Nestle
Marketing Case Study
Almudena Pitarque
Spring 2011
COMPANY BACKGROUND
Until 1994, Nestle USA utilized only limited Hispanic advertising. However, as the spending of the
Hispanic people in the USA grew, they started to think about putting more efforts on that audience.
Thus, in 1994, when the Latino population spent over $188 billion annually in the USA, Nestle was
planning a major ethnic marketing strategy. They started by looking for an advertising agency, for
what they reviewed five possibilities: four California shops and one Dallas agency (Krajewski,
1994). The winner was Siboney USA, based in Dallas, which was awarded with a $10-million
account (Castaneda, 1994). Nestle's previous Hispanic Spending had peaked at about $3 million
annually. The first brands that Nestle started to target to the Hispanic audience through this agency
were Taster's Choice Coffee, Carnation Coffee-Mate, Nestle' Quick, Stouffer's Lean Cuisine, Alpo
and Friskies Pet Foods. These first advertising efforts were focused on top Hispanic markets,
including Los Angeles, Miami and Dallas. Nestle USA, based in California, has been targeting the
Hispanic audience for 17 years (Stuart, 1994).
According to Brad Alford, CEO of Nestle USA, the company discovered the Latino Market about
120 years ago, but it was only in the 1990s that they realized their potential. “You cannot live in the
United States and particularly in Southern California, where we live, and not know there's a huge
amount of Hispanic immigrants living there”, states Alford (Arredondo, 2008). So when the Latino
market was booming in the 90s, especially Mexicans, Nestle started to import some Mexican
products for domestic distribution. However, these efforts were not accompanied by any advertising
or in-store promotions. It was just a trading business at one point. The real advertising efforts
started in 1994, although it was still advertising of Latin or American products of the company
without any adaptation.
Over the end of the 80s, Nestle established a division called “Confections and Emerging Markets”
with the function of exploring new opportunities. Since 2005, the Latino market in the United States
has become its main focus. When Frank Higgins took over the division that year, things changed
drastically. The division started an aggressive strategy to repackage and adapt Mexican brands in
order to promote them among Latinos in the United States and begin its introduction to the general
market as well (Arredondo, 2008).
STRATEGIES AND IMPLEMENTATION
The first distinction I would like to make regarding the strategies of Nestle is among three types of
products targeted to the Latin market: Latin products imported to the United States without
adaptation, Latin products imported to the United States with some adaptation and finally, American
products targeted also to the Latin market.
In first place, as I have stated before, the company started to target the Latin market in the US by
importing Latin products from their home countries with no adaptation, and they keep
implementing this strategy among others nowadays. Some Mexican brands that have crossed over
into the United States are Abuelita, a Mexican-style and cinnamon-based chocolate brand; La
Lechera, a sweetened condensed milk product that has been present in Latin America and Spain for
nearly a century; coffeemilk Nescafe Cafe con Leche; and chocolate bar Carlos V (Arredondo,
2008). This last brand was first introduced in 2006 in Southern California through a radio campaign
and an in-store program in Hispanic-area grocery stores (Schemelzer, 2006). The company also
goes after non-Mexican Latino consumers with products like Maggie seasonings, well known in
Central and South America.
In second place, we can distinguish those Latin products that have been adapted for Latinos in the
US. This adaptation has taken two ways: a simple repackaging and the development of new
products. On the one hand, although they have retained their names and are exactly the same
product, the labels of those imported Latin products are now printed bilingual, sometimes with a bit
of “Spanglish”. On the other hand, some products have been developed in order to be adapted to the
new life that Latinos face in the US. CEO Alford points to the fast-paced, pragmatic American
lifestyle and states that “as an immigrant, you have to adapt to the new country that you are in. Now
Latinos want a way to prepare these products very quickly”. That's why in 2007, both Abuelita and
La Lechera debuted in squeeze bottles. Alford states that they're “trying to take those brands and to
some grade 'anglicize' them to fit what immigrants face in the US” (Arredondo, 2008).
In third place, Nestle is also trying to introduce Latinos to some of its US brands. One initiative is
the bilingual website www.MiCocinaLatina.com, which teaches Hispanics how to prepare turkeys
and pumpkin pies for Thanksgiving and other special American foods for different holidays. It also
offers tips for English-speaking lovers of Latin cuisine (Vinueza, 2010).
The second distinction I would like to make in the way Nestle targets the Hispanic market is the
kind of Latinos they target. Traditionally, Nestle has been targeting recent arrived Hispanics,
Spanish-dominant and who know Nestle from their home countries. Kin Jeffery, CMO of Nestle
USA pointed out this: “One of the things we know is that when people migrate to this country from
Latin American countries, they are very familiar with the Nestle trademark. There's a high level of
trust” (Zmuda, 2008). Juan Motta, Nestlé's head of emerging markets-domestic, noted the past year
that Nestlé's focus has been more on unacculturated Hispanics, building on immigrants' brand
loyalty to Nestlé products such as La Lechera that they grew up with in Latin America (Wentz,
2010).
