Nestle moves to congee for a taste of China

In 1874, just eight years after its founding, Nestle started selling condensed milk in China. It has since introduced Western products such as Nescafe, ice cream and KitKat bars. While those haven’t sold badly, the Swiss company is now asking the Chinese what they really want.

Nestle has formed alliances with three Chinese food and beverage producers in the past three years and has set up research centers to improve local comestibles such as peanut milk, spicy Sichuan sauces, and congee, a rice porridge typically eaten for breakfast.

Rivals often modify existing products for China, such as PepsiCo Inc. (PEP)’s potato chips with Asian flavorings and Kraft Foods Inc.’s green tea Oreos. Nestle goes further by creating new offerings to win over consumers deep into the hinterland.

Nestle takes the view that all food tastes are local,” said Jon Cox, head of Swiss research at Kepler Capital Markets. “You can’t necessarily tweak a product and assume it’ll have the same success in other countries.”

With plans to double its research capacity in China, Nestle will soon have the biggest R&D infrastructure of any food company in the country, according to Cox. China is poised to become the Swiss company’s No. 2 market, after the U.S. Nestle expects revenue from China to exceed $5.3 billion this year as rising living standards boost consumption…

Nestle realized several years ago there was untapped potential in China’s coffee market because most Chinese find Western coffee too bitter. The company spent more than a year working with consumer panels in Beijing to find an appealing brew. Panels of retirees and housewives met up to three times a day in a testing room. Food scientists across the corridor used their input to develop Smoovlatte, a cold milk-based coffee that’s less bitter.

“Nobody in Switzerland, and probably not even a foreigner based in China, will understand that,” said Nestle China head Roland Decorvet. “In China, you need Chinese people to develop products for the local market.”

Which all makes the greatest sense in the world to me. Bravo!

China in transition – 5 Easy Pieces from Project Syndicate

There are dozens of pieces in this collection linking the latest with the recent, butting the detailed up against broad data sources, contrasting old hands with new analysis from within and outside China. Some of my favorite writers from Project Syndicate. Some I haven’t read before. I’ve picked out five – to start.


Xi Jinping talks with local people in the home of Roger and Sarah Lande in Muscatine, Iowa

President Xi’s Singapore Lessons

China is at a crucial point today, as it was in 1978, when the market reforms launched by Deng Xiaoping opened its economy to the world – and as it was again in the early 1990’s, when Deng’s famous “southern tour” reaffirmed the country’s development path.

Throughout this time, examples and lessons from other countries have been important. Deng was reportedly substantially influenced by an early visit to Singapore, where accelerated growth and prosperity had come decades earlier. Understanding other developing countries’ successes and shortcomings has been – and remains – an important part of China’s approach to formulating its growth strategy…

China’s House Divided

There has been much talk about America’s decline in recent years, with the corollary that China will take its place. But, while the United States does indeed face problems that urgently need to be addressed, if China is to rise further, to say nothing of supplanting the US internationally, it must first put its own house in order.

Those who argue that America is in decline have a difficult case to make in economic terms. For all its recent woes (which many countries would gladly exchange for their own), the US remains a dynamo of industry and innovation, and may be emerging as an energy powerhouse as well.

What threatens America’s global leadership is, rather, some of the most divided and disruptive domestic politics in its history. A country whose people have traditionally prided themselves on practicality is experiencing a debilitating bout of excessive theorizing, ideology, and so-called “new ideas,” thereby forestalling the practical ideas that come from constructive interaction with one’s political opponents…

A New Agenda for China’s New Leaders?

Political leadership transitions typically signal either a change in direction or continuity. But the mere prospect of such a transition usually postpones some important political decisions and freezes some economic activity, pending the resolution of the accompanying uncertainty.

China’s decennial leadership transition, culminating at the Chinese Communist Party’s 18th Congress, is a case in point. And, while many will remember when a Chinese leadership transition was a political and cultural curiosity that had few direct economic implications for the world’s major powers, those days are long gone.

The Renminbi Challenge

Last month, China unveiled its first aircraft carrier, and is gearing up to challenge the United States in the South China Sea. By initiating a plan to internationalize its currency, China is similarly seeking to challenge the dollar on the international stage.

In carving out a global role for the renminbi, Chinese policymakers are proceeding deliberately. In the words of the venerable Chinese proverb, they are “feeling for the stones while crossing the river…”

China is Okay

Concern is growing that China’s economy could be headed for a hard landing. The Chinese stock market has fallen 20% over the past year, to levels last seen in 2009. Continued softness in recent data – from purchasing managers’ sentiment and industrial output to retail sales and exports – has heightened the anxiety. Long the global economy’s most powerful engine, China, many now fear, is running out of fuel.

