Nestle’s Marketing Strategies

Restore

Blog Post #3

Yesenia Gomez

Economic side of Distribution- Powerbars

Nestle’s Marketing Strategies

Image

Recently, Nestle has broadened its marketing strategy by working as a franchise machine across the world. It is a global multinational corporation that exists within local communities. Nestle brands everything locally and works regionally. Most of its plantations are abroad while corporations are in the US and Europe. They have a global approach in technology and are very advanced in the way it enters new markets. Rapoport’s article, Nestle’s Brand Building Machine, calls Nestle the modern day “Roman Empire School of Marketing” for its tactic in settling in, colonizing as much territory as possible, adapting to the new land, and keeping away competition that trying to intervene for resources.

Nestlé’s business approach consists of traveling across open markets to discover new markets. Its persistence in entering markets in China has led it to reach a leading role as a food company in China and Vietnam. Nestle has already branded many products and resources in Mexico, Brazil, Chile, and Thailand. Nestlé is considered one of the most powerful food companies in the global economy. There is a give and take with the companies it makes business with. For example, Rumble the Jungle explains the extraction of palm oil in Indonesia is hurting the local communities. Yet, the Indonesian government benefits from the income gained from the extraction of palm oil; it goes towards the corrupt elite. Why?
Well, when every metric ton in Indonesia forests are priced at $900 and there is an annual 24 billion dollars made from exporting palm oil from Indonesia…it is tempting for those who want more money and power.

Nestle does not always buy directly from “damaging” markets. It is careful about its reputation. It has been humiliated and media-bombed for its engagement in labor exploitation and destruction of natural environment resources in the past. For example, farmer’s beans are bought by other middlemen which later exports goods to Nestle. The supply chain goes through a series of distributors and as the cocoa or coffee beans gain market value, it is too late for the primary farmers to receive their proper share. They are forgotten and left at the bottom of the value chain. Farmers are left with little to nothing.

Rapoport, C. (1994). Nestlé’s brand building machine. Fortune,130147.

Gilbert, D. (2013). Rumble in the jungle. Earth Island Journal, 27(4), 40-45.

PREVIOUS POST

NEXT POST

Nestle’s Marketing Strategies

Sustainable Business Practices

Restore

Blog Post #10

Kelsey Werner

Social side of Distribution- Guayaki

Fair trade, living wages, packaging made from recycled products, subtracting carbon emissions, no harmful synthetic agents, salvaged or recycled waste, bio-diesel, and 100% renewable energy. Sound too good to be true? Well, it isn’t. Welcome to Guayaki.

As stated on their website:

In 2009, Guayakí became the first Fair Trade Certified yerba mate supplier in the world through IMO’s Social & FairTrade Certification Programme – “Fair for Life”.  “Fair for Life” combines strict social and fair trade standards with adaptability to local conditions. The Certification guarantees that human rights are guaranteed at any stage of production, so that workers enjoy good and fair working conditions and that smallholder farmers receive a fair share. Fair trade improves the livelihood of thousands of smallholder farmers and workers by providing the means for social community projects and empowerment of people.

Guayakí is also a member of the Fair Trade Federation and guarantees living wages to the artisans who make our gourd and bombillas. Instead of purchasing gourds and bombilla from commercial factories, we employ Argentine artists who work from their home studios so they can spend more time with their families and create truly one of a kind pieces of art. At Guayaki, it’s not just about making a tasty cup of mate, it’s about meaningful work.

Our packaging material is a minimum of 100% recycled corrugated cardboard with 30% post consumer, although most are 100% post-consumer waste. Our packaging peanuts are made of plant based materials (dissolve in water) or salvaged and cleaned from other companies that we collect from inbound materials. Our plastic pallet wrap is recyclable. Our bottle shipper cases are completely recyclable, non-petroleum based, and made of 100% post consumer recycled corrugated board. This is a first in the industry – we are proud to say we pioneered these new boxes!  The paper used for inserts, invoices, brochures, etc is always made from 100% post-consumer recycled paper.

All invoices, flyers, brochures and other paper materials printed for our customers and vendors are 100% recycled post consumer waste material or the highest post consumer content available. We will never use virgin paper materials in anything we print for our business.  In our offices, we recycle, reuse, and reduce as a daily practice.  We use real dishes and cups (and gourds) and wash them instead of using paper or plastic.

Guayakí third party life cycle analysis shows that after growing the yerba mate, and adding up all of the carbon emissions, guayakí is subtracting carbon from the environment. For example, your purchase of one pound of loose guayakí yerba mate reduces atmospheric co2 by 573g.

Our mate tea box packaging material is recycled paperboard with 35% minimum post consumer, and printed with vegetable inks.  We package our bulk loose mate products and bulk tea bags in cutting-edge biodegradable and compostable bags made from tree pulp cellulose from sustainably maintained forests. They will compost in your home compost or landfill in 180 days. The packaging material is made from renewable, non G.M.O. wood-pulp sourced from plantations employing Sustainable Forestry Management Principles, who conform to the environmental standard I.S.O. 14,000 and have either achieved or are working towards F.S.C.

