Digital/Online Platforms (Social Media and Website)

• Nestle spent US$633.4 million on paid media in the US in 2017, paid media means any form of paid advertising on the Internet.

Nestle Advertising Spend By Print

• Nestle print expenses reached US$152 million in US.

Helpful Findings

• Nestle spent US$30.6 million U.S. dollars on internet advertising in the US in 2013.
• In 2017, Nestle spent US$7.2 billion on global advertising efforts.
• In 2018, Nestle invested US$2.2 billion in advertising in the US.
• Nestle spent under $100 million on advertising in digital, print, and national TV in the last year.
• Nestle was expected to maintain its 2016 advertising expenditure in 2017.

Research Strategy:

Globally

Regionally

Media Radar

Triangulation

Helpful Findings

• Nestlé spent $7.2 billion on advertising globally in 2017. The company spent $9.2 billion and $4.2 billion on advertising in 2016 and 2015 respectively.
• Nestlé spent $2.2 billion on advertising in the US in 2018.
• According to Kantar Media, "Nestlé spent $633.4 million on paid media efforts in the U.S. alone in 2017, down slightly from the prior year when it dished out just under $700 million on advertising."
• "Nestle India spent Rs567.02 crore on advertising and sales promotion in the fiscal year ended 31 December 2016."
• In 2013, Nestle spent $30.6 million on internet advertising in the U.S. Given that the company's US revenue in 2013 was $23.46 billion (CHF 23.33 billion converted to USD), the company spent about 0.13% ($30.6 million/$23.33 billion) of its revenue in the US on internet advertising.
• If we assume the company spent a similar percentage of its global revenue in 2018 on internet advertising globally, it would mean that the company spent about $119.5 million (0.13% * $91.9 billion (CHF 91.4 to USD)) on internet advertising globally in 2018.

Research Strategy

• Nestle spent about $633 million on paid media efforts in the U.S. alone in 2017, according to Ad Week. That was down from about $700 million in 2016.
• Nestle's ad expenditures in the country considerably increased in 2018. Statista estimates that Nestle invested $2.2 billion in advertising in the United States in that year.
• According to AdAge, Nestle's U.S. media spending on Gerber fell 10.9% to nearly $76 million in 2016.
• Media Radar estimates that Nestlé Stouffer's spent under $100 million on advertising in digital, print, and national T. V last year.
• Additionally, Media radar estimates that Nestlé's Coffe Mate spent $100 million on advertising in digital, print, and national T.V.

RESEARCH STRATEGY

Cerelac

• The Cerelac campaign's messaging focuses on the product providing a nutritionally balanced baby food, which incentivizes parents to purchase the product. The campaign's tagline is: "Because tomorrow starts today." The campaign's marketing channels are print and social media (e.g., Facebook and Twitter).

Gerber Generations

• The central message of the Gerber Generations campaign is that the food babies ingest within their first five years can affect their health for the rest of their lives. This encourages parents to buy Gerber products for their children. The tagline for this campaign is: "Start healthy, Stay healthy [sic]."
• The campaign's marketing channels are broadcast television, out-of-home advertising, and print.

Cookie Crisp

• The message of the Cookie Crisp campaign is that the cereal provides a healthy yet flavorful breakfast. The campaign's tagline is: "Cookie Crisp, next time it is mine!" The campaign's marketing channels are YouTube and broadcast television.

Nestlé Pure Life

• The objective of the Pure Life campaign's message is to inspire a future that brighter and healthier through the consumption of water. The campaign's tagline is: "Pure life begins now." The campaign's marketing channels are YouTube and other Internet videos.

Direct to Consumer E-Commerce

• Nestle has invested in creating a consumer database that has enabled them to deliver personalized products, messages, and services directly to consumers. At the moment 10% of all consumers contacts are personalized
• The results were realized in 2018 as their e-commerce sales grew by 18% and reaching an overall of 7.4% of their total sales.
• Other collaborations that involve the D2C E-commerce employed by Nestle are Convenience, Natural, Club Value as well as Specialty stores and Out-of-Home.

