The world’s largest food and beverage company, Nestle, is in the news again after an internal company presentation acknowledged more than 60% of the company’s mainstream products do not meet the ‘recognised definition of health’.
As per the Financial Times report, Nestle has acknowledged that “some of their categories and products will never be ‘healthy’ no matter how much they renovate”.
A presentation circulated among top executives this year, seen by the Financial Times, said that only 37 percent of Nestlé’s food and beverages by revenues, excluding products such as pet food and specialised medical nutrition, achieve a rating above 3.5 under Australia’s health star rating system.
“Within its overall food and drink portfolio, about 70 per cent of Nestlé’s food products failed to meet that threshold, along with 96 per cent of beverages — excluding pure coffee — and 99 per cent of Nestlé’s confectionery and ice cream portfolio” reported Financial Times.
The Swiss company is in damage control mode after the emergence of media reports. In a Global Statement, Nestlé S.A Spokesperson said that Nestlé is working on a company-wide project to update its pioneering nutrition and health strategy.
“We are looking at our entire portfolio across the different phases of people’s lives to ensure our products are helping meet their nutritional needs and supporting a balanced diet. Our efforts build on a strong foundation of work over decades to improve the nutritional footprint of our products,” added the statement.
This is not the first time Nestle has been in the news for the wrong reasons. In 2015, Food Safety and Standards Authority of India (FSSAI) – India’s food regulator had banned Nestle India’s Maggi Noodles after tests showed the presence of excessive lead and for alleged mislabelling over flavour enhancer MSG.
Nestle was forced to recall the popular snack from the market. As per media reports, around 38,000 tonnes of Maggi Noodles were recalled from retail stores and destroyed between June 5 and September 1, 2015. Maggi’s share in the Indian market went down to zero from 80 percent. Though Maggi returned to shelves by November 2015, it took almost another year for the brand to return to the shops across all the states in India. The reputation and brand trust of Maggi Noodles which had almost 75 percent share of the instant noodles market in India, was severely damaged, and Nestle India faced substantial challenges in overcoming those.
Now, will Nestle’s internal document, which acknowledges that the majority of its food portfolio is unhealthy, affect the brand image and trust of Nestle?
“I don’t believe this news does any damage to Nestle at all. The fact that this is an internal report makes all the difference,” said Harish Bijoor Brand Guru & Founder, Harish Bijoor Consults Inc.
Bijoor said, “A company that is forever seeking to offer healthier and healthier offerings. If that means existing rejigging products, so be it!”.
“The difference between the Maggi issue of yore and this is the fact that it was an external investigation. This is an internal one. It makes a big big difference,” added Bijoor.
Kaustav Das, CEO Ralph & Das is of the same opinion.
“It will barely affect them. Except in conference room discussions among Marketing folks. Consumers buy Kit Kat, Maggi, Nescafe, and they don’t buy Nestle. Many of these brands are now part of our food and beverage culture and habitat. Very few are going to deprive themselves of their favourite morning coffee just because the parent company has admitted that many of its products are not healthy. Especially when there will be reassuring noises being made by Nestle on how they are looking to make their products healthier in a massive new initiative,” said Das.
“Trust is like fine porcelain. Very fragile. Fortunately, Nestle has a good name among consumers in India. And again, fortunately, the headlines are favourably framed to say that Nestle is improving standards or words to that effect,” observes Ramesh Narayan, Mancom Member India Chapter International Advertising Association (IAA).
“The points about their “unhealthy” products are not restricted only to them. Many manufacturers of refined foods and “junk” foods and aerated waters might not stand close scrutiny. All these brands must get their act together double-quick. It is up to them to make significant product changes and transparently communicate them. The alternative is either a fall from grace which would be very difficult to recover from or a slew of Government regulations against them which would be disastrous for them. Brands must realise that a healthy consumer is a happy consumer. And that benefits everyone concerned,” Narayan added.
Pavan Padaki, Branding coach and Consultant, believes that the recent controversy can be a well-planned campaign by Nestle.
“The recent hype and debate in the media over Nestle’s ‘unhealthy foods’ can be judged with a speculative view that this is a well-planned campaign from them. Interestingly, all coverages clearly state the source of information from an ‘internal document/presentation’, which has now been made public, with official remarks and quotes from the company’s spokespersons. This suggests that it’s a planned campaign roll-out aiming to showcase Nestle as a trustable, honest and transparent company with all the right intentions to present itself as a ‘Healthy’ company. This self-declaration claiming that they’re working on a new portfolio strategy adds to the credibility of Nestle trying to put their brand back on a ‘healthy’ track.” Pavan said.
“This recent move and hype in the media would also help in setting up a stage to announce the rollout of a new upcoming branded portfolio, where the genesis of the new brand and its brand story is logical, honest and meaningful, in line with Nestle’s brand purpose statement. It looks like it pays to be in the media,” he added.
Speaking on the possible strategies Nestle might adopt to overcome the challenges, Das said, “Just 10 companies control almost everything we eat. Nestle is the biggest among them. The other nine don’t make any better products. They will collectively work towards cooling down the conversation, and it’s in their collective interest.
He further elaborated it by taking the Trans Fat Controversy as an example, “A good parallel of how it will work is like the Trans Fat Controversy that erupted at the turn of the century in Europe. The big 10 lobby is so strong that they staved off legislation for 2 decades. The European Commission finally adopted a resolution in 2019 to limit trans fat to less than 2 percent, and it has finally been in force only since April 1 2021. It gave the food lobby 20 years to reformulate its products to be compliant with forthcoming legislation. Now they are ready, and hence there is a law. In India, the discussion on trans fat legislation has just begun.”
“Nestle will similarly assure consumers and govts that it is working towards new health standards. The rest of the food lobby will fall in line and get to work on their products in parallel. The positive fallout is that over time, possibly 5-10 years from now, we will have healthier food products by current standards. Till the next controversy erupts again,” concluded Das.
