With revenues of approximately $10 billion in 1977, Nestle was the world's largest food processing company and had sales greater than the combined sales of Coca-Cola, Pepsi, and United Brands. One of Nestle's products, sold in many countries nationwide, is infant formula. Nestle sells this as an alternative feeding method for women who cannot, or choose not, to breastfeed (bottle fed babies can be fed by anyone and can be fed less frequently than breastfed babies), and as a supplement for older babies experiencing a "nutrition gap" (a need for extra nutrition after the baby reaches a certain age, usually about 6 months).
Because of unsanitary water supplies, babies were getting sick, and, in some cases, dying, after being fed infant formula in Third World countries mixed with contaminated water. For example, in the Amazon jungle in Peru, mothers were mixing the formula with water from rivers which also served as the local laundry and toilet.
Many parents, unable to afford the proper amounts of formula (estimated as costing as much as 50% of a family's income in the poorer areas), diluted the formula to make it last longer. Some even believed the bottle itself had nutritional value and just filled it with water. Due to the high cost of fuel for boiling water, mothers also often prepared large batches of formula at one time, then stored it without refrigeration. Bottles were also washed in cold water. These practices led to an increased possibility of diarrhea and other disease.
There had been a sharp decrease in breastfeeding throughout the Third World. Breast feeding is generally the healthiest way of feeding infants due to the antibodies passed on to the baby through the mother's milk. It is also, of course, the least expensive way of feeding babies. Once a new mother chooses to bottle-feed her infant rather than breastfeed, breastfeeding becomes biologically impossible.
One of Nestle's major programs for promoting infant formula in the Third World was to send sales people (often working on commission) to the homes of mothers of newborns. These salespeople wore white hospital uniforms and were commonly referred to as "milk nurses" or "mother-craft nurses". Free samples of infant formula were provided to hospitals and doctors were encouraged to distribute these samples to new mothers, using arguments based on potential nutritional benefits (see later discussion). In some cases, bottles were also supplied. Hospitals were also supplied with free formula to use for feeding newborns in hospital nurseries. Information pamphlets describing correct and incorrect ways to feed a baby were distributed widely through hospitals and clinics and directly to new mothers. These pamphlets discussed proper and improper ways to bottle feed a baby. The earliest versions of these pamphlets in some countries did not mention breastfeeding. Later pamphlets included a discussion of breastfeeding and depicted pictures of both breastfeeding and bottle feeding mothers.
Advertising was placed on television and radio, in magazines, on posters in hospitals and clinics, on billboards, and through loudspeaker vans. People from a wide variety of socioeconomic and environmental situations were exposed to the advertising. Television and magazine advertising depicted healthy babies being bottle fed and clever radio jingles touted the "white man's powder that will make baby grow and glow".
INFACT and the Third World Action Group accused Nestle of unethically persuading nervous mothers of newborns that bottle feeding was best for their babies. They argued that mass media advertising was reaching mothers in a wide variety of situations, including many who could not afford the formula or who did not have suitable water supplies and sanitary conditions for preparing the formula. Accusers argued that many local supplements to breast feeding (like rice cereals, eggs, and fruit juice) provided safer alternatives for babies.
They also argued that placement of formula in the hospitals gave new mothers the impression that formula was the right choice for their babies and caused them to assume this was the best way to give an infant a healthy start in life. Nestle was also accused of "hooking" these new mothers on infant formula by inducing them to use the free sample, thereby losing their own biological milk supply and becoming dependent on commercial formula. Additionally, the company was accused of deceiving mothers in isolated areas into thinking the milk nurses were real nurses who were coming to give them unbiased advice on the best way to feed their babies, while in fact most were commissioned salespeople for Nestle.
The two groups also argued that the heavy use of pictures in advertisements and posters (to overcome literacy barriers) gave a potential impression that bottle feeding was as good as or better than breast feeding (due to more pictures showing bottle feeding than breast feeding even though the words in later versions said that breast feeding was better).
Nestle argued that it was important to introduce infant formula into the Third World market because the "nutrition gap" requiring supplements to breast milk to insure adequate nutrition for babies was especially evident in Third World countries. Here, mothers were undernourished and might not be able to produce enough nourishment for their babies, especially after about 3 months of age. Infant formula provides a safer alternative to many of the local substitutes, often prepared with contaminated water or of products with insufficient nutrition for the babies. Nestle claims to have never supported bottle feeding over breast feeding, but to have always supported bottle feeding primarily as a supplement to breast feeding. The company says it has always encouraged breast feeding as the best way to feed a baby (and it demonstrated this with 1913 samples of literature promoting breast feeding).
Nestle also argues that many women in the Third World need the convenience of bottle feeding due to heavy work schedules in the field when they are not available to breast feed their babies. Additionally, Nestle defends its promotion by asserting that proper instructions on how to prepare the formula, including boiling of water and all utensils and how much formula to use, are spelled out clearly on all cans of formula.
Questions
1. Should Nestle change its promotion practices? If so, how? If not, why not?
2. What types of new or additional promotions do you think Nestle should use?
3. Could Nestle have avoided the accusations and the boycott and still effectively marketed infant formula in the Third World? How might they have better done this?
4. Should Nestle be considered to be responsible for the killing of babies in the Third World? What are the responsibilities of companies in this or similar situations?
* This case was prepared by Dr. Kathy Winsted using material from
a case about Nestle in the back of International Marketing, eighth edition,
by Philip Cateora, and from a Harvard Business School case written by Neil
Harrison and titled Nestle Alimentana S.A. - Infant Formula.
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