From Nigeria to New Jersey, Companies Have the Same Enemy

Question: What do Lagos, Nigeria, and the Jersey Shore have in common?

  • (a) Their rulers both have Facebook pages with well over 100,000 “likes."
  • (b) Their rulers have both launched anti-corruption crusades.
  • (c) Their rulers are comfortable with the phrase “I don’t give a damn.”
  • (d) Their rulers have both declared a state of emergency in the past 12 months.

If you guessed that all of those answers are correct, you’re right! Though, really, New Jersey Governor Chris Christie’s 111,293 "likes" can't compete with Nigerian President Goodluck Jonathan’s 957,849.

What’s most instructive is an item not included in this quiz at all. Companies in Nigeria and on the Jersey Shore are both struggling with a common strategic question: What can you do to guard your brand from large-scale volatility that you can't really do anything about?

Two Bloomberg News stories today present very different brands, in far flung places, dealing with very different issues, that are both nonetheless emblematic of the entire sustainability enterprise.

Sustainable Nigeria

An Islamic insurgency in northern Nigeria is posing challenges for Nestle Nigeria Plc . The food company, which is Nigeria's largest, recently pulled 10 sales employees from three embattled states for a week, the second time it's had to evacuate employees in four years. "We can't get teams up there," outgoing Managing Director Martin Woolnough told Chris Kay of Bloomberg News. "That's likely to impact the middle to long term brand equity in the future."

Parent company Nestle SA reported in April that a "softening" in some emerging markets, including Africa, led to first-quarter revenue growth of 4.4 percent, below analysts' expectations and less than half the 11 percent in the same quarter last year.

Though it's not typically mentioned on earnings calls, big companies are trying to do what they can, generally under the banner of sustainability, to demonstrate that they are productive forces in disturbed regions. Nestle sells its Maggi-brand cubes, which are seasoning packets that help deliver nutrition and encourage home cooking in places like Nigeria, where less healthful processed foods are on the rise. The product is a "very strong brand" for the company, Woodnough said.

Maggi and Golden Morn cereal, which was designed to deliver iron and vitamin A to children, are efforts by Nestle SA, based in Vevey, Switzerland, to "create shared value " -- the company's sustainability slogan -- in new markets by being attentive to consumers' needs.

Sustainable Jersey Shore

Businesses along the Jersey Shore , famous for its summer tourism, are recovering from battle with an enemy who attacks not with machine guns and rocket-propelled grenades but wind, water and sand.

Superstorm Sandy destroyed or damaged 365,000 homes in New Jersey when it came ashore on Oct. 29. Every town on the state's 20-mile-long Barnegat Peninsula has work teams operating heavy machinery to demolish homes ripped from their foundations and to fix uprooted sewer systems, Elise Young of Bloomberg News reported today. As summer approaches and tourists begin their annual pilgrimage to the area -- or don't -- officials and business owners are struggling with the continued economic pain and how to keep the region's brand alive.

"Safety, peace of mind are issues that people are concerned with this year," Tim O'Shea, manager of Birchler Real Estate's Ortley Beach office said. Business in Ortley Beach is "almost completely off." The town, which lost 2,000 homes in the storm, hasn't bounced back enough to enjoy the fruit of Governor Chris Christie's come-back-to-the-shore $25 million advertising campaign.

Doing Whatever They Can

What links Nestle Nigeria and the Jersey Shore's battered businesses is that they are all struggling to do whatever they can about problems that they can't really do anything about.

Nestle Nigeria isn't in a position to take up arms against belligerents. It's trying to sell food products that it says improve nutrition and healthy living.

The Jersey Shore's tourism and real estate industries can't do anything about meteorology, the climate they live in, or how it's changing. Best they can do is make sure the $36.9 billion the state is spending on repairs and restoration leaves them better prepared for future rounds of devastation.

The global scale of businesses and brands leaves them open to ever more risk of things going haywire in the environment and in society. Anticipating them and correcting for them ahead of time, wherever possible, is like a multiple-choice quiz -- only it's one that nobody yet has the answer key to.

Analysis and commentary on The Grid are the views of the author and don't necessarily reflect the views of Bloomberg News.

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