Swiss giant says it is 'committed to China and Chinese consumers'
China's reputation for food safety may be in tatters, with the fallout from the melamine scandal far from over, but there's no sign that food and drink businesses' appetite for trade with this emerging economic powerhouse is diminishing.
Companies are continuing to invest in China's food industry, chief among them Nestlé, the global giant, which inaugurated a new research and development centre in Beijing on October 31.
Nestlé is investing $10.2 million in the facility, dubbed R&D Beijing, bringing the company's total R&D investment in China to $16.1 million.
Nestlé, headquartered in Vevey, Switzerland, described the opening of the centre as "underlining the company's commitment to R&D in China, as well as to Chinese consumers."
Work at R&D Beijing is to be focused on nutrition and life-sciences research, food technology, processing and packaging. The life-sciences research will be based on different approaches to address three
key consumer health benefits: growth and development, healthy ageing, and weight management.The company said its work would "include research on the benefits of traditional Chinese ingredients, as well as the ways that these, and other ingredients, can be included in foods and beverages in a bio-available form."
In a statement, the company said: "R&D Beijing will engage in research collaborations with Chinese universities and research organisations. Through sharing knowledge and expertise, these research collaborations will deliver a better scientific understanding of how food and food ingredients impact on human health and well-being."
With a nod to the recent melamine contamination scandal, which left at least four babies dead and more than 50,000 small children sick, Nestlé said food safety would be a major focus of the new R&D centre.
"The safety and quality of food are addressed at every stage of product development — from the selection of ingredients to the choice of packaging material," the company said.
"Analytical science plays a vital role in safety and quality. It is used to detect absence or presence of potential contaminants in products to assure safety. It is used to quantify nutrients and to characterise ingredients to assure quality and regulatory compliance."
R&D Beijing is Nestlé's second R&D facility in China, and its 24th worldwide.
Nestlé's new R&D centre illustrates how food and drink companies still consider China to hold great potential, despite its recent, well-documented problems. But do the opportunities outweigh the risks? Don Williams, CEO of London-based brand consultancy PI Global, said the recent melamine scandal should give businesses reason to pause.
"Brands live or die on one fundamental principle: trust. A brand needs this positive and reliable relationship with consumers to thrive, without it they become just another product bereft of any emotional bond. Can you think of any brand where, if you didn't have faith in it, you would continue to purchase it? "What I believe is this: China as a manufacturing base is, not surprisingly, out of sync. It is putting modern infrastructure in place at a breathtaking speed, without (though I'm sure the will is there) having the immediate ability to fully tackle old cultural issues. And while stringent safeguards aren't in place, for the supply chain as well as manufacturing, any brand owner, particularly in categories relevant to human consumption, should be extremely wary of exposing their brand assets to this risk."