Nestle vs. Kraft Foods (Human Rights), Essay Example

It is a very sobering experience to discover just how immense and powerful some of the world’s top food and beverage cooperations are.  The world’s top food and beverage companies rake in tens of billions in profits annually and employ a third of the global working force. (10 Companies) With this kind of power, it can be easy for these production and profit giants to exploit their employees, their consumers, and the world they use for business, all while investing a small portion of their revenue into charities and public relations to hide behind.  It begs the question: what are these companies’ policies on human rights, and how do they actually apply them in the real world?  However, it would be an unfair generalization to make the assumption that all of these companies are in the wrong in regards to human rights.  They are, in fact, different companies run by different people.  No two companies are alike, and neither are their policies and applications of them. For example, Nestle and Kraft are two completely different food and beverage companies that have very different definitions of human rights.  It is amazing to compare two companies and see how one may value human rights far more than another.  While they both have their merits and faults, it is important to know that Nestle takes human rights more seriously than Kraft does.

To truly understand and know a company, it is important to know its history.  Originating in the nineteenth century as a milk and baby food manufacturer, the Swiss company Nestle grew in the wartime economies of the first and second world wars.  In the twentieth century, Nestle acquired companies such as Maggi, Libby’s, and Stouffers.  Acquisitions like these brought brands like Smarties and Kit Kat into the company’s possession in the seventies and eighties, and also increased its world power and involvement.  In recent years, Nestle has bought and merged with companies such as Gerber and has devoted a great deal of money and resources to researching nutrition and wellness. (History)

A relatively new company, Kraft Foods Group Inc. formed in 2012 as a spinoff of Kraft Foods Inc. (now renamed to Mondel?z) in order to focus mainly on the production and distribution of grocery foods in North America.  Based in Northfield, Illinois, the company has just recently merged with Heinz and is projected to be the fifth biggest food company in the world. (H.J. Heinz)  Kraft owns major brands such as Jell-O, Capri sun, Oscar Mayer, and Kool-Aid.

Both of these companies play a major role in the world’s economy.  In order to do that, these companies must utilize a vast amount of the world’s resources and workers.  Incapable of doing everything themselves, the companies rely on suppliers throughout the world in order to obtain the goods necessary for being a top food company.  Also incapable of doing everything domestically, these companies have to find a multitude of locations around the world that suit their needs.  This is where many of the human rights violations come into play.  Although Nestle does tend have better intentions that Kraft, it is not perfect.  A few years ago in a Pakistani community called Bhati Dilwan, Nestle dug into a well that the village relied on for clean water.  One of the former village counselors said “The water is not only very dirty, but the water level sank from 100 to 300 to 400 feet,” (Poisoning) proving that Nestlé’s business in that village did much more harm than good.  Nestlé’s response to this was that clean water is not a public right and instead is something that private companies should control for the good of all people.  This means that Nestle expects (or hopes for) third world citizens to buy its bottled water instead of obtaining clean water themselves.  Despite this seeming like a selfish free-market-inspired cop out for not providing a village with clean water, Nestle does actually invest a great deal of resources in making sure developing communities get the safe drinking water that they need.  In fact, the company has built two water filtering facilities in Pakistan that supply clean water to over 10,000 people in the region.  This is important to take into account because it shows that although it is true that Nestle is not innocent in regards to human rights, it does its best to make sure that it provides for the less fortunate in the world.

In addition to providing clean water to third world regions, Nestle also takes pride in its contributions to charity and the ways it helps and sponsors the community.  One program the company started is called Girl Sports.  This program’s goal is to encourage girls to live healthy, active life styles and more importantly, encourage balanced gender leadership.  Another program Nestle runs is the Nestle Very Best Volunteer Program.  This program encourages Nestle employees to get involved in charities like soup kitchens and women’s shelters.  Nestle also runs a volunteer adopt a school program, which gives its employees paid time off in order to go to schools and act as positive role models.  In addition to starting these programs, Nestle has also donated 154 million pounds of food to the Feeding America program and its employees have donated more than $1.2 million to various charities. (Community)

Policy

It is extremely important to know what Nestlé’s actual policy on human rights is. On its official website, Nestle states that its belief and goal is to educate its employees and suppliers all around the world in order to ensure that its supply chain respects human rights.  Nestle also states that it plans to monitor its foreign agricultural suppliers for child labor and build or renovate schools in areas where its suppliers use young labor.  Nestle works with the Fair labor association in order to ensure that child labor is not used and holds the view that in order to end child labor, they must collaborate with industry, government, and NGOs.  The company is also part of The United Nations Global Compact.  This UN initiative encourages worldwide businesses to practice and report on socially responsible policies.  It is clear that Nestle values fair and safe work.  The company also has a deep value on its integrity.

