Analysis: Nestlé’s transparency on unhealthy products a saving grace from PR crisis

Nestlé has confirmed to MARKETING-INTERACTIVE that it is working on a company-wide project to update its pioneering nutrition and health strategy. This comes after the Financial Times quoted a Nestlé internal presentation in its report, stating that the FMCG brand recognises that over 60% of its mainstream food and drinks products are unhealthy. Nestlé also allegedly said in its internal presentation that certain categories “will never be healthy” no matter how many changes it makes, FT reported. This assessment is said to have covered about half of Nestlé’s overall portfolio because the analysis excluded categories such as baby formula, pet food, coffee and medical nutrition.

"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," the spokesperson said. The company is also first focusing on assessing the part its food and beverage portfolio that can be measured against external nutrition profiling systems.

According to the spokesperson, systems such as the Health Star Rating and Nutri-Score are useful in this regard and enable consumers to make informed choices. However, the spokesperson clarified that these systems do not capture everything.

"About half of our sales are not covered by these systems. That includes categories such as infant nutrition, specialised health products and pet food, which follow regulated nutrition standards," the spokesperson explained. Nonetheless, Nestlé's efforts to meet changing consumers needs and update its nutrition strategy builds on a foundation of work over decades to improve the nutritional footprint of its products. For example, the brand said it has reduced the sugars and sodium in its products significantly in the past two decades, about 14% to 15% in the past seven years alone. It is also adding ingredients such as whole grain, protein, fibres and micronutrients. In recent years, it has launched products for kids and families that meet external nutrition yardsticks, the spokesperson said, adding that it has also distributed billions of micronutrient doses via our affordable and nutritious products.

On the advertising and marketing front, Nestlé does not advertise to children under the age of six.

It also introduced stricter nutritional criteria for foods and beverages marketed to children age six through 12. For example, it does not market confectionery, biscuits or ice cream to children. It also works with public health organisations, governments and other stakeholders to tackle the obesity problem. In 2020, the brand claims to have reached over 33 million through its Nestlé for Healthier Kids programme that helps parents and caregivers raise healthier kids.

We believe that a healthy diet means finding a balance between well-being and enjoyment. This includes having some space for indulgent foods, consumed in moderation.

Without a doubt, exposés within large MNCs such as Nestlé diminish the brand's reputation among consumers and disrupts its business as well as marketing and communications initiatives, an industry player who spoke to MARKETING-INTERACTIVE on condition of anonymity said. What is most irredeemable amidst all this, is the permanent damage it does to consumer trust, which she considers the "most invaluable currency in the digital age". 

While Nestlé might have found itself in a tricky situation, she said the brand's statement on working on updating its nutrition and health strategy should be seen as a commitment. She explained:

This is extremely important and positive for Nestlé as simply apologising is not sufficient; consumers want acknowledgement, proactiveness and more importantly, action.

However, the industry player said a business such as Nestlé is going to increasingly face competition from health-focused products such as Impossible Meat and Oatly as consumers are becoming more health-conscious. This will obviously require Nestle to develop communications that assures consumers that its science and research has created a product that is healthy in order to sell. 

"As a PR professional and a devourer of KitKat and Maggi noodles in copious quantities, here's my advice to Nestle: I eat them knowing fully well they are not entirely healthy. Marketing them as guilty indulgences for their chocolatey or slurpy deliciousness will not make me any less of a consumer," she explained.

She pointed out that Nestlé also addressed this point in its statement about a healthy diet being a balance between well-being and enjoyment, which includes having some space for indulgent foods, consumed in moderation. According to her, this message should be amplified more through its marketing communications campaigns. 

At first glance, this might seem like a crisis waiting to boil over for Nestlé. However, this could be good for the brand in the long run. Sedgwick Richardson's Southeast Asia MD Dominic Mason explained that this could enhance the brand's reputation if the business is configuring itself around a sustainable healthy nutrition strategy and Nestlé is seen as transparent in signalling its intent.

"Perfection is elusive. In striving with transparency towards a healthier and more nutritious portfolio, some product brands will make it and others will fall along the way. This is a marathon, not a sprint and the Nestle brand will likely forge ahead," he added. Mason also said Nestlé is smart to acknowledge that a current business model is unsustainable when it has a clear roadmap to a sustainable future. 

Agreeing with them is Asiya Bakht, former regional communications director at BBH Asia, who said consumers do not really associate Nestlé with some of its brands and already have some level of awareness on the unhealthy nature of packaged foods. Hence, she does not view this as damaging Nestlé's brand reputation in a big way. "The fact that the company has announced that it is reviewing and updating its nutrition strategy could help from a reputation perspective," she added.

Likewise, it is also important for consumers to understand that not all of Nestlé's products are meant to be staples, Jin Ooi, managing director of Distilleri, said. In fact, some of its products, such as those in the confectionery category, are meant to be indulgences taken in moderation. He applauded Nestlé, a brand with a rich history and global popularity, for coming forward to admit that it can and will do better. "It is good that Nestlé has already taken the first few steps of committing to updating its nutrition standards, and also prominently displaying the ingredients in its products," he added.

One Nestlé brand well-known among consumers is MILO, which has in recent years reduced the amount of sugar used in its products. In 2018, the brand launched a variant of the drink in Singapore with no added table sugar, also known as gao kosong. A year later, it launched a version of MILO in Australia without cane sugar. 

What can Nestlé do to earn consumer trust?

To earn brand trust from consumers, Ooi said the FMCG giant can encourage responsible consumption of its confectionery products. For example, besides the prominent labelling of ingredients, it can also do more by recommending consumption guidelines such as "Do not take more than three servings per week", he explained.

Another way would be brand revitalisation, Sambal Lab's partner Jodh Dheensay said, adding that this is done by identifying and satisfying current and important customer needs. He explained that in those age of conscious consumption, everyone wants some reassurances that what they eat or drink has some measure of health in it. "Nestlé could take the stand that while it is not a health-food company, it does have several products that make the grade; and for the rest, it is working towards being healthier without compromising on taste," he added.

Nonetheless, Dheensay is of the view that when a brand as powerful as Nestlé is willing to take a long hard look at what it really is and where it might have fallen short, it is a sign that it wants to improve itself.

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