Choppy Waters

A look into Nestle

Growing up in a fairly typical American household of the 1980s, I can honestly say that there is no one I know who didn't smile when their mom would pull a bag of Nestle Chocolate Chips out of the groceries.  Everybody knew that the house would soon smell of baking Tollhouse cookies and break out the milk in anticipation. Thirty years later, looking into the expansion of the Nestle family of corporations into bottled water production and sales, my image of Nestle has changed considerably.

After completing his apprenticeship with a pharmacist, Henri Nestle started off his career as a food chemist in the production of nut oils, vinegar, lemonade, and bottled mineral water. During a time of famine in Europe, he helped develop the first safe powdered infant formula for babies who could not breastfeed. Later, he helped develop condensed milk which aided in the creation of milk chocolate by chocolatier Daniel Peter. They partnered in 1879 to establish the Nestle Company.

Since then, Nestle has grown into the largest food and beverage company in the world comprising twenty percent (20%) of the global food and beverage market.  With an net income of $538 billion and revenue of almost $90 billion in 2017, company shares averaged $86.40 over the past year. The company's stated purpose is "Enhancing the quality of life and contributing to a healthier future." Their value proposition is "Producing and delivering food products with superior nutritious and health value."

The Nestle family of food and beverage products is so wide and diverse, it's fairly safe to say that, during one's lifetime, every American has purchased, used and/or tasted one of their products.

In 2000, Nestle founded Nestle Waters of North America.  With fourteen subsidiaries including Arrowhead Water, S. Pellegrino, and Sweet Leaf Tea, Nestle Waters NA reported sales of $4.5 billion in 2017. During this same time period, Nestle and other water bottlers persuaded the World Water Council to step back and change its position that access to safe drinking water is a "right" to a "need."(https://en.wikipedia.org/wiki/Nestl%C3%A9) This diminishment of the overall importance to protect access to safe drinking water was reiterated by former Nestle CEO Peter Brabeck-Letmathe in the 2005 documentary We Feed The World in which he called the idea that access to water is a human right excessive.

Not unlike tobacco companies who also targeted children as future/underage consumers, Nestle Waters NA marketed bottled water through programs like Project WET:Water Education for Teachers and a joint program with the WWE called "Choose Water" offering those using the self-same hashtag a chance to win a trip to the WWE's Summer Slam event.
(https://www.nestle-watersna.com/en/nestle-water-news/pressreleases/nestle-waters-wwe-choose-water) None of Nestle's marketing for bottled water mentions that while tap water in the U.S. averages just 5 cents a gallon and milk averages $2.84 a gallon, single use bottled water averages $9.47 per gallon. 
( https://www.foodandwaterwatch.org/news/nestle-and-others-profit-us-water-infrastructure-crisis)

Compare this to the news reports that Nestle is allowed to draw a maximum of 4.7 million liters (1.24 million gallons) of water per day at a cost of $3.71 for every million liters/quarter million gallons.  Nestle pays just under $20 a day for water it can sell for hundreds of millions, if not into the billions, of dollars.  In San Bernardino County, a county in Southern California that includes Death Valley and is recognized as mostly comprised of deserts, Nestle pays the U.S. Forest service just $534 dollars per year in order to pump out an average of 30 million gallons of water, even during times of drought, averaging a cost to Nestle of $0.0000017 per gallon.

Nestle stepped far afield from founder Henri Nestle's efforts to benefit people by making safe products during time of need by exploiting one of humanity's most basic right to safe and affordable drinking water all in the name of profits. I lived in Lake Arrowhead for years.  I can't bring myself to drink a piece of home anymore knowing I'm simply contributing to its exploitation and the loss of readily available and affordable drinking water by friends and former neighbors.

Nestle the Darker Side of Chocolate

We all know the Brand, most know their slogan, and even if you say you've never heard of them you've almost certainly had one of the products. With a company purpose of "enhancing the quality of life and contributing to a healthier future", and a value proposition of producing and delivering food products with superior nutritious and health value following closely behind that, how could you go wrong? I have to admit that I chose Nestle because I plan to use them as my case study and this was a good opportunity to dive into the research and post some preliminary findings. 

