The Sexy in Powerbars

Restore

Blog Post #5

Yesenia Gomez

Economic side of Consumption- Powerbars

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The Sexy in Powerbars

The Restore can be described as PLNU’s very own mini-market. Students are constantly in and out of this venue. I was able to talk with Irene Alvarado, Manager of the Restore, about the best-selling products. The Powerbar was one of the top 2 selling products in the Restore. Most people would agree that the energy bars are quite expensive but the satisfaction one receives from eating a filling, healthy bar is better than a bag of chips. The benefits of the taste and nutritional gains have obviously outweighed the financial costs. As a school, we have proved it by making energy bars one of our top 2 selling products.

Since 2004, energy bars have made steady gains even with the relatively high prices on the energy bars. In 2011, Food Management wrote an article titled Food Bars Growing Fast; Packaged Facts reported that the retail market was $5.7 million dollars in cereal and energy bars.

Energy bars, such as Powerbar, have expanded their markets from the sports nutritional market to recreational and life-style users. A 2010 Market analysis report from the International Market Bureau says that niche markets in sports nutrition are selling products in grocery stores and market outlets; they are no longer just seen at nutritional or sports stores. Sport nutrition markets are using new ingredients in new products to incorporate different target markets. The general American population has athletes, recreational users, and life-style users. The consumption of each of the groups has a different intention and purpose of purchase. Just like the general population, PLNU is a small sub-scale of the energy bar consumption; there are students, faculty, and staff that engage in different sub-categories of exercise.

According to the International Market Bureau, there are 3 specific trends seen in the consumption of energy bars. First, Powerbars have included innovative ingredients such as protein and nutritional boosts like energy; this attracts the athletic population. Second, appearance and fitness concerns have become more openly common. Third, the accessibility of these bars has grown; they are in mini-markets like the Restore and supermarkets like Walmart. The last two trends attract the general population.

The United States has become the biggest consumer for sports-related products. In the global market, it is estimated to consume two-thirds of both the value of retail transactions and volume sales. Consumer behavior has pushed sports nutrition markets to make a variety of energy bars with new specific flavors and purposes. This is why Powerbar has a total of 37 bars in 8 specific categories. Taste is a significant factor and ingredients like cocoa and whey or soy protein can manipulate whether consumers will continue to purchase bars.

Nestle, owner of Powerbar, has easily outstripped cocoa supply from plantations in the Ivory Coast. Corporations like Nestle know the value of cocoa; they know it can be transformed into a great tasting bar with high demand. The problem is cocoa farmers are not receiving a fair share of the end product being sold. Percival’s article, From bean to bar: Why chocolate will never taste the same again, discusses the problem with local community farmers being at the bottom of a multi-layered supply chain. The cocoa-nomics do not allow these farmers to economically benefit from what has become an increasingly demanded market in the United States.

This means that either Powerbar comes up with a new supplement to replace cocoa or they change the way their supply chain is currently operating. If they choose to keep cocoa, they need to be paying farmers a fair amount of the profits gained. This also means better working conditions and the stop to child labor. If they do not choose to keep cocoa, they will lose a large number of consumers, and it would not be the same product anymore.

We know that energy bars have become increasingly popular and trendy. Is it more important to the consumer to buy trendy food items? Are consumers that shallow? Is it our duty to investigate where the ingredients of a Powerbar come from? Are corporations like Nestle using our own consumer behavior for their own economic benefit?

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The Sexy in Powerbars

Nestle’s Marketing Strategies

Restore

Blog Post #3

Yesenia Gomez

Economic side of Distribution- Powerbars

Nestle’s Marketing Strategies

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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.

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Nestle’s Marketing Strategies

You pay $2.39 for a Powerbar. How much does the laborer get from your pocket?

Restore

Blog Post #1

Yesenia Gomez

Economic side of Production- Powerbars

You pay $2.39 for a Powerbar. How much does the laborer get from your pocket?

Child Labor and Nestle videoImage

It’s  a long Tuesday.

There is no time for the Cafeteria. The next best option is the Restore. Let’s see…something quick, filling, healthy, and tasty. There it is—the Powerbar.
You pay $2.39. The price does not even matter at that point.
However, does the price matter somewhere else or to someone else?

How much does the laborer get paid to open cacao pods all day with a machete in the Ivory Coast? How do they combat their opposition for forest clearings due to palm oil exports? How can they see their children and tell them they barely make ends meet?

Many of the ingredients and resources needed to produce a Powerbar are found in countries “abundant” in cacao, soy, palm oil and sugar. In many ways, the excessive use and exploitation of laborers affects the economic stability of a community and the global economy.

Nestle, one of the biggest multinational chocolate producers and owner of Powerbar, recently agreed to let the Fair Labor Association (FLA) trace and assess their cocoa supply chain. More than a third of the cocoa around the world comes from the Ivory Coast in West Africa; yet, many of the laborers in the Ivory Coast live in poverty. There are local Ivory Coast individuals like Jean in From bean to bar: Why chocolate will never taste the same again who inherit land but gain little to no profit from it. Some of the poorest rural regions have these coffee and cocoa plantations, but they are easily exploited. The growers are positioned at the bottom of the cocoa value chain. Therefore, workers only see a small proportion of the profit gained from Nestle’s supply of bars containing chocolate. The local governments and nation-state politicians know the troubles with implementing higher working standards for cocoa workers. In this video, Quest talks with Prime Minister Daniel Duncan about the income of cocoa farmers in the Ivory Coast. In addition, take into consideration that the annual GDP per capita in the Ivory Coast is a little over $1,000. How is it that the GDP per capita is so low in a place where cocoa holds up 3.5 million people?

Farmers prefer to hire children since they cannot afford to pay adults. However, Nestle is slowly recognizing its power and position in positively impacting the lives of workers in cocoa plantations. Nestlé’s article, Nestle Action Plan on the Responsible Sourcing of Cocoa from Cote d’Ivoire shares the 11 recommendations the FLA believes will eradicate child labor from the cocoa supply. Nestle believes this will produce greater returns.

Nestle’s Responsible Sourcing Guideline has approached ways to implement international standards to their supplier code. On the other hand, there are still products in the Powerbar other than cocoa that need more in depth investigation. For example, there is the still questioning of where Nestlé’s palm oil comes from. The cheapest vegetable oil is palm oil, and it is even considered “green”. Nestle has been publicly humiliated for its consumption of palm oil. Although Nestle reports that it has stopped purchasing from Indonesian palm oil growers or any other damaging markets, it still acquires palm oil from private markets. Rumble in the Jungle uncovers Nestle’s purchasing of palm oil tanks from Rotterdam’s spot market. Rotterdam does not report an origin of its palm oil; they claim to be untraceable. It is that easy for Nestle to remove its bad reputation. As long as it is not directly connected to damaging markets, it can claim “blissful ignorance”. This is just a touch of make-up for Nestle. The demand for palm oil is high, so Nestle continues to purchase from third-party suppliers.

The production of Powerbars in the economic realm is questionable. There is enough evidence to support that laborers are receiving the bare minimum or nothing at all due to their little or no bargaining power.

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You pay $2.39 for a Powerbar. How much does the laborer get from your pocket?