Mobile Marketing

• Nestle has time and again collaborated with communication agencies to create 3D renders of their products and eye-catching animations to promote their products.
• Global communications' agency Maxus and Adspruce have run an awareness campaign in Pakistan using their cutting edge rich media technology. This campaign has proved to be a success and has allowed Nestle to tap into the Pakistani customer base.
• The campaign in Pakistan was mainly aimed at raising awareness about the new Nestle Pure Life brand identity.

Digital Acceleration Team(DAT)

• Nestle has created a digital acceleration team whose main mandate is to vet potential advertising technology to find unique ways of digital advertising. This is to enable Nestle to stay relevant in the ever-changing dynamic world of digital advertising.
• DAT is also charged with training employees on the digital side of the business. This ensures the employees stay relevant and updated on social media platforms to aid in digital marketing.
• In addition to this, DAT is also involved in damage control and reputation management. 
• Nestle has an approximate 308,000 people around the world employed from 2008 to 2018. Let's assume all these employees decide to aid in social media marketing to their varied network then that outreach is enormous.

Social Networking

• Nestle's 2,000 brands have 170 million followers online with its Facebook page having more than 850,000 likes and the Twitter handle has more than 22,000 followers. 

• Besides, Nestle publishes 1300 pieces of unique content each day and more than 200,000 employees are active in their internal social media network.
• Their strategy of listening and engaging their followers on social media platforms have earned Nestle a reputation with their customers.
•  Nestle India, for instance, released a rap video featuring animated babies rapping about the virtues of breastfeeding. This video already boasts more than 2.5 million views on YouTube. This is a media strategy to gain enormous media exposure throughout India.

Brand Hooking

• Nestle's chocolate bar, KitKat, has been in the recent past used by Google as a name for its mobile operating system. Google has a large worldwide following and the android system is used in equal measure. This strategy has served to promote the KitKat brand among android and users of Google products.
• Google has more than 21.6M followers on Twitter and the launch of KitKat as a brand for their Mobile Operating System has had a vast media outreach.
• Kitkat is now an iconic brand by Nestle present in more than 80 countries. With the establishment of Kitkat Chocolatory online, one can access an order, place it and even share or send it to a dear one.

1. Bottled Water Fraud

• Nestle is facing a lawsuit over its Poland Spring water brand in the U.S. Consumers from eight U.S. states said that Nestlé defrauded them into overpaying for Poland Spring by labeling it as “100% Natural Spring Water” but according to them, not one drop came from a genuine spring.
• Nestlé mostly sells “spring” water, rather than sparkling, purified, or mineral water. Nestlé understands that consumers in the US find greater cachet in spring water and they are willing to pay a premium.

• Nestlé has continued to sell Poland Spring water, with annual revenues between $300 million and $900 million, the lawsuit is looking to prevent Nestle Waters from continuing to sell under the current terms.
• According to the suit, the water is being drawn from wells in low-lying populated areas near potential sources of contamination; as stated, “If consumers knew … they would not buy, or would not pay premium prices for, Poland Spring Water products.”
• The lawsuit is seeking an unspecified amount of compensatory and punitive damages.

• Nestlé Waters argued that there was “no fraud” because their water met the state requirements. “We remain highly confident in our legal position and will continue to defend our Poland Spring brand vigorously against this meritless lawsuit,” a statement from the spokeswoman of Nestle Waters. “Poland Spring brand natural spring water is just what it says it is — 100 percent natural spring water.”
• The company asked a judge to dismiss the lawsuit, or at least dismiss it in deference to the F.D.A.
• In a statement given to Vox, a spokesperson from Nestlé Waters called the lawsuit “meritless” and said that the company will continue to fight it.
• After the initial lawsuit was filed against Poland Spring in 2017, the company hired the law firm DLA Piper to do an independent investigation of its water. The law firm found that the water sources of the company “meet all FDA regulations defining spring water.”

