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A Community Goes Up--And Wins a Round--Against Nestle

Posted by: Michelle Conlin on May 28, 2008

A while back, I wrote a story about how some residents in the tiny, no-stoplight town of McCloud, Ca. had gone up against the multinational Nestle.

Nestle wanted to build the biggest water bottling plant in the world in McCloud, a drop-dead paradise nestled at the base of Mt. Shasta. The spectre of 600 trucks barreling in and out of town everyday—not to mention a plant the size of five Wal-Mart supercenters strung together—deeply troubled many in the town. There were others who supported the plant who were as equally troubled by the lack of good jobs in McCloud. (Nestle promised to brings jobs into the community in exchange for access to McCloud’s pristine, glacial-fed spring water).

Now comes word that Nestle has decided to radically scale back the scope of the project by 60 percent.

The company says that it is doing so for business reasons. Since Nestle began to explore the project in McCloud five years ago, a company spokesperson says, our “business needs have changed. Over that time, the company has built another plant in Denver and expanded supplies and capacity at other western sites. In addition, the cost of transportation and fuel has risen over the same period of time. These factors combined mean it no longer makes economic sense for the company to built a facility the size they originally proposed in McCloud.”

But viewed another way, this is also cautionary tale for any company. Time was when multinationals could arrive in economically depressed communities and pretty much have their way. But in the age of hyper connectedness, residents in McClould were able to turn their issue into an international sensation. Now Nestle has capitulated. The managmenet lesson: no company can afford to go forward with projects like these without engaging ALL stakeholders, not just supporters. Yes, this is David versus Goliath. But the Davids now have megaphones.

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Reader Comments

The Trout Underground

May 28, 2008 05:15 PM

As one of the bloggers leading the fight against Nestle's foray into McCloud, I'll say this: A lot of this mess could have been avoided had Nestle not tried to bulldoze this project through and attempted to intimidate project opponents.

Local opposition to the plant hardened dramatically after Nestle's legal department tried to subpoena the private financial records of project opponents.

In what was clearly a heavy-handed attempt to intimidate opponents, Nestle managed to fire up a lot of locals.

After my blog began covering the fight, I was contacted by residents of several other small towns dealing with Nestle -- especially in Maine and Michigan.

Prior to the growth of interactive "Web 2.0" media, connections between rural residents from opposite ends of the country would be impossible. Today, it's not only possible, it's likely.

Here's a test of the power of the Internet: Google "nestle waters," and what comes up is a long list of Nestle web sites -- all unwaveringly positive about the company.

Google "Nestle McCloud" and the first entry is the citizen's group opposing the plant. My own blog comes up one place above Nestle's own site (#7).

It's as good an example of any of the power of the Internet to connect advocacy groups facing the overwhelming power of a corporate legal and PR departments.


May 28, 2008 09:51 PM

I have followed the Nestle water project since it was first proposed. In my opinion, a plant that is 40% of the original size is still too much for a community of this size. I hope it's not too late for the citizens of McCloud to knock Nestle completely out of the picture and to take control of their own water resources. They could build a municipal plant 1/10th the size of Nestle's proposal and keep all the profits local.

nancy ostrander

May 29, 2008 02:18 AM

A medium hurrah for McCloud. Why is there going to be ANY Nestle plant?
Transporting bottled water long distances?! We know all the reasons against doing such a project is and the only good reason for doing it is that nestle would provide jobs. Maybe what the community needs to find for its citizens is another source of jobs that will keep the beauty of this town and the surrounding area protected.

Betsy Phair

May 29, 2008 10:24 AM

I am sorry, but I don't agree with many people who think that Nestle means what they say.

I was one of the people who sued Nestle in 2003 to stop them from exploiting the town of McCloud, and I spend many hours a pay, working at educating myself and others about Nestle and their dealings.

There is no way they would "back down", at this point. They probably have other ideas in mind, such as buying Crystal Geyser in the neighboring town. Why would they give up the hold on McCloud's water?

Until the contract is amended, I do not believe a word they say. Earlier they repeatedly told citizens that they were not going to drill wells or bore holes on the site. Yet, when asked,they consistently stated that they were not going to amend the contract. Until they do, it is just the same dance, in the same circle. They are not credible. From my point of view, nothing has changed.....again!

Betsy Phair

May 30, 2008 10:40 AM

If Nestle were to amend the contract that they have with the McCloud water board,it certainly would have more meat than "idle" words thrown out into the air, crafted by Nestle's PR machine.

The bottom line is, once they establlish a footprint in a community, (as they have done on many occassions throughout the U.S.), they do whatever they please, perhaps throwing a few tidbits out to the "natives" to "demonstrate that Nestle really cares about the local community. Hogwash! They care about the bottom line and greed! They need to leave McCloud and Siskiyou County!

It's very possible that they never intended to build the bottling plant with all the associated jobs. Once the economically depressed county signs off and endorses Nestle because of the jobs, Nestle could just pipe the water out without any jobs. Do you think that's possible? Crystal Geyser might be a real possibility. Nestle would just pipe the water to the already existing Crystal Geyser bottling plant.
The county and the local water board have no idea how Nestle is "playing" them!

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How can you manage smarter? BusinessWeek writers Nanette Byrnes, Patricia O’Connell, Emily Thornton, Matthew Boyle, Michelle Conlin and Diane Brady synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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