Nestlé’s wartime investment in Ukraine is a corporate lesson in ‘living up to your beliefs’

December 14, 2022, 11:15 AM UTC
Updated December 14, 2022, 7:52 PM UTC
Paul Bulcke, chairman of Nestle SA, gestures as he speaks during a panel session on the closing day of the World Economic Forum (WEF) in Davos, Switzerland, on Friday, Jan. 25, 2019.
Paul Bulcke, chairman of Nestlé, on the closing day of the World Economic Forum in Davos, Switzerland, Jan. 25, 2019.
Jason Alden—Bloomberg via Getty Images

Good morning, Peter Vanham here, filling in for Alan.

Some companies like risk. Others don’t. And then there’s Nestlé, the consumer goods company that makes things like Nespresso, KitKat, and baby formula. The Swiss giant announced this week it is investing $43 million in the construction of a new food factory in Ukraine. The plant will be located in the west of the country and produce food both for local consumption and European export.

What drove the 156-year-old company to invest in Ukraine? Bravery, or just good business sense?

“It is a proof of our commitment,” Nestlé chairman Paul Bulcke told me over the phone from Chile. “We want to show the Ukrainian people that they can count on us. We want them to know we are consistent in our beliefs and dependable in our commitment to them.”

Nestlé is not a newbie to committing to war-torn countries, or countries facing other types of instability. It stayed in Myanmar throughout the junta, in Cuba and Venezuela throughout the Communist takeovers, and in Zimbabwe throughout the sanctions era. (The fact that its headquarters are in neutral Switzerland helped in that regard.)  

But in the past year its commitment to serving consumers, regardless of the political situation, got its harshest test yet. True to its history, but unlike many of its Western competitors, Nestlé remained active in Russia, though it focused only on essential food products such as baby formula. “Luxury” items such as chocolate and coffee were discontinued.

The Russia stance wasn’t welcomed everywhere, and it particularly angered Ukrainians. It is in this context, too, that the Ukraine plant decision must be seen, Bulcke added. “By investing in Ukraine we send a signal. We won’t abandon the Ukrainian people. One day, the war will end.”  

That doesn’t mean the investment is only about the values, though, Bulcke told me: “We’re not in the business of philanthropy. But with our activities, we are a force for good in society. The agricultural inputs are there, and we count on it that the West of Ukraine is safe.”

Is there a lesson for other companies? “In an increasingly ambiguous world, you have to live up to your beliefs, and you have to stand behind them,” the Nestlé veteran said.  

“If you allow yourself to be conditioned by externalities,” Bulcke concluded, “you turn into a Ping-Pong ball.”

More news below.

Peter Vanham 


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This edition of CEO Daily was edited by David Meyer. 

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