Case Studies

Nestlé and their False Health Claims

Baby formula marketing campaigns under fire

 

 Prepared by:

Hannah Fanning

University of Memphis

 

 

 

 

 

Table of Contents

ABSTRACT …………………………………………………………………………………3

COMPANY BACKGROUND …………………………………………………………….4

SITUATIONAL ANALYSIS …………………………………………………………….5

         Similar crisis occurs……………………………………………………………6

RECENT CAMPAIGN IMPACT..……………………………………………………….7

ORGANIZATION RESPONSE…………………………………………………………9

REFERENCE PAGE ……………………………………………………………………..10

 

 

Abstract

At the beginning of this year Nestlé, a Swiss transnational food company, was accused of violating ethical marketing codes in recent baby formula marketing campaigns. The accusations were published in a report by Changing Markets Foundation, a firm that focuses on exposing companies for irresponsible corporate practices (Neslen, 2018). The campaigns claim that Nestlé baby formula is “inspired by” breastmilk, despite being prohibited by United Nation’s World Health Organization to do so is one of the main issues highlighted in the report. Additionally, ingredients such as sucrose, were found in formula manufactured in South Africa while other locations market “sucrose-free” formula. In this case study, the inconsistency with the products and what has been marketed will be discussed. Also discussed will be Nestlé’s stance on the accusations and how the company is rectifying the situation moving forward (Neslen, 2018).

 

 

Company Background

         In 1866, Anglo-Swiss Condensed Milk Company was founded and one year later Henri Nestlé developed a similar company distributing his new infant formula in Vevey, Switzerland (History, Web). This product was created to assist new mothers who could not produce breast milk naturally and decrease the infant fatality rate during this time period. In 1905, the companies merged together to create the Nestlé Group (History, Web). Shortly following the merge, Nestle’s began producing milk chocolate by Peter & Koehler and purchased the Switzerland’s oldest chocolate company, Peter-Cailler-Koehler (Mowbray, 2017).

Currently, the company is the largest food and beverage company in the world with 2,000 brands and a presence in 189 countries (About Us, Web). Nestlé prides themselves on enhancing quality of life and inspiring people to live healthier lives by providing high quality products (About Us, Web). The company has been in operation for 150 years and continue to set goals that improve lives and contribute to positively impacting the world (About Us, Web). The company’s effective marketing campaigns and product developments through the years are the main reasons for their stability.

 

 

Situational Analysis

          The Changing Markets Foundation released an extensive study that analyzed 70 Nestlé infant milk products in 40 countries confirming that the company’s products obtained false advertisements (Neslen, 2018). In an agreement with UN’s World Health Organization, the company agreed to no longer claim their products as “inspired by”, or “closest to” breastmilk as this persuades mothers to use formula instead of natural breastmilk (Neslen, 2018). However, the company failed to abide by this. Another issue discovered by the report was that recipes in various countries were inconsistent and contained unnecessary and potentially harmful products (Arsenault, 2018). In South Africa, Nestle’s products contain sucrose despite the various nutritional organization’s advising against the use of sucrose in infant formula (Arsenault, 2018). Various Nestle manufactures in other countries advertise “sucrose-free” formula, showcasing the inconsistency in the brand’s products. The accusations made in the report state that Nestlé chooses to focus on marketing strategies rather than recipe consistency and the importance of providing high quality nutritious baby formula (Arsenault, 2018).

 

 

 

Similar Crisis Occurs

This is not the first time that Nestlé baby formula has been under fire. In the 1970s, mothers choosing to breastfeed began to decline, inspiring many organizations to question various marketing strategies of infant formulas. This resulted in a boycott by Infant Formula Action Coalition of Nestlé products (Boycott, Web). Mothers in third-world countries began using baby formula instead of breastmilk, which raised concern on whether the marketing campaigns were ethical, as these countries just started to recognize the breastmilk substitutes (Krasny, 2012). This issue resulted in various accusations against Nestlé, hearings within the Senate to change marketing rules, and the release of a campaign in New York City persuading individuals against using baby formula. In 1984, the boycott was dropped against Nestlé after the company implemented new marketing regulations based on the World Health Organization’s code of regulations published in 1981 (Boycott, Web).

