NESTLE IN AFRICA 

WHO IS NESTLE? 
Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company,
established in 1866 by brothers George Page and Charles Page, and Farine Lactee
Henri Nestle, founded in 1866 by Henri Nestle. The company grew significantly
during the First World War and again following the Second World War, expanding its
contributions outside its early reduced milk and child formula products. The
company has made several corporate acquisitions, including Crosse & Blackwell in
1950, Findus in 1963, Libby’s in 1971, Rowntree Mackintosh in 1988 and Gerber in
2007. 
Nestle’s products include baby food, bottled water, breakfast cereals, coffee,
confectionery, dairy products, ice cream, pet foods and snacks. 29 of Nestle’s brands
have annual sales of over 1 billion Swiss francs (about $ 1.1 billion), including
Nespresso, Nescafe, KitKat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi. Nestle
has around 450 factories, operates in 86 countries, and employs around 328,000
people. It is one of the main shareholders of L’Oreal, the world’s largest cosmetics
company. 
NESTLE’S MISSION: 
POSITIVELY INFLUENCE THE SOCIAL ENVIRONMENT IN WHICH WE
OPERATE AS RESPONSIBLE CORPORATE CITIZENS, WITH DUE REGARD
FOR THOSE ENVIRONMENTAL STANDARDS AND SOCIETAL ASPIRATIONS
WHICH IMPROVE QUALITY OF LIFE.” 

Environment 
The globalization of Nestle has brought both negative and positive impacts on the environment. 
On one hand, Nestle is working at creating products which are less harmful to the earth. For
example, Nestle Waters uses eco-friendly plastic water bottles that are “made with at least thirty
less plastic than the average half-litter bottle”. Also, the company has succeeded in reducing the
packaging weight due to the collaboration between the Nestle waters R&D centre and the
packaging agencies. Since 2008, greenhouse gas emissions and non-renewable energy impacts for
the packaging process have been reduced by 19 percent in Nestle Waters. In addition, the
company uses renewable energy to reduce greenhouse gas emissions. As a matter of fact, Nestle
Mexico obtains 85 percent of its electricity from wind power. 
On the other hand, Nestlé’s globalization has greater negative effects on the environment such as
pollution and the abuse of resources. For instance, according to Greenpeace, Nestle failed to obey
the regulations in China and discharged huge waste in rivers and lakes there. Also, the company
illegally pumped millions of gallons of water from California’s San Bernardino National Forest
for ten years, which is against the federal law. 
ECONOMY 
Nestle has positively and negatively influenced the economy of many countries.
The positive side is that the company provided job and training opportunities for
people. For example, Nestle has been built in Vietnam in order to meet the
demands for its Nescafe coffee products, and has created more than 200 new jobs
in the area. Located in the Dong Nai province, the company manufactures the
products and provides them for the local people and also exports them overseas.
The American Chamber of Commerce in Vietnam reports that Nestlé trained more
than 19,600 coffee farmers in Vietnam in 2012 and aims to engage with 20,000
Vietnamese coffee farmer households within five years. While Nestle brought
employment to the people living in various countries, it has also encouraged child
labour in developing countries. A report by the Fair Labor Association informed
that 1.8 million children in West Africa are at risk of abuse through dangerous
child labour. Although Nestle signed an agreement in 2001 to end the use of child
labour on cocoa farms, Nestle violated the contract. 
SOCIETY & CULTURE 
The impact that globalization has on society and culture are somewhat interconnected.
Nestlé has been known for many things such as the infant formula scandals, instant
noodles with high levels of lead, changing coffee culture and more. However, there are
always two sides to every story. Nestlé has long been accused of harming the health of
infants, specifically those in third-world countries. This baby milk scandal has resulted in
boycotts against the company since the late 70’s. Although Nestlé claims that
breastfeeding is the best, they would hire salesgirls dressed as nurses to appeal to mothers
and give them samples to get them “hooked on” infant formula. Many poor and
undernourished third-world women are physically unable to breast-feed or too
preoccupied with the basics of survival to find the time to do so and Nestlé uses this to
their advantage. These uneducated mothers would dilute the powder milk to make it last
longer and often with contaminated water which harmed their babies. However, recently,
Nestlé has begun developing educational materials for both health care professionals and
parents on the benefits of breastfeeding and run campaigns and seminars. Also, because
they are aware of the health risks polluted water poses to infants, Nestlé does not donate
powder milk formula but instead, funds and ready-to-go foods and drinks. 
WHAT HAS NESTLE DONE IN
AFRICA? 
The images of Africa we see on the nightly news reflect the huge problems facing
the African people – armed conflict, HIV/AIDS, poverty, drought and famine. Africa
and its 832 million people and hundreds of ethnic groups account for 13% of the
global population, but bear a disproportionate burden of the world’s problems. More
than 320 million Africans live on less than USD 1 a day and at least twenty-four
nations faced food shortages in 2004. In terms of per capita incomes, eighteen out of
the twenty bottom-ranking nations are African. More than 25 million people in
Africa have HIV/AIDS and by 2010, the workforce in sub-Saharan Africa will
shrink by 9% as a result of the pandemic. On top of that, 3000 people die every day
of malaria. Despite the problems, Africa shows steady economic growth and
business opportunity for those able to have a long-term vision and solid business
practices. 
Since the late 19th century, Nestlé has steadily built a commercial and manufacturing
presence in Africa that, in 2004, included twenty-seven factories and dozens of other
warehouse and office facilities serving all fifty-four African nations. Nestle employs
approximately 11500 people in Africa, of whom only 120 are non-Africans. They also
create an estimated 50000 additional jobs through the supply chain. Nestlé continues
to invest significantly in Africa; it paid on average about one third of pre-tax profits in
corporate taxes. Their total sales in Africa for 2004 were just under CHF 2.4 billion. 
