CASE STUDY ON NESTLE

INTRODUCTION
Founded in 1866, Nestle is the largest food and beverage company in the world. Initially, the
company sold only infant’s cereal but quickly diversified to include a variety of products
including chocolate, coffee, soup, yogurt, water and frozen foods in their portfolio.
The organization employs nearly a quarter of a million people from 70 different countries around
the world. Nestlé operates in almost every part of the world. They have reached an impressive
global audience both through their own efforts and through joint ventures with companies like
Coca-Cola. Nestlé‘s success has been driven by a combination of product innovation and
business acquisition. It is their motivation for growth and diversity that has allowed Nestlé to
become the key player in nutrition that it is today.

HISTORY
In 1866, the first condensed milk factory in Europe opened in Cham, Switzerland. The company
was called the Anglo-Swiss Condensed Milk Company. The factory was owned by two
American men, brothers Charles and George Page. They had seen the growth of condensed milk
in the United States and wanted to manufacture milk near to a large, quality source. Switzerland
produced a large amount of high-quality fresh milk and had been the center of production for
many milk based products since the early 19th century. The business owners created their milk
products in Switzerland, but it was always intended for the English market. They opened a
British factory in England in 1873.

Henri Nestlé, the company’s founder, worked as an assistant to a local

pharmacist early in his career. He was trained in science and chemistry. Henri was an innovator
by nature, and he experimented with everything from food to cement. In 1867, Henri Nestlé
produced a nutritious combination of milk, wheat, and sugar. This cereal was so nutritious that it
saved the life of a child. He called it Farine lactee. The product took off, and he began producing
his baby food on a large scale. He started out buying the milk he needed to make the Farine
lactee fresh each morning. By 1869, this method was no longer practical, and he began to
purchase his milk supply from a collection center to have it delivered to his factory.

TIMELINE
1866 - Foundation of Anglo-Swiss Condensed Milk Co.
1867- Henri Nestlé's Infant cereal developed

1905- Nestlé and Anglo Swiss Condensed Milk Co. (new name after merger)

1929- Merger with Peter, Cailler, Kohler Chocolates Suisse’s S.A.

1934- Launch of Milo

1938- Launch of Nescafe

1947- Nestlé Alimentana S.A. (new name after merger with Maggi)

1948- Launch of Nestea and Nesquik

1969- Vittel (initially equity interest only)

1971- Merger with Ursina-Franck

1973- Stouffer's (with Lean Cuisine)

1974- L’Oreal (associate)

1977- Nestlé S.A. (new company name)

Alcon (disposed in August 2010)

1981-Galderma (joint venture with L’Oreal - full acquisition announced for 2014)

1985- Carnation (with Coffee-mate and Friskies)

1986- Creation of Nestlé Nespresso S.A. and Herta

1988- Buitoni-Perugina, Rowntree (with KitKat)

1990- Cereal Partners Worldwide (joint venture with General Mills)

1991- Beverage Partners Worldwide (joint venture with Coca-Cola)

1992- Perrier (with Poland Spring)

1993- Creation of Nestlé Sources Internationals (2002: Nestlé Waters)

1997- Creation of Nutrition Strategic Business Division (2006: Nestlé Nutrition)

1998- San Pellegrino and Spillers Pet foods

Launch of Nestlé Pure Life

2000- PowerBar (disposal announced for 2014)

2001- Ralston Purina

2002- Schöller, Chef America

Dairy Partners Americas (joint venture with Fonterra)
Laboratories innéov (joint venture with L’Oreal)

2003- Mövenpick and Dreyer's

2005- Wagner

2006- Creation of Foodservices Strategic Business Division (2009: Nestlé Professional)

Lactalis Nestlé Products Frais (associate)
Jenny Craig (disposed in 2013)
Uncle Tobys
Delta Ice Cream

2007- Novartis Medical Nutrition, Gerber, Henniez

2008- Ruzanna

2010- Kraft Food's frozen pizza

Waggin'Train
Malher
Technocom
Vitaflo

2011- Creation of Nestlé Health Science and Nestlé Institute of Health Sciences
Yinlu, Hsu Fu Chi (partnerships) in China

2012-Wyeth Nutrition

2013- Pamlab
2014- Creation of Nestlé Skin Health

2015- Global launch of Cailler as first super-premium chocolate brand

2016- Nestlé celebrates its 150 years, Froneri (joint venture with R&R)