 

 

 

Recent Campaign Impact

         Due to the vast attention drawn to Nestlé after the ‘Milking It’ report was published, various media outlets published blogs and feature stories discussing the topic and stating their own opinions. Changing Markets Foundation also requested that Nestlé conduct their own internal investigation of the products they’re distributing and release a response to the findings. Additionally, a campaign was released by International Special Dietary Foods Industries that further acknowledged and spoke against the inconsistent products (Chu, 2018). ISDI stated, “when marketing follow-up formula, our industry agrees that it needs to be ethical, unambiguous and done transparently”.

 

 

 

 

 

 

 

 

Nestlé’s Response

         After the release of the Changing Markets Foundation report, Nestlé was asked to respond and conduct an internal audit of various facilities that produce infant formula. Nestlé released a question and answer response directly to their website for customers and speculators to view. The information that can be found in the Q&A is a direct response to the overall issue, an explanation on ingredients in the formula deemed unsafe, their marketing strategies, and how they intend to fix the issue moving forward.

Nestlé acknowledged the report and invited Changing Markets Foundation to participate in various forms of dialogue to create a mutual understanding and provide solutions to the issues (Position, Web). Additionally, stated was their reassurance to continue following the World Health Organization’s marketing codes and that 600 researchers within Nestlé’s company will continue to conduct scientific research to help provide healthy products for infants (Position, Web). Nestlé also stated that the use of sucrose reported in their products for infants aged 0 – 6 months was false (Position, Web). They do not include sucrose and will be eliminating any other traces of sucrose from other products. As far as false advertising claims, Nestlé defended their strategies by stating their ads do not persuade mothers away from breastfeeding but deliver a healthy alternative for mothers who are unable to produce breastmilk (Position, Web).

Nestlé provided information on 8 independent external audits and internal audits in 57 countries in previous years regarding infant formula. Nestlé also acknowledged the truths found in the Changing Markets Foundation report and vowed to continue improving products and acting transparently with customers moving forward (Position, Web).

 

 

 

 

 

References

“About Us.” Nestle.com, www.nestle.com/aboutus.

Arsenault, Anisa. “Nestlé Baby Formula Under Fire for False Health Claims.” The Bump, The Bump, 2 Feb. 2018, www.thebump.com/news/nestle-baby-formula-investigation.

“Boycott Nestlé.” Center for the Study of Political Graphics, CSPG, collection-politicalgraphics.org/detail.php?module=objects&type=browse&id=2&term=Rachael%2BRomero&kv=7574&record=0&page=0.

 

Chu, Wai Lang. “Nestlé under Scrutiny for Its Infant Formula Marketing Approach.” Nutraingredients.com, William Reed Business Media Ltd., 2 Feb. 2018, www.nutraingredients.com/Article/2018/02/02/Nestle-under-scrutiny-for-its-infant-formula-marketing-approach.

“Images | Nestlé Global.” Nestle.com, Nestlé, www.nestle.com/aboutus/history/images.

Jevinger, Rikard. “Milking It.” Changing Markets, Changing Markets Foundation, changingmarkets.org/portfolio/milking-it/.

Krasny, Jill. “Every Parent Should Know The Scandalous History Of Infant Formula.” Business Insider, Business Insider, 25 June 2012, www.businessinsider.com/nestles-infant-formula-scandal-2012-6.

Mowbray, Sean. “A Brief History of the Nestlé Brand.” Culture Trip, The Culture Trip Ltd., 13 May 2017, theculturetrip.com/europe/switzerland/articles/a-brief-history-of-the-nestle-brand/.

Neslen, Arthur. “Nestlé under Fire for Marketing Claims on Baby Milk Formulas.” The Guardian, Guardian News and Media, 1 Feb. 2018, www.theguardian.com/business/2018/feb/01/nestle-under-fire-for-marketing-claims-on-baby-milk-formulas.

“The Nestlé Company History.” Nestle.com, Nestlé, www.nestle.com/aboutus/history/nestle-company-history.

“What Is Nestlé’s Position on Infant Formula Marketing?” Nestle.com, Nestlé, www.nestle.com/ask-nestle/health-nutrition/answers/changing-markets-foundation-report-infant-formula-marketing.

“Why Was a Nestlé Boycott Launched?.” Nestle.com, Nestlé, www.nestle.com/ask-nestle/our-company/answers/nestle-boycott.

 

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