Transnational Companies as Actors in Global Health Outcomes: The Case of Maggi in Africa

The World Bank
Sonia Jawaid Shaikh



For decades, health research, policy and outcomes for development work have been the turf of international organizations, local governments and the academia. However, times are changing. Transnational corporations with consumers in many developing countries are in position to affect health outcomes.

Increasing competition in local markets, growing access of low to middle income consumers to pre-made foods, and the advantage of selling popular products by the millions puts companies like Nestlé in a unique situation where they merge brand reputation management with development goals. The are several reasons behind merging a ‘cause’ with business outcomes, including the following:

• The rise of the social media: When catering to global markets, a company like Nestlé sells of millions products every day. However, any crisis— either in terms of food quality or even an undesirable story— can set off a series of consequences via social media that may be detrimental to a product or brand’s image. This makes it difficult for companies to ignore complaints and inquiries, which could have been the case a decade ago. It also makes having a buffer of good reputation important so that when crises do hit, people give the company the benefit of the doubt.
• There are more consumers – especially women: The increasing rate of female participation in the workforce increases access of low to middle income households to a greater variety of goods at the market. Further, when women are in control of family budgets, they tend to make more pro-family, future-oriented, and healthier choices. This may ultimately reflect the buying decisions that these consumers make amongst a range of products available – with possibly increased preferences for something which appears to be healthier yet cheaper.
• Consumers have more choices. Market expansion allows local companies and international brands to make inroads toward new consumers in a single country. This means that for an average consumer, there exists more options to buy an infant formula or coffee unlike a few years ago when a major international company such as Nestlé would hold the sway. This increased competition means that brands have to differentiate themselves, and supporting a widely accepted cause is a good way to do that.
• Demanding stakeholders and the need to perform: Increasing information avenues also increase innovation potential – and stakeholders know that. Companies face pressure from stakeholders to be cleverer in their approaches to selling their wares and services. Moreover, brand reputation and CSR activities are now tied to increasing sales and financial performance.

With this in mind, Nestle used one of its most popular products, Maggi bouillon cubes, to address the issue of anemia. Anemia remains a problem in developing regions of the world, particularly Africa. Every day, an estimated 80 Maggi million bouillon cubes are sold in Africa, making it one of the most popular products of the region. Only a few years ago, Nestle fortified the cube with iron, suggesting that this would help tackle anemia in the region.

Since micronutrient deficiency remains a global health concern, Nestlé’s idea to customize products with development outcomes in regions of Central and West Africa allowed the company to effectively ward off competition, increase sales, and potentially create positive health impacts. It is very likely that in the near future, more companies with transnational presence will enter the development arena as they have access to more people directly (albeit in form of consumers) than international organizations or NGOs. In many cases, these companies also have more resources and capacities to affect outcomes when compared to local governments.

A detailed case study is presented here on how Nestlé merged Corporate Social Responsibility (CSR), brand reputation management initiatives and development goals, changing the dynamics of global development.