Little hope for Gerber changes with Nestlé as owner

As anticipated and revealed last week, Nestlé is buying Gerber baby foods from Novartis. The hope that Nestlé will deliver on an undertaking from Novartis to bring Gerber marketing practices into line with World Health Assembly marketing requirments looks slim.

Novartis had agreed to change policies and practices to bring them into line with the baby food marketing criteria of the FTSE4Good ethical investment listing. It had 6 months left to make the changes, of which there are so far no sign. Nestlé is not on the FTSE4Good ethical investment listing so the threat of explusion for not delivering carries no weight. And Nestlé's existing policies and practices are so far from complying it apparently has no interest in even trying to get on the list.

There are further indications that Nestlé will continue with the type of aggressive marketing practices we exposed and targeted last year on our Campaign for Ethical Marketing action sheet. This featured general internet promotions as well as targeting of mothers in China.

According to a report in Promo magazine, Richard Laube, Chief Executive of Nestlé Nutrition briefed analysts on Nestlé admiration for Gerber's promotional techniques. It is believed to spend US$13.8 million on advertising. Promo states: "Laube also praised Gerber’s marketing expertise with mothers, via geographically targeted ads, as well as direct mail that segment babies by age."

Promo goes on: "The purchase will push Nestlé Nutrition annual sales to $8.5 billion; Gerber’s sales are $1.95 billion. In the U.S., Gerber’s 80% market share in baby food strongly complements Nestlé’s 13% market share in the infant formula segment."

In the US Nestlé has won industry prizes for its advertising of infant formula, so it is unlikely to stop the type of promotion that Novartis was commited to ending.