Nestlé: The Most Evil Business in the World

So, you're nestled in the 1970s. You're the inventor of baby formula, a life-saving creation for babies who, for whatever reason, can’t breastfeed from their mothers. But just helping moms who can breastfeed isn't enough; it's such a small segment of the population, such a small customer base. How are you ever gonna make a fortune with that? Never!

So you're looking to expand your formula business even more. Instead of just selling to moms who can't breastfeed, what if you could sell to every mother? If you could do that, your customer base will instantly increase by 20 to 100 times. The problem is, you've got some steep competition—mother nature's milk—something that is vastly superior and has far more nutritional value for infants compared to the glorified powdered cow's milk mixed with sugar that you're selling.

You need a way to fool the general public, to dupe them into thinking that formula is far better than natural breast milk. Now you may be saying to yourself, "But Jake, if we did that, wouldn't we be intentionally making babies malnutritioned?" Well, yes. So anyways, you need to convince the world that formula milk is a million times better than breast milk, which means you need a little bit of propaganda—paying doctors to peddle your formula.

The Nestlé campaign that was concocted would turn into one of the greatest medical scandals of the 20th century from the biggest food company in the world.

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Ever notice when you're making up some quick? You stir until it's rich and thick. You hate to take that nice little sip because you know it'll be gone in a sip. It's so rich and thick and chocolate that you can't drink it.

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That's the saddest sound I know.

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Coffee, doctor? Oh, fine. Have a Camel with your coffee. Thanks. You know, this night work's kind of rough, isn't it? That's right, but a Camel's always a pleasure.

To understand how we're gonna run our propaganda campaign for baby formula, instead of starting from scratch, all we gotta do is take a lesson from some of history's foremost experts at molding public opinion—cigarette companies. In a cigarette, it's the tobacco that counts, and Lucky Strike means fine tobacco.

See, contrary to the symbol of death and disease it is today, once upon a time, in the early 1900s, cigarettes were a cultural icon of sophistication, glamour, and sexual allure—a highly prized commodity for one out of every two Americans.

And how did cigarette companies achieve the symbol of sophistication? With things like full-color magazine ads with respectable-looking doctors in white coats puffing away, with slogans like, "More doctors smoke Camels than any other cigarette." An early example of an influencer campaign.

Why? Because who do people look up to when it comes to what they consume? Doctors. Who do people look up to to determine what's cool? Celebrities. We know with mathematical certainty that large numbers of people will follow the advice of their doctors because we understand the psychological dependence men have on their physicians.

So if our goal is to get mothers to choose baby formula over their own breast milk, all we gotta do is to get their doctors to tell them to.

You start Nestlé's 1970s influencer campaign to basically get doctors to say formula good, breast milk bad. You pay doctors and nurses to suggest your formula as an alternative to breast milk. In places like Asia and Africa, you even hire saleswomen, dress them up like nurses, and get them to hand out free samples and medical advice.

You make sure that these free samples are just big enough that by the time they run out, these mothers would have stopped making breast milk naturally, cementing a profitable, loyal customer. Who cares if Africa, one of your biggest markets, has polluted water? Who cares if most of the moms using your formula don't know that they need to boil the water first to prevent the bacteria in the water from making their babies sick?

Who cares if it's estimated that babies who are fed formula in unhygienic conditions are between six to 25 times more likely to die of diarrhea and four times more likely to die from pneumonia compared to breastfed babies?

But that's not your fault, obviously. You print the instructions on the package and they're responsible for reading them, even if they're illiterate. But then you run into a problem. Powdered cow's milk, sugar, and vegetable oil aren't even close to real breast milk.

It contains none of the stuff that can help babies fight off diseases or build natural immunity. It doesn't even contain enough nutrients to keep a baby healthy. In 1978, Nestlé executives were even brought before the U.S. Senate to explain why all these babies were dying or getting sick because of their formula milk.

"Would you agree with me that your product should not be used where there is, uh, impure water? Yes or no?"

"Uh, we give all the instructions—"

"Just answer... what would you—what is your fault?"

"But we cannot cope with that!"

"Well, as I understand what you say is where there's impure water, it should not be used?"

"Yes."

"Where the people are so poor that they're not going to realistically be able to continue to purchase that, and which is going to mean that they're going to dilute it to a point which is going to endanger their health, that it should not be used?"

"Yes."

"I think now then my final question is, what do you do or what do you feel is your corporate responsibility to find out the extent of the use of your product in those circumstances in the developing part of the world? Do you feel that you have any responsibility?"

"We can't have that responsibility, sir."

"May I make a reference to... uh, you can't have that responsibility?"

"No, no."

So by 1981, the World Health Organization set new regulations where you can no longer compare breast milk with formula alternatives. That is a problem—a problem that can be solved by moving your marketing to somewhere with fewer restrictions, like Southeast Asia and the Pacific, where formula sales are skyrocketing, while acting like you are breast milk's biggest fan in the U.S. and Europe, even creating a cringy baby band to get your point across.

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And even after millions of people start boycotting your products and stricter laws are put in place to stop you from tricking people into using your formula, there are still reports of Nestlé paying their doctors to promote their products, giving out free samples, and advertising in hospitals to this day.

I would almost argue you should never give your child any formula that you haven't run by your pediatrician. Formula milk has around a 23% profit margin, meaning companies like Nestlé make around 23 cents for every dollar in sales. By 2026, this industry is set to be worth more than $110 billion.