These worries are overblown. Yes, China’s economy has slowed. But the slowdown has been contained, and will likely remain so for the foreseeable future. The case for a soft landing remains solid…

The voices in our press that speak for official wings of American politics are still locked into Cold War ideology. I doubt the difference is more than one of degree between the NY TIMES and FOX NEWS. Without this commitment, the single largest wasteheap of taxpayer dollars – the Pentagon Budget, public and hidden – cannot be justified. The built-in subsidy to America’s war machine is impossible to pass in a nation at peace, working for peace, a nation that considers peace a critical goal.

A sound deficit-free economy is still held hostage to the military-industrial complex Eisenhower feared – and every president since has worked to increase, fatten and fawn over.

Trickle-down economics is the longest failed experiment in modern American history


These folks ain’t waiting in line for fuel for their cars

In upper-middle-class suburbs on the East Coast, the newest must-have isn’t a $7,500 Sub-Zero refrigerator. It’s a standby generator that automatically flips on backup power to an entire house when the electrical grid goes out.

In part, that’s a legacy of Hurricane Sandy. Such a system can cost well over $10,000, but many families are fed up with losing power again and again…

More broadly, the lust for generators is a reflection of our antiquated electrical grid and failure to address climate change. The American Society of Civil Engineers gave our grid, prone to bottlenecks and blackouts, a grade of D+ in 2009…

That’s how things often work in America. Half-a-century of tax cuts focused on the wealthiest Americans leave us with third-rate public services, leading the wealthy to develop inefficient private workarounds.

It’s manifestly silly (and highly polluting) for every fine home to have a generator. It would make more sense to invest those resources in the electrical grid so that it wouldn’t fail in the first place…

The National Climatic Data Center has just reported that October was the 332nd month in a row of above-average global temperatures. As the environmental Web site Grist reported, that means that nobody younger than 27 has lived for a single month with colder-than-average global temperatures, yet climate change wasn’t even much of an issue in the 2012 campaign. Likewise, the World Economic Forum ranks American infrastructure 25th in the world, down from 8th in 2003-4, yet infrastructure is barely mentioned by politicians…

This question of public goods hovers in the backdrop as we confront the “fiscal cliff” and seek to reach a deal based on a mix of higher revenues and reduced benefits. It’s true that we have a problem with rising entitlement spending, especially in health care. But I also wonder if we’ve reached the end of a failed half-century experiment in ever-lower tax rates for the wealthy.

Since the 1950s, the top federal income tax rate has fallen from 90 percent or more to 35 percent. Capital gains tax rates have been cut by more than half since the late 1970s. Financial tycoons now often pay a lower tax rate than their secretaries.

All this has coincided with the decline of some public services and the emergence of staggering levels of inequality (granted, other factors are also at work) such that the top 1 percent of Americans now have greater collective net worth than the entire bottom 90 percent.

American building codes generally tail along a decade behind European building codes. When it comes to infrastructure, the number ranges from thirty years to fifty years. More likely the latter. You can end our progress with Eisenhower’s Interstate Highway System built officially for the Cold War – and really for the motor freight industry. Though that had improved codes that approached European standards for infrastructure, the big boys running contracting firms capable of the job were already figuring out how to cut corners – legally or otherwise.

Highway Codes have since declined. Budgets have diminished. Low-bidder rulings supersede standards. And Congress couldn’t care less.

The same is true for schools and libraries, bridges, parks, any structure designed for the common good.

An edible deodorant — WTF?

Did you ever think there would come a day when the sweets you eat actually make you smell sweet as well? Well, my friends, that day is today! Introducing Deo Perfume Candy, the edible deodorant that makes you smell like fresh roses from a stunningly beautiful valley in Bulgaria.

Actually, the concept has been around for some time, but food company Beneo is finally introducing it on the US market, in the form of Deo Perfume Candy. Humans have known about the connection between what we eat and what we smell like for a while, but it was a group of Japanese researchers who discovered that eating geraniol makes people smell sweet. There was even a chewing gum called Otoko Kaoru (“man scent”) launched years ago, but it didn’t really catch on and it was soon discontinued.

Deo Perfume Candy is currently priced at $10 per bag, considerably more expensive than traditional deodorants, but you can’t really eat Old Spice, can you?

The inevitable question comes to mind. Will this crap kill me?

I remember when the local bus company in the New England factory town where I lived “revolutionized” environmental issues by making their exhaust fumes smell like roses – without removing any harmful chemicals or particulates.

Thanks, Ursarodinia