One special market that they have been targeting among Hispanics are Latino mothers, that are the
ones who care about the health and wellness of their families. Two examples of products that have
been targeted to Latino mothers are infant-formula brands such as Nan, targeted to low-income
immigrant mothers (Jordan, 2004); and Nestle Pure Life, a bottled water brand. In 2010, Nestle did
not run general market advertising of this last brand but focused instead on Hispanic advertising
(O'Leary, 2010). The company started the “Vive Sanamente” multi-paltform campaign to promote
these last brand among Hispanics. The target audience was recent U.S. Hispanic immigrants, moms
in particular, who are not acculturated to American products, yet have an affinity for the Nestle
name. To do that, the company hired Cristina Saralegui, a veteran journalist who is known as “the
Hispanic Oprah”. Five separate 30-second TV spots played out on Hispanic-skewing networks such
as Univision, Galavisión and Telefutura with Saralegui dispensing advice on healthy living choices
and the benefits of water as opposed to sweetened drinks. The effort also was supported by print ads
in Ser Padres, Vanidades, Cosmopolitan en Español and People en Español as well as regional radio
spots and interactive websites. Consumers could tell about the healthy changes in the lives
registering in the website www.vivesanamentenestle.com, and doing so they entered a contest with
over $20,000 in prizes, including a grand prize trip for four to Miami, and dinner with Cristina
Saralegui (De Lafuente, 2008).
Despite having traditionally targeted unacculturated Hispanics, Nestle is now trying to target also
bicultural consumers, as the Hispanic market is growing more through U.S. births than immigration
(Wentz, 2010). Thus, at the end of 2009 Nestle started a marketing campaign to target the brand Hot
Pockets to young bicultural Hispanics. The problem that Nestle found here is that they wanted to
sell a frozen hand-held product to young Hispanics who grew up in a culture full of good food,
associated with love and family as well as nourishment. To do that, the company contracted the
services of the agency Casanova Pendrill, which seized on the less-appetizing side of that
abundance: the leftovers, the agency created a campaign distributed just on the Internet through a
video and posters with the Spanglish theme “Cuidado con los leftovers”. This viral campaign
exaggerated the problem of leftovers by creating a fictitious horror movie in the form of a movie
trailer and posters depicting a hungry but unsuspecting young couple pursued by scary leftovers like
a rampaging three-day-old chicken. The message was “Eat what you really want. Hot Pockets.”
Nestlé picked Sacramento, in California, as the campaign's test market, leading up to an invitationonly comedy-club performance by a Hispanic comedian hired to develop a routine about food, scary
leftovers and young Hispanic males (Wentz, 2010).
In April this year, the same agency, Casanova Pendrill, presented its new campaign of Hot Pockets
for Nestlé, targeted to the same audience of Hispanic bilingual teens born in the United States. The
campaign consists on a viral commercial called “Inappropiate Flirting” in which a chicken tries to
flirt with the man who opens the fridge, using both Spanish and English. The message is “Don't let
leftovers seduce you. Eat Hot Pockets”. The commercial is being distributed via Youtube, Facebook
and different blogs and websites visited by the target audience (“Preestreno de Casanova Pendrill
para Nestle”, 2011).
Other different media that the company has been using to target its Hispanic audience is the
traditional mail. On the Hispanic Heritage Month (September 15- October 15), Nestle sends via
mail pamphlets that contain recipes of traditional Latin dishes made with Nestlé products that made
the dish easier to make and less time-wasting, understanding the fast-paced life that Latinos face in
the United States (Diaz, 2010). Latinos can also look up these recipes in the website
www.cocinandoconnestle.com. Furthermore, Nestle sponsors on television a cooking segment
called “Cocinando con Nestle”, that airs every Friday morning in Univision as part of the TV show
“Despierta America”. The segment features the chef Lorena García preparing easy and tasty recipes
made with Nestlé’s popular Latino brands La Lechera, Maggi, Abuelita, Nestlé Media Crema and
Nescafé. Recipes featured each week are designed to bring back memories of traditional, rich Latin
American cuisine (Vinueza, 2010). The videos are available on the website mentioned earlier and
on the company's account on Youtube.
Moreover, Nestle USA is trying to reach the Hispanic audience using handheld devices. The
company created in 2010 a mobile website and iPhone application that draw sweet and savory
recipes from the brand's MiCocinaLatina.com wired website, delivering product and brand
engagement to consumers' mobile phones. Both the mobile Web site and the iPhone application
present content in Spanish and English. King Hill, president of DigiKnow’s Circle 44 Mobile, the
company which developed the application, stated that “the strategy behind making it mobile and
building the iPhone app was to address their Hispanic audience, which happens to be more mobile
than the rest of us”. According to the Pew Internet & American Life Project, in 2009 more than 47
percent of Hispanics used a handheld device to go online, compared to 28 percent of Caucasians.
