By Paul Feinberg
Food and drink companies have an unusually intimate relationship with the consumer. After all, they’re asking you to put something they make into your body and trust that no harm will result.
“Ultimately, the value of Nestlé, or of other companies, is based on trust,” Nestlé Executive Vice President Chris Johnson (’88) told a UCLA Anderson audience Monday. Johnson, who heads the company’s business excellence division, joined UCLA Anderson Dean Judy Olian in a conversation that was part of the Dean’s Distinguished Speaker Series.
Johnson has spent his entire career with Nestlé, and the past 26 years overseas. During that time, he’s experienced numerous changes and roles at the world’s largest food company. He assumed his current position as head of the new business excellence arm in October 2014 and his job is to help the company better leverage its huge scale and strengths.
“We’re a global company but we act really locally. One reason for our success is we’re attuned to local taste,” Johnson said. For example, Nestlé’s KitKat chocolate bar and Nescafe coffee taste slightly different, deliberately, in countries around the world.
But the back office is a separate challenge. Traditionally, Nestlé has implemented business functions differently in each country, too, he said. Johnson and his team are now attempting to simplify and standardize back office processes, with a long-term goal of automation. “That will allow us to … compete with those companies taking market share from us. We’re losing share to small, nimble food and beverage companies, often startups, and they don’t have these huge back offices.”
Asked about his long career at Nestlé, Johnson said perhaps his biggest advantage was that he had worked in many positions at the company, gaining deep knowledge of the organization — and had developed persistence, along with a thick skin.
In addition, “I’ve surrounded myself with a strong team, and don’t use consultants,” Johnson said.
Nestlé, like other companies, is also dealing with external challenges to its traditional business.
“People are looking more and more for non-processed food, looking for more organic, more artisanal foods,” he said. “In the past, these trends have been confined to the coasts, but now you’re seeing these trends globally. It’s a challenge for us.”
Johnson, who grew up in Los Angeles, said Nestlé uses a number of strategies to evolve its offerings. The company takes existing brands like Stouffer’s and Lean Cuisine and comes out with new products that are more organic and have “clean labels” without artificial ingredients. It also acquires brands that are “born pure,” he said; such companies may still be relatively small but they can help Nestlé grow and give the global food company access to channels it is unable to achieve with its traditional brands.
Producing nutritious food with “functional benefits” — those that have a potentially positive effect beyond their nutritional value — was another area of emphasis noted by Johnson, who said that part of the market was growing.
Between 40 and 45 percent of the company’s business is in developing countries, and Nestlé is keen on the idea of providing healthier foods, especially for children. As an example, Johnson noted that Nestlé sells bouillion cubes fortified with nutritional elements that are not always available in some parts of the world.
For Johnson, whose b-school class is celebrating its 30th reunion this year, the occasion marked a return to campus and his first visit to the complex Anderson has called home since 1995.
Producing nutritious food with “functional benefits” — those that have a potentially positive effect beyond their nutritional value — was another area of emphasis noted by Johnson, who said that part of the market was growing.
Posted by: John | 04/05/2018 at 02:48 AM