Guayakí does not use, nor allow within its facility, chemical cleaning agents, bleaches, synthetic and chemical based soaps, ammonia, chlorine, dioxide, commercial pest repellents, fumigants, or other synthetic agents which are harmful to ourselves and the environment. Pest management practices include the use of sticky traps. We do not fumigate nor do we use chemical killing agents. All cleaning products used within our facilities are 100% natural, bio-degradable and are approved for use within certified organic facilities. The primary industrial cleaning agents we use is TKO Orange Oil which is completely biodegradable, approved by the EPA and our organic certifiers.

Virtually all waste generated by Guayakí is either recycled or salvaged. All office paper, scrap paper, cardboard, cans, bottles, plastic, steel, and wood is salvaged and recycled. We also recycle all electronic and computer components which are no longer in working condition by taking them to a local facility for proper salvage, reclamation or disposal, thus preventing several known heavy metal sources from being land-filled. A few times a year, we even reuse our mate after it’s brewed for the bottles to use it as energizing compost for our gardens around our main office.

Our marketing cargo vehicles run on bio-diesel! This further outlines our commitment to environmental sustainability and lessening our impact on global warming.

Guayakí is proud to have converted its entire operation to 100% renewable energy by transferring all of its conventional electrical power usage to renewable solar energy. We offset over 55 tons of our corporate CO2 footprint … locally. In tandem with this commitment, we have purchased enough solar power to offset the carbon 1 energy market in a similar way the purchase of a Guayakí product helps drive more reforestation.

 Image

Guayaki is making outstanding efforts in order to protect the environment and all people who are affected by its product. It is rare to hear of a company doing this much. It gives me a bit of hope that this sort of business model is possible and also successful. I believe in what Guayaki is stands for. They walk their talk and carry out their mission of restoration all along their supply chain.

 PREVIOUS POST

NEXT POST

Sustainable Business Practices

Will Nestle Ever Make it in the Fair Trade World?

Restore

Blog Post #4

Yesenia Gomez

Social side of Distribution- Powerbars

partnersblend

Will Nestle Ever Make it in the Fair Trade World?

Let’s go back to the 1950s. Why? Well, the movement towards fair trade products began in the 1950’s. However, many believe fair trade has broken away from its original purpose. Back in this time it was called “alternative trade”. Its focus was to ensure fair wages were being paid to those who were sowing and reaping coffee beans, cocoa beans, and other products enjoyed by consumers. Have multinational corporations like Nestle  made progress?

Before 2005, Nestle declared itself to “fairly trade” cocoa and coffee, when in reality it refused to comply with fair trade regulations. Nestle discarded any intentions to change its “marketing, labor, or pricing strategies” for that matter. For over a decade, Nestle continued to be at odds with fair trade. Suddenly in 2005, it released a “fair trade product” called Nescafe Partner’s Blend. The Fairtrade Labeling Organization immediately certified Nestle as a fair trade corporation. This singe action from the FLO was enough to spark tension in the fair trade movement. Many European fair trade movements claimed that the FLO gave into Nestlé’s whims due to the fact that Nestle held a powerful position in the coffee and cocoa industry. There were angry outburst and many criticized the intentions of Nestle in the realm of fair trade after all they only had one fair-trade product in the market. Many were in disagreement with FLOs actions to label Nestle a fair trade company. Nestle has been called the problem much more than the solution. The treatment of the FLO towards Nestle was overtly one of interest. Nestle was selling only one-tenth of one percent of their fair trade coffee. Many began to question FLO and its betrayal by making fair trade a niche market far way from its original purpose to reform the global trading system.

O’Nions article, Fair Trade and global justice, reports that in 2002 while many fair trade coffee industries suffered from economic downfall, Nestle made 26% profit margins with their supply of instant coffee. Many coffee farmers and growers were selling fair-trade coffee for such low prices, and Nestle took advantage of it. The corporation was able to look good for selling fair trade coffee, and it did not even have to spend excessive amounts of capital on fair trade coffee. Nestle also participated in the distribution of low wages in Colombia in 2003. Columbian union leaders even accused Nestle of threats and murder. In the Philippines, Nestlé also undermined the working rights of people. Many reported abuse in the work place and extreme low wages. Nestlé’s infamous reputation in unethical business methods has pushed many to feel uneasy about their “fair trade” label.

Nonetheless, the article “Fairtrade Coffee: Nestle Enters the Ethical Frey” explains the new connotation fair trade products have acquired. Americans, as well as Europeans, were asked about their take on fair trade products. There was a total of 57% who responded that it was very important to purchase products ethically obtained. Nestle, in response, “jumped on the ethical bandwagon” causing many supporters of fair trade to worry about negative effects a notorious corporation such as Nestle could have on the value and meaning of fair trade. On the other hand, if Nestle whole-hardheartedly adopts fair trade regulations, smaller companies may suffer due to the Nestlé’s established power and influence in the cocoa and coffee industry.

Lyon, S., & Moberg, M. (2010). What’s fair? The paradox of seeking justice through markets. Lyon, S., & Moberg, M. Fair trade and social justice: global ethnographies (1-23). (Eds.), New York: New York University Press

Nestle: fair trade?. (2004). MarketWatch: Global Round-up, 3(6), 43-44.

PREVIOUS POST

NEXT POST

Will Nestle Ever Make it in the Fair Trade World?