With Nestlé facing pressure to break up the company and a CPG market that is no longer obediently accepting of its practices, its CEO is committed to buying and promoting the value of its brands.
It could disrupt them instead. Here’s why:
Brands ain’t what they used to be.
To say that traditional branding is under pressure would be an understatement; Nestlé, like Procter & Gamble and its other conglomerate competitors, is seeing premium prices fall and marketing costs rise (and outcomes become less reliable) as consumers want to buy local, healthy, and/or simply less often.
Brands were the creation of the mass media that promulgated them; this futurist suggests that they helped us make decisions that we didn’t care about. I’d add that they replaced all of the tangible decision-making criteria shoppers once relied upon with unprovable promises and imaginary associations.
All that value doesn’t really exist without media content that insists so, and the bad news for Nestlé and its ilk is that their utility doesn’t hold up to the revelations of Internet search, user comments, and true buyer-provider connections.
So it’s not encouraging that the company will continue to rely on them, however the approach is modified to reflect marketers’ latest insights about artisanal this or sustainable that.
Financial legerdemain is a poor substitute for business strategy.
A hedge fund investor is the last person who should be telling Nestlé what to do, in that there’s no way that selling assets, reorganizing divisions, or cutting costs will make a dent in the bigger problems it faces (though such actions could net boatloads of money for the financier).
This is also true for marketers’ new fascination with metrics, or the idea that consumers’ behaviors need to be quantified and tracked, and every expenditure linked directly to a measurable outcome. Accountability is a good idea, of course, but it’s not a new one, and deconstructing communications processes into bits of data is no different than dismantling corporate structures into dollars and cents.
Data and dollars are tools that can tell if, when, and how something performs, but why — or what’s next — requires smarts, creativity, and guts that, so far, exist beyond the reach of marketing dashboards or accounting spreadsheets. The days of calling an AI “leader” are still in the future; today still requires human beings to step outside the boxes of quantification to qualify as disruptors.
So what could disruption look like?
The short answer is that I don’t know, but I do wonder whether a rethink of brands is in order; I’ve said as much since I wrote my first book in 2008, Branding Only Works on Cattle.
For instance, what if it looked like the disruption in media? Nestlé would replace static CPG brands conceived by marketers with living relationships defined by consumers and businesses. It wouldn’t try to use viral videos to hawkl a new coffee flavor but, rather, share decision-making with its customers about things like supply chain and distribution. Less selling, and more populism.
Maybe transactions would be based on mutual sharing of “private” information, so both sides got closer (instead of one side collecting all the data). The best customers might also know the most about a brand, and visa versa.
There’s more here…what about integrating brands into people’s lives?
Where’s the Nestlé chocolate bar that directly supports women’s empowerment, like for real, and doesn’t just allocate a small contribution to some marketing cause (or simply celebrate it in expensive ads)? What about a coffee brand that comes with tuition credits? Could a pet food product be a way for dog and cat lovers to fund and participate into research into animal emotions and consciousness (or whatever)?
Like I said, I don’t have the answers, but I’m pretty sure that reorganizing divisions, buying companies, and using new marketing tools to sell old ideas about branding aren’t going to cut it.
Nestlé could ask deeper and more questions about its brands, which are already being disrupted whether or not it helps drive those changes.