Font Size

- Aa +

Tue 8 Oct 2019 10:34 AM

Font Size

- Aa +

How to get away with a bad reputation

Nestle, McDonald's and Facebook have faced continuous criticism, but consumers will forgive anything for their favourite brands, writes Lubna Hamdan

How to get away with a bad reputation
Good to be bad? Nestlé’s revenues rose despite criticism over its products

If you’re the world’s largest food company, you’re bound to face some difficult headwinds, and Swiss multinational food and drink processing conglomerate Nestlé is no stranger to controversy.

The company has had a history of negative publicity from claims and lawsuits since as early as the 1970s when the Infant Formula Action Coalition launched a boycott of its products in the US over the marketing practices of its breast milk substitute in developing countries.

Google the name Nestlé and you’ll even come across articles calling it “one of the world’s most hated companies” and “one of the world’s most boycotted companies” alongside other global household names like Nike, Coca Cola and McDonald’s.

Seven minutes into our recent conversation with a Nestlé regional executive, we could understand why the foodstuff giant is not always the people’s favourite. Despite having a prearranged 15-30 minute interview, our conversation was cut short at seven minutes. The reason? “Sorry, we are running out of time, but please, ask your last question.” That is, as long as the question didn’t fall under at least two topics we were warned to steer clear of by the company’s public relations representatives.

Don’t get me wrong, Nestlé is not the only company to get away with everything from mislabelling to attempting to censor and control an editorial piece. And it is far from being the world’s most hated company. After all, it ranks at number 42 on brand intimacy agency MBLM’s intimacy report 2019 for the US, and its instant coffee brand Nescafé ranks at number 7 in the UAE.

But its recent lawsuits, such as bakers in California suing the confectioner for mislabelling white chocolate, have got us thinking: do company reputations really matter?

Despite being forced to defend itself against a 2018 report by The Guardian, which referenced a study by the Changing Markets Foundation that cast doubts on the credibility of some of its health claims, Nestlé continues to grow.

This year, the company reported the strongest start to a year since 2016 as it raised prices and saw its US frozen-food brands Hot Pockets and Stouffer’s return to growth.

While American investor Warren Buffett believes it takes 20 years to build a reputation and just five minutes to ruin it, for corporates like Nestlé, it seems that there is indeed no such thing as bad publicity.

Not the only one

Fast food chain McDonald’s has had its fair share of controversies, too.

In 2017 when we interviewed an executive at its UAE franchise, he claimed the brand has “always [offered] healthy food,” which is “the same food you eat at home”. He went as far as to declare that he eats at McDonald’s at least three or four times a week.

It’s worth noting that a large fries and Big Tasty burger will give you more than 1,700 calories - just 300 calories short of an average woman’s recommended daily intake, and 800 shy of a man’s. The brand has continued to face cynicism from health regulators and some consumers, who claim the brand’s products are high in fat and cholesterol.

And how can we forget about Facebook? The platform is not only embattled by a series of privacy scandals, but WhatsApp co-founder Brian Acton declared in 2018 that selling his messaging app to Facebook for $22 billion in 2014 is a decision that continues to unsettle him.

“I sold my users’ privacy to a larger benefit,” he told Forbes.

“I made a choice and a compromise. And I live with that every day.”

But last week, a July survey from the Pew Research Centre found that over half of adults in the US get their news from Facebook, making is the most population social media platform for news sourcing.

Despite reports claiming consumers are becoming more ethically conscious, it seems that they can forgive anything when it comes to their favourite brands.

So does a bad reputation really destroy a corporate? Not if you can get away it, and with today’s consumers, that doesn’t seem too difficult a task.

For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.