Nestlé has built this business by following its primary business principle: favour long-
term sustainable growth over short-term transitory profit, building national and
regional companies through consistent investments over many decades. 
As an institutional investor with shareholdings in multinational corporations such as
Nestlé, Nestle believes that governance, social, environmental and ethical factors
present real business risks, which must be managed effectively. Investment in Africa
provides significant opportunities for growth, but it also presents diverse operational
challenges for companies. In developing countries particularly, governance, social,
environmental and ethical issues can impact company performance and value. For
example, in Africa today, two labour issues are having a major effect on business: the
rise in HIV/AIDS infection rates in sub Saharan Africa and significant incidences of
child labour. 
210,000 people in Eastern Ethiopia got access to clean drinking water as part of the Nestlé
partnership with the Office of the United Nations High Commissioner for Refugees (UNHCR).
“Before, we used to walk a long way to get water and often there were fights. Now, no more – we
all benefit,” said Rukia Abdi Ahmed, a refugee in the area. Rukia is one of 30000 who fled war at
home a decade ago. She and many others have been living in 
Ethiopia, displaced, ever since. The Geneva-based UNHCR, established in 1951, has been helping
them for ten years with food, water, health care and education. In 2003, UNHCR and Nestlé teamed
up to address the water needs of the refugees and the local communities around them. Nestlé
contributed more than USD 700000, 
along with ongoing technical expertise. The result: a multi-faceted water system consisting of
rehabilitated wells, an improved pumping and purification station connected to a 22-kilometre
pipeline, new water taps in adjacent villages and a new dam to capture rainfall. 
“Rather than just writing cheques, companies like Nestlé are becoming more involved in helping
deliver on the goals of the projects themselves, with technical expertise,” said Linda Merieau,
Senior Corporate Relations Officer for the United Nations High Commissioner for Refugees. “We
need their financial contributions, but we can also profit from their expertise.” The Nestlé Waters
technical team includes a hydrogeologist and a water resources manager, who have been working
with both UNHCR and the local Ethiopian water authority to design systems for managing the water
supply, maintaining the pipeline and pumping station, rehabilitating old wells and testing the water.
Local authorities will take over the longterm operation and maintenance of the system in mid 2005. 
NESTLE & COFFEE 
Nestlé has recently begun a programme aimed at improving coffee farmers’ incomes
on a long-term sustainable basis in the broad scale coffee market. The programme is
based on giving the farmer the tools to compete successfully in the open market,
rather than paying the farmer a minimum price, which will not necessarily help him
to improve his technique. The farmer is also given an income supplement for three
years while he also receives assistance to make improvements in his farm. The
programme is underway in Ethiopia and El Salvador, where agricultural experts
work with farmers to find a way to compete successfully in the open coffee market,
through improving coffee tree management, harvest, post harvest treatment and
quality, supporting diversification into other crops and selling directly or through a
local representative to capture more of the sale price. The community also benefits
through investments in infrastructure such as clean water. This is a pilot partnership
between Nestlé and coffee farmers, but its success may set the stage for new
approaches in the global coffee market. 
NESTLE & COCOA 
More than two-thirds of the world’s cocoa supply comes from West Africa. Of that, some 85%
is grown on farms of less than one hectare. Some 1.5 million farmers in Côte d’Ivoire, Ghana,
Cameroon and Nigeria depend on cocoa for their livelihoods. Sustainable cocoa programmes
Nestlé has played a lead role in helping to put into place a series of global industry
partnerships to improve both labour standards in cocoa farming and the living standard for
farmers and their families. These include the Sustainable Tree Crops Programme (a joint
industry USAID programme which draws together a number of international donor 
agencies like the World Bank and CIDA (Canadian International Development Agency) in
efforts to improve cocoa production techniques, yields etc.); the West African Commercial
Agriculture Programme (implemented by the International Labour Organisation which is
focused on educating communities and farmers about the worst forms of child labour and
helping countries and communities to take action to eliminate these problems); and the
International Cocoa Initiative which is working to promote best practices and help sensitise
communities towards child labour issues and develop capacity to address them. Nestlé is
represented on the board of the ICI. 
UNDERSTANDING THE AFRICAN
MARKETPLACE AND ITS CONSUMERS 
A typical African consumer? There is no such thing. With vastly varying incomes, dozens
of ethnic groups and cultural food preferences, African consumers make for a diverse
market. As it does elsewhere, Nestlé tailors its products to the local culture and taste. They
conduct extensive consumer testing and market research to understand their needs and vary
products to cater to local food preferences. they also continuously improve their products at
their many research and development centres. On a continent with special nutritional needs
and huge income disparities – a high of USD 2700 per person in South Africa and low of
USD 100 per person in Ethiopia – they pay special attention to making products both
nutritious and affordable. A majority of African consumers have the potential and want to
participate in the market economy even at a modest level and the key is to tailor products to
their specific needs and spending power. For example, Maggi bouillon, made with iodised
salt, is the fastest growing Nestlé product in Guinea, Cameroon, Côte d’Ivoire – countries
that have per capita incomes of USD 350 to USD 600. A key factor is the ability to buy
small quantities on an almost daily basis. 
Another example is Milo, the vitamin and mineral fortified energy drink, which is
popular in Ghana and Nigeria, countries with per capita incomes around USD 280.
Nestlé also caters to the growing middle-class and others with greater spending
power. For example, South African consumers, who tend to have higher income
levels, buy more breakfast cereals. They can also afford more specialised products,
such as those in health nutrition, for hospital patients and others with specific dietary
needs. 
REFERENCES: 
www.Nestle.com 
www.ukessays.com 
www.ICUHighschool.com 
www.reliableplant.com 
www.nestle-waters.com 
www.FinancialTimes.com