think of them as food. They try to get workable ingredients at the lowest possible prices mixed with the latest technology (that may later turn out to be extremely unhealthy…but until it’s proven, what the heck, let’s sell it), add some flashy packaging and a major media push. Or they buy a company that fits their portfolio and roll out a couple of quarters of well-planned placement and marketing.
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I am not trashing any of those valuable skill sets. They bring value and create profits. What I’m questioning and what seems to be gaining traction among activists, shareholders and general consumers alike are the issues of safety, honesty and trust. When it comes to putting food into the bodies of our families and friends this is a whole new world. Organics are in the billions. Major foodservice companies are having to consider – and preform on – commitments to ethical, sustainable and healthful farming and food making. Transparency is king, and going for Emperor.
Nestle needs to get a handle on where and how they do the business of food and how they tell the story of their company and companies before they truly loose the brand value they’ve built. Stakeholders in all areas will be pushing for action and wanting results.
Quick.