By Emma Thomasson
VEVEY, Switzerland, Oct 26 (Reuters) – It looks like mission
control: in a Swiss market town, an array of screens in Nestle’s
headquarters tracks online sentiment. Executives watch intently
as California wakes up, smells the coffee – and says whether it
likes it.
This is the nerve centre of the company’s Digital
Acceleration Team. By monitoring conversation about its products
on social media – right down to “realtime recipe tweets” across
the United States – they aim to win over a sometimes hostile
world.
Other companies, such as PepsiCo, Danone and Unilever, have
exploited the opportunities to promote themselves online. But
Nestle is also concentrating on using social media for damage
limitation.
Vilified for years for its sales of baby milk formula in
developing countries, Nestle today is confronting its critics
online as protesters find newer targets, such as the company’s
$7 billion a year bottled water business. The $200 billion food
and beverage group set up its digital team a year ago, and says
it has doubled spending on social media advertising in the last
couple of years.
“People have been complaining about companies forever, but
before they did it at the water cooler or at the bar,” said
Bernhard Warner, co-founder of London-based consultancy Social
Media Influence. “Now they are doing it online and spreading
their complaints to disparate communities.”
Nestle is not the only bottled water producer under
fire. Others including Coca-Cola are also accused of undermining
public water systems. Groups such as Boston-based Corporate
Accountability International, a non-profit which originated in
the protests against Nestle’s infant formula, have alleged for
almost a decade that bottled water makers damage the environment
when they extract the water, waste resources on bottles and
shipping, and take what should be a common good.
The fight matters a lot to Nestle, as it’s the world’s
largest producer of bottled water. Its brands include Poland
Spring, Perrier and San Pellegrino and accounted for almost 8
percent of its sales of 83.6 billion Swiss francs ($85.31
billion) in 2011.
In 2008 it ran an advertisement in Canada claiming that
“bottled water is the most environmentally responsible consumer
product in the world.” Campaigners in North America have
nonetheless persuaded tens of thousands of people to sign a
“Think outside the bottle” pledge to drink water from the tap,
and pushed some U.S. campuses and municipal buildings to ban the
bottled variety.
CODE RED
At HQ, Nestle’s team of Digital Accelerators is tasked with
“listening, engaging, transforming and inspiring.” Each member
spends eight-month stints working in the space with a mini TV
studio, rather like a busy newsroom or trading floor.
Pete Blackshaw, 47-year old head of digital marketing and
global media, is in charge. On a recent weekday, the American
and his staff of 30 to 40-year-olds were monitoring the online
action on such topics as the latest cute dog photo on the Purina
pet food website, or who was drinking Nescafe.
Blackshaw pointed to a map of the world showing
California’s Twitter action. He also highlighted how the
centre’s screens are set up to spot trouble.
“If there is a negative issue emerging, it turns red,” says
Blackshaw, indicating a screen powered by software from
Salesforce.com Inc., which is also used by such brands as Dell
computers and delivery company UPS. It captures millions of
posts each day on topics of interest to Nestle.
“When there is a high number of comments,” Blackshaw adds,
“it alerts you that you need to engage.”
That can mean a real-time online response from a team member
– each has a small flag indicating their country of origin above
their desk – or the team might pass an issue on.
Nestle says it has strict ‘do’s and don’ts’ for how staff
should respond online, including disclosing their relationship
to the company if they discuss a product. At the same time, the
team is inevitably making up some rules as it goes along.
The company does not pay bloggers for pro-Nestle posts and
follows industry ethics codes, disclosing any “consideration” it
gives, such as providing product samples to online reviewers.
Common tricks used by some public figures include faking – or
purchasing – social network followers: California-based web
security research firm Barracuda Labs estimates the average
price for 1,000 ‘robot’ Twitter followers at $18.32 (Facebook
fans are a pricier $35.59 for 1,000).
Nestle does not purchase online popularity.
When it recently thanked its “fans” for reaching 600,000
“Likes” on its main corporate Facebook page, a user identified
as Andrew Wood from Britain retorted: “We are not all fans
however – some have joined so that they can protest about your
ethics and spread word of the long standing boycott of your
products.”
Nestle replied on Facebook: “That’s a fair point, and the
terms ‘fans’ and ‘likes’ may not be the ideal descriptors for
everyone. That said, we value the input and feedback from all
600,000+. Thanks for the feedback.”
TAKE A BREAK
Such responses result from a lesson learnt two years ago,
when Greenpeace posted a spoof ad, watched by nearly 1.5 million
people on YouTube, for Nestle’s KitKat snacks.
The ad showed a bored office worker take “a break” from
shredding documents, to munch on a chocolate wafer finger that –
unnoticed by him – had mutated into an ape-like claw. As he
chewed, it spurted blood. “Give the orang-utan a break,” the
slogan urged. “Stop Nestle buying palm oil from companies that
destroy the rainforests.”