In contrast, Kraft is not part of The United Nations Global Compact.  This means that it does not report on its practices to the United Nations and works on human rights independently.  On its website, Kraft explains that it has a code of conduct that it expects its thousands of suppliers to follow.  It requires that its suppliers sign contracts stating that they will not use child or forced labor and will foster a safe and harassment-free environment for their workers.  However, Kraft then goes on to disclaim that it cannot “control how they run their business.”  Essentially, this is Kraft backing out from the integrity promises that they have their suppliers make, claiming that they cannot enforce what their suppliers do.  Coming from a company as large and powerful as Kraft, this statement is extremely questionable at best.  After all, all Kraft would have to do to a shady supplier would be to threaten to go somewhere else.  These however possess a risk of losing profits, which is something that cooperation like Kraft would never dream of.

Kraft Violations

One example of Kraft’s human rights violations is the way it obtains its palm oil.  This substance is something that most consumers know very little about, but it is crucial in many of Kraft’s foods and is harvested in third world countries like Indonesia and Malaysia.  Kraft is fully aware of the child labor and debt driven situations that these palm oil harvester/suppliers exploit, but instead of forcing an end to it, Kraft and the rest of the palm oil industry (including companies like IKEA and McDonald’s) launched a confidential certification system for its suppliers.  This voluntary system, known as The Roundtable on Sustainable Palm Oil (RSPO) ensures that any plantation with the RSPO’s seal of approval is free from conflict oil.  However, an investigative report from the International labor Rights Forum revealed that this seal of approval does not guarantee that a plantation will be free from human rights violations.  In fact, many of the plantations that are RSPO certified use child and forced labor and also foster hazardous and unsafe working conditions. (International)  Kraft is clearly more concerned with its public relations and the look of its official policies than its actual practices in regards to human rights.

Unlike Nestle, Kraft runs very shady and corrupt charities.  One of these charities is the National Veterans Service Fund.  This charity claims that it provides support for needy veterans.  Philip Kraft has stated that the charity purchases supplies for physically handicapped veterans and also provides grocery store gift cards.  The charity also holds the goal of raising public awareness for emotionally and physically injured veterans.  While all of this is true, this charity profits way much more than it should.  The charity uses paid solicitors, who keep over eighty percent of the profits.  This is astounding when looking at annual profits, which have gone up to $9 million.  The Tampa Bay Times has ranked the National Veterans Service Fund at number eight on its list of America’s worst charities.  Phillip Kraft’s response to this controversy is that the amount of money that the solicitors receive is out of his control, and is an expense that the company simply has to pay. He compared this to a driver having to pay for gas. (America’s) This is simply closed minded thinking and sloppy public relations work.  There are of thousands of non-profit charity solicitors in the United States that would be happy to volunteer their work for little to no pay.  Comparing the waste of profits to the driver’s unavoidable gas payments is a cop out on Kraft’s part, and should discourage anyone from donating to the National Veterans Service Fund.

Marketing

Cooperate giants like Nestle and Kraft also plays a huge part in the marketing industry, and therefore both companies have a huge responsibility when it comes to how they portray themselves in the media.  After all, these companies own brands that have become extremely iconic thanks to commercials and other advertisements.   Aware of this power and responsibility, Nestle has signed industry pledges that apply to over fifty nations, and focuses on making sure that its marketing does not manipulate children.  Nestle has also stated on its website that it wants to encourage a balanced and healthy consumption of its products, and has been editing its policies throughout the past few years in order to do this.  In the first decade of the twenty-first century, Nestle expanded its policy on advertising to children.  This included the requirements of being credible, encouraging moderation, and not undermining parental authority in its advertisements.  Nestle also pledged not to aim its advertisements to children under six years old, and to only focus on healthy, balanced products when aiming its advertisements to children between the ages of six and twelve.  In fact, Nestle states that it will not market biscuits, chocolate, or other products high in sugar to children under twelve. (Retrieved)