2017- Chameleon Cold-Brew coffee, Blue Bottle Coffee

2018- Atrium Innovations

Terrafertil
Nestlé and Starbucks close deal for perpetual global license of Starbucks Consumer Packaged
Goods & Foodservice products
Nestlé & The Coca-Cola Company end BPW joint venture

COMPETITORS
 Mondelez - A top Nestle competitor, Mondelezis headquartered in Illinois and formed
during the year 2012. It is a foremost snack company of Illinois. The company produces
various products like chocolate, beverages, cookies, and confectionary.
 MARS - Also regarded as a top Nestle competitor, Mars is a famous food industry and is
the topmost producer of confectionary products. The company was formed during the
year 1911 and is located in the United States. The various confectionary products that this
company produces are Twix, Mars bars, M&M’s, Snickers, Skittles and Milky Way bars.
 Kraft Foods- Kraft Foods is a popular food processing company that was formed during
the year 2012. It is an American company into manufacturing and processing
conglomerate. It is headquartered in Chicago and is a part of Kraft Heinz Company.
 DANONE- DANONE is a French food processing company that is established in the
year 1919 and headquartered in Barcelona, Spain. The company produces various
categories of products that cater to baby food, coffee, dairy products, breakfast cereals,
confectionery, bottled water, pet foods, ice cream, and dietary supplements.
 Hershey’s- A common food processing American company and also a top Nestle
competitor, Hershey is headquartered in Pennsylvania. This brand is quite popular and is
liked by many. The company is in the chocolate manufacturing industry ever since 1894.
 Heinz- Heinz is a popular food processing company that was established in the year 1869
and formed by Henry J Heinz. The company is located in Pittsburgh, Pennsylvania. The
company produces many food products across six continents and markets in about 200
countries.
 Unilever- Unilever is a British-Dutch company that is formed during the year 1930 and
headquartered in the United Kingdom and Netherland. It is a consumer goods producer
company and their products include food and beverage. It is also into the production of
cleaning and personal care products. It is the world’s largest consumer foods company.
  General Mills- A top Nestle competitor, General Mills is a popular food processing
company that was established in the year 1856 and headquartered in Minnesota, United
States. It is an American company into the production of branded and unbranded
consumer foods.
 Kellogg- Kellogg is a global food processing company that was formed during the year
1906 and is located in Michigan, US. Their main food productions are convenience and
cereal foods like crackers, toaster pastries, and cookies.
 PepsiCo- Also a top Nestle competitor, PepsiCo is a popular beverage and food
processing company that was formed during the year 1898. The company is
headquartered in New York, United States. The company has been in business operations
of manufacturing and selling of beverages, snacks based on grains, and many other
products.
 Amul- A famous Dairy industry of India, Amul is based out in Anand, Gujarat. The
company was formed during the year 1948. Amul is maintained by the Gujarat Co-
operative Milk Marketing Federation (GCMMF). GCMMF is a famous cooperative body
of Gujarat. This federation possesses approximately 3.6 million producers of milk in
Gujarat.
 Ferrero Rocher - Ferrero Rocher, a popular chocolate and hazel confectionary company.
The company was formed during the year 1982, is a popular Italian chocolate company.
Their key elements used in the chocolate production are sugar, milk chocolate, palm oil,
wheat flour, and hazelnut.
 Starbucks - A famous American company, Starbucks is a company that was formed
during the year 1971. The company is headquartered in Washington, United States. It
represents the biggest coffee business in the world. This brand is measured as the main
representative of “Second Wave Coffee” that is distinctive from other coffee-serving
locations in the United States by quality, taste, and customer experience.
 Maxwell House- A famous brand of coffee, Maxwell House is a beverage industry that
was established during the year 1892 and headquartered in Tarrytown, New York. The
company has revenue of about $5.5 million and has about 191 employees.

SWOT ANALYSIS
 Strengths – Diversified global food company, scale and market reach, knowledge of
global markets, greatly improve operating efficiency, R&D and innovation
 Weakness – In the past the firm’s revenue was 70% in the markets with limited potential
for growth, weak profitability due to some of the acquisitions, some low-margin products
 Opportunities – Goal of 4% new organic internal growth, improved efficiency, health
food industry, maintain momentum
 Threats- Fierce competition, food-producing rivals had improved operating efficiency,
possible brand overextension
CONCLUSION
 Through smart strategic management decisions Nestle succeeded and became
multinational
 Today, Nestle is still the largest food and nutrition company in the world in terms of
sales

Diksha
IT Telecomm (1st Year)