Abstract

The case discusses the 2021 controversy over the unhealthy food portfolio of the world's largest packaged food and beverages company, Nestlé. Nestlé was formed in 1905 through the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé, founded in 1867 by Henri Nestlé. Nestlé’s success was driven by a combination of product innovation and acquisitions. It was the motivation for growth and diversity that had allowed the company to become a key player in nutrition. Nestlé owned more than 2,000 brands that were sold in over 197 countries around the world as of early 2021. However, through the years, the company had been mired in various controversies, facing criticism and boycotts over its marketing of baby formula as an alternative to breastfeeding in developing countries, its reliance on child labor in cocoa production, and its production and promotion of bottled water among other things. In June 2021, Nestlé found itself in yet another controversy as an internal document from the company came out into the public. The leaked document suggested that 60% of Nestlé's mainstream food product portfolio was unhealthy. Industry experts wondered how Nestlé was going to rebuild its image as a healthy brand and regain customers’ confidence amidst this controversy and the unfavourable dialogue in the public space.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyse the growth of Nestlé into the world’s largest packaged foods & beverages company
• Examine the growth strategies adopted by Nestlé to create its brand image as a healthy foods and beverages company
• Analyze the business environment faced by Nestlé when it was dogged by controversies between the 1970s and 2020
• Examine why Nestlé was one of the most controversial companies in the world
• Investigate Nestlé’s ‘unhealthy’ food portfolio controversy of 2021 and discuss its possible ramifications

Keywords

Nestlé; Swiss food and drink processing conglomerate; consumer demands; healthy foods; health standards; Australia’s health star rating; product innovation and acquisitions; corporate controversies; crisis management; Rebranding; Brand image