The mobile website offers full search capabilities of more than 300 recipes for Web-enabled phones.
The iPhone application provides similar capabilities, with a user experience optimized for the
device’s touch screen. It also offers a twist on standard recipe search: with a shake of the iPhone,
the user can generate a random recipe. This development targets Hispanics in general, but specially
Hispanic moms, women in their early 20s to mid-fifties and on up to grandmas, the people who run
the kitchen (Butcher, 2010).
RESULTS AND EVALUATION
Nestle is today a good example of the term “glocal”: a global company that acts locally. The overall
strategy seems to be working. Nestle is satisfied with the consistent 20 percent annual growth rate
in Latino product sales for the last years. In 2008, Nestle USA made over $11 billion in sales, of
which five percent were from the US Latino market (Arredondo, 2008). Regarding to particular
brands, Nestle Pure Life is one that seems to have achieved good results from the Hispanic market.
According to Carolina Rodriguez, the marketing manager of Nestle Waters North America,
“Hispanic sales have been a big contributor to the brand’s growth in America”. She also stated that
“even when general market sales were not growing, Hispanic sales were going up” (O'Leary, 2010).
The two viral compaigns mentioned of the company have had very different results, measured in
visits to the videos on Youtube. While the 2009/2010 commercial, with the theme “Cuidado con los
leftovers” has just received 1,150 visits since its was uploaded on September 2009, the second
commercial, uploaded on April 4th this year and called “Inappropiate Flirting”, has received more
than 24,000 visits in just two weeks.
As Latin population continues to grow by birth rates, Nestle is planning to study more in deep US
born and acculturated Latinos. In 2010, the company joined Latinum, a peer-to-peer business
network that is bringing together Hispanic marketers to share everything from dealing with the need
for better data to hot topics such as the acculturation of Latino consumers. Juan Motta, Nestlé's head
of emerging markets-domestic, said of Latinum, “It's an opportunity to share best practices with
others, and pool resources so we can get smarter about things like how the U.S. Hispanic consumer
is acculturating.” (Wentz, 2010).
MY OPINION
I think Nestle is targeting very good the Hispanic audience. This is a natural market for them,
because Latino women usually spend more time cooking than other US women, and they have
known how to target them with the TV segment “Cocinando con Nestle” and the Nestle Pure Life
campaign. Also I liked the idea of adapting some Latino products to the American life by creating a
squeeze bottle version. It's a simple idea but it works. Regarding their viral campaigns to promote
their brand Hot Pockets, it's a very good idea to target young bicultural Hispanics using just the
Internet, as it's were they are and it's cheaper. Moreover, I like a lot the idea that the advertising
agency has developed, seizing on the less-appetizing aspects of the leftovers. But I think they didn't
took its most with the first campaign. Personally, I don't like it. If they decide to show a commercial
just on Youtube and other websites where the audience has to press “play”, it has to be a very good
commercial, and I think that one wasn't. However, the second commercial, using the same idea,
looks a lot more interesting.
In conclusion, the company has been targeting the immigrant unacculturated Hispanic audience for
some years, developing a good market among them. But it has just started to target more
acculturated Latinos very recently, so it's very soon to evaluate the efforts of the company. We will
have to wait to see what other innovative ways apart from videos on the Internet the company will
use to reach this relatively new market.
References
- Butcher, Dan “Nestlé targets Hispanics with Carnation Evaporated Milk mobile site, app”, Mobile
Marketer, April 14, 2010. <http://www.mobilemarketer.com/cms/news/advertising/5970.html>
- Jordan, Miriam “Nestlé markets baby formula”, The Wall Street Journal, March 4, 2004.
<http://buiznt.cob.calpoly.edu/cob/MGT/Pendergast/sp04/Nestle%20Markets%20Baby%20Formula
%20To%20Hispanic%20Mothers%20in%20U_S.htm>
- Arredondo, Cesar “Latino market is a sweet deal for Nestle”, BNET, July 2008.
<http://findarticles.com/p/articles/mi_m0PCH/is_5_9/ai_n27953111/?tag=content;col1>
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2010. <http://www.latinumnetwork.com/coverage1.php>
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1994.
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2010.
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<http://juantornoe.blogs.com/hispanictrending/2008/08/nestle-pitches.html>
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<http://www.adlatina.com/notas/noticia.php?id_noticia=40501>
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<http://www.thefreelibrary.com/Denny%27s+names+Siboney+USA+as+Hispanic+Advertising+Ag
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matutino Despierta América de Univision”, Hispanic PR Wire, March 26, 2010.
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<http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9412221698&site=bsilive&scope=site >