Agro Perspectiva

Sweet success for Nestlé Venezuela case study

08.07.2010 09:03 "Agro Perspectiva" (Kyiv) — A case study highlighting how Nestlé Venezuela boosts female entrepreneurs while expanding its Dairy Culinary business won the first prize in the NextBillion 2010 Case Writing Competition. Twenty-five year old Deborah Mendez, an MBA student at the Bauer College of Business at the University of Houston in the United States, penned the winning case study ‘The Sweetest Business of Nestlé Venezuela: El Dulce Negocio’. In June, judges of the international contest — sponsored by the William Davidson Institute (WDI) at the University of Michigan, World Resources Institute and the Acumen Fund — awarded the top five case submissions based on the connections between economic development and enterprise. The judging panel included Bob Kennedy, Executive Director of the WDI and Brian Trelstad, Chief Investment Officer of the Acumen Fund. Ms Mendez explained how Nestlé expanded its market for its sweetened condensed milk and shelf stable cream in Venezuela by teaching low-income women how to create their own business start ups selling baked goods, under the El Dulce Negocio Nestlé programme launched in 2007. She said: «Nestlé goes to low income neighbourhoods and teaches them how to make cakes and pastries, track their costs and set prices so they can sell to their neighbours and families. By teaching them how to start their own business, Nestlé is helping the housewives increase their household income without sacrificing family duties by going to work outside the home.» In 2010, the Nestlé initiative evolved into a mass impact project which included a series of short videos broadcast on national television. In addition, in considering that around 30% of the low-income sectors in Venezuela have no direct or indirect access to television, an innovative website was launched www.eldulcenegocio.com.ve which received more than 82,000 visits within 5 months to further extend the programme. Having travelled back twice to her native Venezuela during the full-time study semester earlier this year to continue working on the paper, Ms Mendez met Nestlé Venezuela executives Philippe Mondada, Business Executive Manager of Ambient Dairy and Maria Valentina Lira, Consumer Marketing Manager of Dairy Culinary Solutions, to understand how and why the Company had created the El Dulce Negocio Nestlé initiative. Ms Mendez also extensively researched into Nestlé Venezuela — which sells products including powdered milk, sweet condensed milk and shelf stable cream — under the supervision of Professor Steven Koch, Director of the Business Consulting Lab. Professor Koch said: «I believe most that follow and/or participate in this competition approach issues with a very heavy social initiative or social organisation orientation. In contrast, Deborah’s case study is about a large multinational corporation that, through its business initiatives, is able to also improve the lives of lower socio-economic consumers. This is a big difference and one that I believe resonated with the judges.» In part one of the case study, Ms Mendez spotlights Nestlé Venezuela marketing executives and how they accomplish their objective by blending Creating Shared Value with sound business goals. In part two, the case study explores challenges the executives are faced with in scaling their initiatives in a cost efficient manner. The study significantly explored how the Company aims to strengthen its bond with Bottom of Pyramid (BoP) consumers. This was relevant to highlight as in Venezuela, lower-income earners make around USD 2.50 per person, per day — about 80% of the population. Maria-Valentina Lira, Consumer Marketing Manager of Dairy Culinary Solutions at Nestlé Venezuela, explains how Nestlé continues to address the low-income issue. She said: «Considering that in Venezuela 80% of the population belong to D-E classes, Nestlé found a way to address the low income sectors and expand the source of business while helps the social-economic development by enhancing new micro entrepreneurs. The way to build a business model while addressing the poverty issues of the country was one of the fundamental judging criteria.»