In contrast, Kraft is of course famous for its mac and cheese.  The company advertises its smile shaped mac and cheese to both adults and children, encouraging consumers to purchase its artificially dyed product.  The mac and cheese takes the shapes of popular characters like Spongebob Squarepants, Spiderman, and the Teenage Mutant Ninja Turtles (Wilson).  Regardless of the fact that Kraft will soon be removing its harmful artificial dyes from its character-shaped mac and cheese, it still heavily markets an unhealthy product to young children.  Kraft also uses a fun character called Cheesasaurus Rex in its commercials (Famojure).  This yellow dinosaur goes on mac and cheese related adventures in Kraft’s commercials and acts as a form of entertainment to attract young viewers.  Clearly, Kraft Food Groups is not concerned with the fact that it manipulates the youth into buying their unhealthy and possibly toxic product.

Environnent

It is also very important to know what companies like Nestle and Kraft do in regards in the environment.  After all, environment issues are human issues at the core.  Nestle states that is has many goals to improving its environmental practices.  The company has plans to improve resource efficiency, understand the impact that its products have on the environment, and provide climate change leadership. (Environmental)  With goals like these, Nestle is clearly ready to move forward in the world of responsible environmental care.

Kraft on the other hand has run into controversy because of how it grows its food.  Instead of natural methods, the company uses genetic engineering to grow its food, sparking protest from numerous organizations and activists. (Kraft)  If Kraft continues to use genetically modified organisms, than it is clear that is cares more about efficiency than quality when producing its goods.

At the end of the day, no major food production cooperation can be perfect.  Nestle is not without its human rights violations, but it is far more concerned about them then Kraft is.  If an average consumer really wanted to know which was the better company to support and purchase from, they may not like the answer. The reason for this is that the answer is not exactly convenient.  The truth is, neither company is one to support, because at the end of the day they are both cooperate giants that exploit the world and its people to some degree. Consumers may want to consider going organic, or at least local, when purchasing some of their foods and products.  Organic foods tend to be a lot healthier for consumers, especially children, and local foods are much better for the free market economy than buying from massive chains and encouraging virtual monopolies in the market.  Are these organic or local foods more expensive?  Yes they are, but the consumer can take solace in knowing that their money is going somewhere much more sincere than the pockets of a giant cooperation and its shareholders.  However, many consumers cannot afford to put organic foods in their diet, or become “locavoires”, so they will have to resort to picking a major food company that provides food to them at a cheap price.  In that case, consumers should resort to buying from Nestle brands because the company is far more conscious and passionate about human rights than Kraft is.

 References

America’s worst charities. (n.d.). Retrieved March 30, 2015. Community. (n.d.). Retrieved March 30, 2015, from http://www.nestleusa.com/creating-shared-value/community

Famojure, E. (n.d.). The 25 Coolest Snack Mascots of All Time – 22. Cheesasaurus Rex. Retrieved March 30, 2015.

(n.d.). Retrieved March 30, 2015, from http://www.nestle.com/csv/human-rights-compliance/advertising-marketing

History of Nestlé. (n.d.). Retrieved March 30, 2015, from http://www.englishteastore.com/nestle-history.html

H.J. Heinz Company And Kraft Foods Group Sign Definitive Merger Agreement To Form The Kraft Heinz Company. (n.d.). Retrieved March 30, 2015.

International Labor Rights Forum. (n.d.). Retrieved March 30, 2015. Poisoning The Well? Nestlé Accused Of Exploiting Water Supplies For Bottled Brands. (n.d.). Retrieved March 30, 2015.

Wilson, J. (n.d.). Kraft removing yellow artificial food dyes from some mac and cheese – CNN.com. Retrieved March 30, 2015, from http://www.cnn.com/2013/11/01/health/kraft-macaroni-cheese-dyes/10 companies that control the world’s food. (n.d.). Retrieved March 29, 2015.