Nestle initially made the problem worse, earning an entry in
a book by the consultant Bernhard Warner about “the 50 greatest
social media screw-ups”. It tried to get the video pulled and
threatened to delete hostile messages on its Facebook page.
No matter what your views on palm oil, that reaction was
“absolutely ‘verboten’ for digital natives,” said Warner. “All
corporates looked at this and thought ‘oh my goodness, how
vulnerable are we?'”
Eventually, after more than 200,000 protest emails, Nestle
sat its officials down with Greenpeace to plan a policy against
deforestation.
“One of the most significant things that has happened in the
corporate world in the last 10 years is this idea of being
respectful of and monitoring not just what your fans have to say
but also your critics,” said Warner. “It has completely changed
the world of crisis management and reputation management and all
the training that goes into it.”
Nestle has climbed to 12th spot from 16th in 2011 in the
Reputation Institute’s index of the world’s most reputable
companies.
“They have a very strong reputation among the general
public,” said Nicolas Trad of the New York-based consultancy
firm, which surveys 100,000 consumers for an annual reputation
survey. “However, looking a little bit deeper, we find that
perceptions of key opinion leaders – such as academics,
regulators, nutritionists, NGOs and the like – are much weaker
than those of consumers,” he said. “This is risky as this group
is often ahead of the curve.”
PURE LIFE
On the day Nestle’s Digital Accelerators were monitoring
online responses to cute dog photos, they were also on the
lookout for word on its water business.
Chairman Peter Brabeck had posted a blog in response to
“Bottled Life,” a documentary criticising Nestle that was
released earlier this year. The documentary, shown in cinemas in
Switzerland as well as at film festivals and on European TV
channel Arte, alleges Nestle is “intent on amassing resource
rights worldwide with the aim of dominating the water market of
the future.”
In his blog, Nestle chairman Brabeck sought to put such
criticism into the context of a broader global crisis of water
scarcity. “This is the most vital issue of our time, and in this
big picture, bottled water is rather irrelevant,” he wrote.
Among the film’s targets is Pure Life, the world’s
top-selling bottled water brand, which is produced by Nestle and
uses purified groundwater – the same water as comes out of the
tap – with added minerals. Pure Life is a budget brand largely
aimed at emerging markets, where demand is growing.
The movie alleges a bottling plant for Pure Life in Pakistan
may be contributing to a falling water table there. Nestle
denies this, saying the amount used by its plant at Sheikhupura
near Lahore is too small.
In Pakistan, there’s no conclusive evidence on either side.
Data from the province of Punjab show no significant variation
in the water table at testing stations in the region, but local
water authorities do not maintain data on how much groundwater
individual companies or industries pump.
THE AMPLIFIER
History shows the power of such objections.
Around a decade ago, a California-based NGO publicised
locals’ worries that a Coke bottling plant in Kerala in India
was damaging their water supply. The claims were rejected by
Coke but eventually resulted in officials closing the plant. A
government-appointed committee proposed that Coca-Cola pay
damages for causing “environmental degradation by
over-extraction of ground water.”
More than 1 million people have so far watched “Bottled
Life” – not a huge audience by global standards. But social
media is “the amplifier”, as Blackshaw, who previously worked as
a digital brand manager at Proctor & Gamble, says.
Nestle’s global critics have already picked up the
documentary. “We are calling on Nestle to come clean about where
the water is coming from and stop undermining local control of
water,” said Kristin Urquiza of Corporate Accountability
International. “Nestle should be concerned about how this is
hurting its brand image.”
The company has not engaged directly with the film makers:
it says it responded to their questions on paper, but declined
to make executives available on camera as it knew the
documentary would be “polemical.”
In his blog, Brabeck wrote that the film “illustrated a
whole spectrum of perceptions, misperceptions and allegations
concerning this part of our business.”
A woman named Deirdre Mistarz asked on the blog about a
suggestion in the film that Nestle is not willing to provide
drinking water for people near the Pakistan plant: “Are the poor
to be treated as lepers, to be deprived of the basic human need
of clean water; are they to be extinguished because they are so
poor they cannot help to fill the coffers of Nestle?”
Two hours later, Brabeck responded: “This is not true. We
have installed two water filtration facilities in the region
which can be accessed by more than 10,000 people and we are in
the process of building a third.”
Of course, Nestle’s Digital Accelerators also use social
media for traditional publicity. A French team member has
developed an app that plays a cookery video when a package code
is scanned. And Nestle said sales of Perrier water had a strong
start to the year, helped by a video which was popular on
YouTube. Its story: to save a melting world, a glamorous woman
drinks Perrier.
