Nestlé's New Product Strategy

Nestlé are taking a more family friendly approach to their confectionary advertising, announcing that they would be improving the nutritional content of their products or failing that, stop advertising them to children. The question that needs to be asked is why? Definitely macro-economic forces were at play, but what is the marketing strategy behind this move?

With obesity rife in Australian schools, there has been a lot of pressure on local and federal governments to step up to the plate and do something before it becomes a real problem. To prove the successfulness of this lobbying, new laws were passed last week that banned non-nutritious foods in school tuck-shops. Nestlé are taking a new product strategy in order to realign themselves with the social demand on delicious, yet nutritious snacks, an appeal to the gatekeeper (mum or dad) and an excellent exercise in PR.

Sales are the be all and end all of this new direction and the questionable part of the strategy is of course, who is going to buy a tasteless product or one with little to no brand awareness?Ian Alwill, Nestlé Australia’s Marketing Manager, told ABC local radio, “Food technology will drive us towards is finding ways of reducing those things over time, but still retain taste" and even stated that they currently can't do that with Country Cup Noodlers Alphabet Chicken Soup, Uncle Toby’s Fruit Roll Ups, Nestlé Stars In-cred-i Bites and Wonka Bertie Beetle and will cease advertising immediately.

So the secondary question about advertising really only affects Roll Ups as best I can tell because I have not seen any ad spend going towards the others anyway. The logical conclusion from this is that Nestlé are repositioning themselves as 'healthy' so that they can drive more business through their more successful products. A business manager would call this 'streamlining' their product portfolio.

Now something for the sales people reading this! The nuts and bolts from a distribution point of view is that a companies positioning and the general public perception is the key to accessing these now dormant school markets. The trend data is obviously moving towards a healthy school lunch box, so why not roll with it and reinvent the brand... first movers advantage anyone?

Josh Strawczynski's Opinion:

I like the concept, but I am still not convinced that consumers are changing their buying habits.  Australia is now one of the worlds fattest countries (per capita) and I have seen very little evidence that supports the 'magic taco' theory that we are getting fatter and eating less, therefore the only logical conclusion is that Nestlé were going to pull these products anyway and are just working the room for PR sake.  Am I being to cynical?

Sam Berringer's Opinion:

In a radically different scenario, I believe all the above to be true, other than one major point.  Despite buying habits not changing, public awareness and media pressure is (on obesity and healthy eating), so if I offered you two candy bars and one of them had the perception of being more healthy than the other, what would you choose?  Much like Red Bull and Gatorade releasing their 'sugar free' drinks...a perception of being kind to your body.

Thanks to Dan Palmer for his article at AFN