But if you thought Nestlé stopped there, oh, you're so sadly mistaken.

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What is the number one thing humans need to survive, aside from food? It's water. That's why the water business can be very lucrative if done right. See, tap water itself—the stuff that comes out of your sink—is pretty inexpensive, but bottle up that tap water, market it as coming from clear mountain springs or majestic fountains, and you have a ridiculous markup.

You can buy a tank of tap water for $10, use it to fill thousands of plastic bottles, and then resell that tap water for $50,000 for one tanker load. Nestlé pays $10; once bottled, the same water costs $50,000. And this is not an exaggeration, by the way. Nestlé literally sold bottled tap water, with one of their recent lawsuits dating back to as early as 2012.

But just like baby formula, you can only get away with so much in first-world countries. It's third-world countries where you can really take it to an extreme.

In Pakistan, in 2013, it was revealed that Nestlé was diverting clean drinking water away from villages and towns and then packaging it in their factories. They would then resell that water back to the same people they took it from. Honestly, it's pretty genius if you ask me. The people in these towns were forced to drink dirty, polluted water because they couldn't afford to buy the bottled water that was actually theirs to begin with.

Here is what the chairman of Nestlé had to say about whether or not everyone should have access to water.

Yeah?

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A decade later, he clarifies his position: "I have always supported the human right to water. Everyone should have enough clean, safe water to meet their fundamental daily needs."

But if you thought Nestlé stopped there, you are still sadly mistaken. Dan says he can pick his favorite chocolate blindfolded.

"Was it that one?"

"Nope."

"Try this one."

"Yes, that's it! No mistaking it. That's Nestlé's chocolate—the smoothest, creamiest chocolate of them all."

Try the blindfold test: prove Nestlé's best. Tools? Nestlé baby formula bad; Nestlé bottled water bad. But at least your candy is okay, right? I mean, what could be more innocent than a KitKat? Wrong again.

Three million tons of chocolate is eaten every year, but have you ever wondered where those cocoa crops come from? Well, a good chunk of it is grown in Africa, including the ones used by Nestlé, which can involve a lot of child slavery and forced labor. Chocolate is one of the products Nestlé is most famous for. KitKat Bar 1 and the Milky Bar are all Nestlé chocolate bars.

Let's face it, cocoa is expensive. You have to bring it all the way from Africa, which is already eating into your profits. So what do you do? You tap into the cheap labor market. More specifically, you start buying cocoa beans from farms that use forced child labor.

And it was all going according to plan until the year 2000, when a report came out that Nestlé, Cadbury, and Mars were all guilty of buying "blood cocoa" and that they knew about it all along. Nestlé promised to free its chocolate candy from slave labor by 2005 and missed that deadline and all the deadlines after that.

The excuse? "The use of child labor in our cocoa supply chain goes against everything we stand for." End quotes, says Nestlé Executive Vice President of Operations José López. "No company sourcing cocoa from the Ivory Coast can guarantee that it doesn't happen, but we can say that tackling child labor is a top priority for the company." End quotes, which obviously made people even angrier.

So to placate the masses, you collected all the cocoa you could find from France that don't use child labor and made KitKat. You slap a fair trade label on it and it becomes a symbol of a reformed, caring Nestlé, all the while you still continue using dirty cocoa for all your other candy.

And when trends change from being morally correct to being environmentally correct, you switch to a much cheaper alternative—an environmentally friendly label that takes less effort, money, and resources and diverts attention away from your shady supply chain.

But if you thought Nestlé stopped there, you are yet again sadly mistaken.

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I see automation displaces labor in your organization.

"To Dr. Sloan?"

"Ah! Captain Q! Join me in a glass of delicious chocolate quick!"

"Well, you—thank you, doctor. I could use some energy."

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Incidentally, one of those torpedoes you fired at me was circling—and you're stuck.

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Thank you. Some people will do anything to get rich quick.

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Ethiopia is one of the poorest countries in the world, and in 2002, they were in the middle of one of the worst famines in history. What does this have to do with Nestlé?

Well, in 1986, Nestlé bought a German company based in Ethiopia that had been nationalized in the '70s. The Ethiopian government owed Nestlé money and offered $1.5 million as compensation. But by 2002, due to a new exchange rate, this amount had become $6 million.

As Nestlé, you could have written that debt off pretty easily. There were millions of people starving in Ethiopia and $6 million could have gone a long way. It could provide safe drinking water for 1.5 million families or anti-diarrhea medicine for 750,000 kids.

But instead of writing this debt off, you demand your money back, even while you are making $3.9 billion in profits. If people disliked Nestlé before, they really hated Nestlé now. And by trying to get money back from Ethiopia, you commit what would be known as the greatest public relations blunder of the decade.

Nestlé eventually backed down due to mounting pressure of boycotts, but the damage to their reputation had been done. Today, Nestlé is the biggest food company in the world, even after years of controversial tactics to say the least. No one can deny that international need for water, formula milk, and yes, even chocolate.

And they've done a pretty good job of keeping their shady past under wraps, so people are still buying products from their almost 2,000 different brands. Nestlé operates in 190 countries, employs almost 300,000 people, and has 376 factories worldwide.

Nestlé is one of the best employers in Europe and a powerhouse of a food company—a food company where even Nestlé has admitted that 60% of its products aren't even healthy.

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Yes, once again, I kind of look like an SJW. It came out a little bit more purple than I anticipated, but I assure you that it should fade out to a more natural blonde.

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