The Business Year

Reinhold Jakobi

TURKEY - Agriculture

A Nutritious Approach

Chairman & Managing Director, Nestlé Turkey


Reinhold Jakobi was born in 1966 and completed his studies in Switzerland before becoming a butcher. He later entered the family business, focusing on meat and retail charcuterie products. He has a Master’s in Butchery, as well as a Diploma in Food and Nutrution. In 2008 he completed an MBA at IMD in Lausanne. He then entered the airline catering industry, and held positions of increasing seniority throughout Europe, the Middle East, Africa, and East Asia. He joined Nestlé in 2001 to cover the Greater China region, and became Chairman and Managing Director of Nestlé Turkey in 2012.

"There are more and more people benefiting from the progress Turkey as a country is continuing to achieve."

How would you characterize Nestlé’s role in Turkey’s consumer goods market over the past century?

With our products having had a presence in Turkey since the 19th century and Nestlé opening its operations here in Istanbul officially in 1909, I think we can safely say that we are an integral part of the progression and development of the Turkish consumer goods market. In fact, the very first chocolate factory in Turkey was a Nestlé factory, built in 1927. Furthermore, we have had many firsts in Turkey: the first infant formula, the first chocolate factory, several other firsts in chocolate products, the first soluble coffee, and many others. For more than one century we have been accompanying Turkish society in its development with our products and services. This, by the way, is not unusual for Nestlé but rather the rule, given our long-standing presence in many parts of the world. Nestlé’s traditions have not changed much. We are still an innovator looking for the next stage of development. Originally, that was simply providing safe and nutritious year-round packaged food products. Today, Nestlé is the world’s leading nutrition, health, and wellness company, with our product portfolio continuously evolving to provide the best nutrition solutions for each consumer’s needs. These products include breakfast cereals with a vitamin mix conducive to the growth requirements of children, special nutrition tailored for elderly people, special nutrition for athletes, and also some wonderful indulgent chocolate or a cup of stimulating coffee for the right moment. Our focus is on individualized nutrition, providing the opportunity for everyone at every level of society to access nutrition, health, and wellness. Our role as an innovator is the same, but now the tools are different.

Have the demands of Turkish consumers changed over the past 10 years?

Turkey now has an annual per capita income above $10,000, which represents a three fold increase over the past decade. Generally, once a country breaks the $3,000 barrier, a different type of market starts to build up—lifestyles and habits change. For example, 50% of the people on our board of directors are women. Nearly all of them have children, but they have little time for cooking. This means that the market experiences changing demands, and we have to cater to the needs of society. With the income rise, there is also a rise in out-of-home consumption for which the consumer has more choices than ever before. To be fully involved in a working life today, many people consume their meals out of the house, and if not they require convenient solutions to delight the family at home. That influences the way we are able to serve our consumers.

“There are more and more people benefiting from the progress Turkey as a country is continuing to achieve.”

What is the significance of Turkey to Nestlé as an international brand?

Turkey is part of a development market cluster, where we represent a key focus area. Historically and geographically at the crossroads of continents and cultures, Turkey in Nestlé represents both a bridge and a learning ground for other markets. Of course, we also fully apply our global knowledge and learning in Turkey. Today, with rising income levels and a stable environment, Turkey is very conducive to our business development and our industry. It is also a very competitive market. From a revenue perspective, Turkey is already a mid-level market.

The idea of creating shared value is an important part of Nestlé’s business model globally. How does Nestlé work to create shared value in Turkey?

We play an important role in contributing to society by creating shared value, which means that our business activities need to create value for society at large in order to be sustainable in the long term. And where better to do this than in the food segment? Our raw materials are sourced from rural society, and our DAMAK pistachio chocolate is a good example. The pistachio is grown in Gaziantep, widely regarded as the global gene center for pistachios. Over the past few years, pistachio yields have been falling rapidly. As a result, we are in a situation where a pistachio tree in Gaziantep may be yielding only 2-3 kilograms versus the 20 kilograms from trees in places like Iran and the US. We use pistachios from Gaziantep for DAMAK chocolate, and we want to continue to do so. Therefore, we invested $1.5 million in an NGO in Gaziantep to increase pistachio yields, and by 2014 we expect yields to be around eight kilograms. As a result, we support a rural society that can live off its own produce and use a sustainable source for the crucial raw materials for our production. What is good for our shareholders is also good for society at large, not to forget the consumer who is in the center of our efforts. We have three focus areas in terms of creating shared value. The first is water sustainability because water is obviously an important raw material in creating all of our products. The second is rural development, once again because we source our raw materials from rural environments. Having sustainable sources and a healthy rural environment helps us also to sell our products by creating strong economies. There are about 1 billion people in the world progressing in the next few years from the bottom to the middle of the global wealth pyramid. The third element in creating shared value is nutrition, which is the business we are in as the global leading nutrition, health, and wellness company, which is basically about offering the right food at the right time in the right amount, following our global slogan, “Good Food Good Life.” This is what we focus on and where we spend our resources. We are working in partnership with the Ministry of Education on a project to teach primary school kids about good nutrition. The project is not branded—we are simply aiming to promote education about good nutrition, which we believe will help prevent diseases related to the wrong diet.

What trends do you foresee in nutritional consumer goods in Turkey?

We are not living in a homogeneous environment. Turkey is more than Istanbul, and we have to employ a regional approach. There are more and more people benefiting from the progress Turkey as a country is continuing to achieve. We are impressed by the government’s vision and the direction given, with the goal of Turkey to become a top-10 global economy by 2023. As we are basically everywhere in the world, and our business is closely related to the GDP and population of a country, with Turkey aspiring to be a top-10 economy globally then this vision and aspiration is equally energizing for us at Nestlé Turkey. The way to achieve that is to support consumers in more rural and less affluent areas to develop their nutritional needs while also catering to the wealthier people in Turkey’s main cities. This could mean marketing a super premium Nespresso to the Istanbul elite and a special single-serve Nescafé in a less affluent area. We want to capture new consumers who are moving up in the FMCG segment and nutritional consumer goods. For us, this two-pronged approach will remain relevant for quite some time to come and we predict that both segments will see substantial growth opportunities for many. It’s not going to be easy, but it’s an opportunity for sustainable growth.

© The Business Year – January 2013



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