            As the world’s largest food and beverage company Nestle is a driving force in the industry. Through their “Open Innovation Platform” they are able to partner with new Food Production companies like Here Foods, Jackson’s Honest, and Miyoko’s, all of which are innovators in their respective markets that you can read more about here. Another hot topic in the world of Nestle, which I will touch on more in my case study, is the amount of waste generated by their bottled water industry alone. With tweets ranging from topics like this which I completely agree with because the days of "The Crying Indian are over", to ones like this about their plastic pollution in general it’s easy to have passed by the main concern I want to talk about in the blog.

SLAVERY FREE CHOCOLATE. . . Let that sink in for a moment. Do you know if that tasty Kit-Kat was made without cocoa harvest by child slave laborers? I guarantee you can't say yes because just as recently as February Nestle admitted to finding slavery in their supply chain and they are still in the midst's of a major lawsuit. After all of this you'd think Nestle would take a hard stance against the practice but in August they responded to the "Modern Slavery Bill 2018" in the Australian legislature by saying "it would add cost and time" that "will need to be borne somewhere." Sparking responses on Twitter like this

to Posts on Facebook like this

 All the while Nestle's Global Home Page continues to talk about the "good" they do for society.

               If I were their Brand Manager I would be working tirelessly to move the company, not just their brand image, away from any such practices and be diligently reassuring their customer base of any and all steps taken. Sadly the lesson that most people, including myself, take away from this is . . Slavery free chocolate is bittersweet when you're the largest food and beverage company in the world.

Like the tires in Formula 1, Big Tobacco goes up in smoke

     While looking for that catchy new ad campaign, or the most controversial commercial out there, I found myself drawn into an article not about either or even the success of a particular ad campaign but to the enormous loss in revenue one company has been hit with by walking away from an advertising sponsor and their attempts at filling that void. The company, Formula 1 Racing. The loss, 200 million a year in sponsorship money and free advertising. The market issue, Big Tobacco averaged 350 million a year in revenue from the sport. As I read more I didn't even notice the ticker ads as my mind began thinking of the marketing revenue left on the table.
     Opening with the entangled history of Formula 1 and Big Tobacco, the most iconic team being McLaren in their signature Marlboro Red and White, the article goes on to explain the decision to ban tobacco revenue in 2006 and how the loss of that revenue forced several teams out of the sport. As the dust began to settle teams and Formula 1 as  a company found themselves struggling to find new sponsorship.
     As an International Sport Formula 1 offers a unique value proposition. Their "product" is worldwide viewers and as discussed in the article the opportunities in corporate sponsorship and advertising are numerous. Re-branding the entire Sport is a monumental challenge but viewership is on the rise, corporate sponsorship is up, Formula 1, under new ownership and direction, is looking to build upon their 150 million global viewers.
    In the process of re-branding Formula 1 is contemplating dropping advertising from alcohol, fast food and snack companies and while I can see the reasoning I think their best option is to try and move away from the "elite" image the sport has and embrace the new fans brought in from these avenues. While they will most likely never have the fan base that NASCAR has the right Tech company sponsorship combined with a more inclusive image could easily bring younger fans on board.
     The biggest take away for me in all of this is that vast opportunity presents itself as industry begins to turn away from socially unacceptable revenue streams. 




https://nyti.ms/2Nf9YyY

https://www.marketingweek.com/2018/01/09/formula-one-f1-on-appealing-to-more-women/
     

Intro to Joe Blog

   Trying to create the Whole Package

(while staying awake)

 As I sit here trying to figure out a witty way to answer the intro questions I, a man who was raised by a pack of used car salesmen, find myself in a communicative quandary. So I guess I'll abandon the comical quip attempt and shift gears into the meat and potatoes of this post. I enrolled in this class because after taking BA 101, in order to avoid 2 other elective classes, my instructor recommended that I look into the 1 year Small Business Entrepreneurship Certificate that the college offered. How hard could 5 little classes on top of my degree program be, right? So in a nut shell I'm enrolled cause I like the abuse. As far as being a Business Major goes my actual degree will be in Computer Aided Drafting with a 1 year certificate in Civil Engineering Tech AND the aforementioned Small Business cert. Again, in case you for got, I like the abuse. When it comes to marketing I'm not looking for anything in particular but more so just a well balanced understanding of the fundamentals to build upon. 

I am a 10 year Land Surveyor in the process of transitioning into the office from the field. I love seeing what mankind can create and being an integral part of that process.