2. Unhappy Investors

•  Daniel Loeb, a hedge fund manager fired off a letter and a 34-page presentation in 2017 to the board chairman and chief executive officer of Nestle, urging them to sell more of the businesses that do not fit and untangle its corporate structure. Loeb underlined that he is not happy with the company’s effort to buy back shares and that the sale of the U.S. confectionery business to a rival "has not gone far enough". Daniel Loeb also launched a website, www.Nestlenow.com, to push his case publicly.
• Another investor who has 8 million shares in Nestle said that "his firm is sending a letter to Schneider and his team to throw their support behind Loeb".

• Nestle's chief executive Ulf Mark Schneider hinted that the company was pressured from “activist investors” and said that it was committed to improving its cutting costs and growth.
• Nestle took aggressive steps to reorganize its global operations driven by unhappy investors, cutting hundreds of jobs, and relocating its United States headquarters to lower-cost Arlington, VA, from California.
• Nestle began a transformation with a statement made in early 2018 creating a “digital first” company accelerating its digital transformation.

• Nestlé started changes in the products to meet the new consumers' demands: stripped carrageenan, a thickening agent that some consumers have soured on, out of some of its ice creams. It introduced a new way to shape sugar crystals so less sugar will be needed in some products without sacrificing taste. It has invested in Freshly, which is a subscription meal-kit company, hoping that they will find a new route into people’s pantries.

• Nestlé started a digital transformation strategy creating social media presence for all its subsidiaries by forming close partnerships with Facebook and Google. According to Mr. Olmsted, “An even more defining use of social media within Nestlé has been the company’s development of an innovative internal company social media platform for its more than 200,000 employees,”
• It started to ditch underperforming businesses after coming under fire from activist investor Daniel Loeb and his hedge fund Third Point back in July.
• With pressure from Loeb, Schneider has changed 9% of Nestle’s portfolio so far. This is in line with his plan of trading its 10% by the end of 2020. He has sold off the U.S. confectionery business, the Gerber life assurance unit, while most recently is the dermatology arm. These are done for better-than-expected prices.

Research Strategy:

The Nestlé Baby Milk Formula Controversy

• In February 2018, Nestlé came under fire for violating ethical marketing codes by providing customers with misleading information about the nutritional content of its baby formulas.
• According to a report by the Changing Markets Foundation, Nestlé marketed its baby formulas by likening them to human breast milk even though that is prohibited by the World Health Organization.
• In South Africa, Nestlé used sucrose in its infant formulas whilst marketing its Brazilian and Hong Kong formulas as free from sucrose. It also equated its vanilla-free baby milk powders in Hong Kong as being healthier.
• While there was no clear-cut consumer reaction to this controversy, in previous years there have been boycotts, some of which were dropped. However, a group of organizations in the UK still maintain their Nestlé baby formula boycott which they launched in 1988.
• While Nestlé did not respond to specific questions about the report, a Nestlé spokesperson elaborated their belief that breast milk is the source of nutrition for babies and that their products are meant to serve infants who, for whatever reason, don't have the luxury of being breastfed.

The Nestlé Water Bottling Controversy

• In August this year, Nestlé found itself in yet another controversy regarding its plan to take 1.1 million gallons of water from the public property, Ginnie Springs, to sell as bottled water.
• According to Nestlé, spring water is a renewable source that cannot run out.
•  Critics were opposed to the move saying such an investment was harmful to the environment as the river cannot sustain such a high level of water harvesting.

• Opponents of the above move have launched an online petition and penned dozens of letters of opposition to Nestlé's move ahead of a court decision in early November that will determine whether they go on with their planned operations or not.
• Critics were opposed to the move saying such an investment was harmful to the environment as the river cannot sustain such a high level of water harvesting.

The Nestlé Child Slavery Lawsuits

• In the past, Nestlé has been embroiled in various court battles regarding the use of child labor by their cocoa suppliers.
• In April this year, a proposed class action was filed by plaintiff Renee Walker in the California federal court claiming that child slaves in West Africa harvest cocoa for Nestlé's use, despite claims that its products are "sustainably sourced".
• It is not clear whether the court dismissed the case, as has been the situation with other court cases. Nestlé is actively involved in quashing any lawsuits brought against it.
• To counter claims of the use of child labor, Nestlé has a page on its website demonstrating its efforts to stop child slavery.