Reckitt Benckiser - History, Evolution, Present and the Future
Nestlé - History, Evolution, Present and the Future
-
Upload
greg-thain -
Category
Marketing
-
view
302 -
download
2
description
Transcript of Nestlé - History, Evolution, Present and the Future
History & Origin . . . . . . . . . . . . . . . . . . . 3
Modern Business . . . . . . . . . . . . . . . . . 15
Company Structure . . . . . . . . . . . . . . 21
Recent Efforts . . . . . . . . . . . . . . . . . . . 25
Company DNA . . . . . . . . . . . . . . . . . 33
Summary . . . . . . . . . . . . . . . . . . . . . . . 34
Social Media Accounts . . . . . . . . . . . 35
2
Founded in the small town of Vevey, Switzerland by Heinrich
“Henri” Nestlé
Born in 1814 in Frankfurt-am-Main
In 1857, a business was set up with other Vevey businessmen to
manufacture a liquid fuel of his own invention and an artificial
fertilizer
In 1866, Farine Lactée was made
a wholesome Swiss milk and a cereal component baked by a
special process of my invention
For a more personal branding, the company logo was based on the
meaning of his surname – little nest
During the same year, a London office was opened. Soon followed
by sales offices in France, Germany and the United States
In 1872, the company was exporting as far as South America and
Australia3
Jules Monnerat, president of the Company Simplon Railway,
became the chairman of Nestlé for the next 25 years
First task was to build upon a new product Henri had
launched in 1874: condensed milk
Patented in USA by Gail Borden in 1856
Founded the New York Condensed Milk Company
The American consul in Zurich, Charles Page, founded the Anglo-
Swiss Condensed Milk Company in 1866
Henri Nestlé moved into condensed milk, seeing clear
manufacturing synergies between this product and Farine Lactée
Became involved in another booming new category, milk
chocolate
In 1875, Daniel Peter compared notes with Henri Nestlé on how to
develop a milk chocolate
Combination of fat-rich cocoa powder with water-based milk 4
Teamed up with his father-in-law, who ran Switzerland’s first
chocolate maker, the Cailler Company
Brought in Nestlé’s condensed milk as an ingredient
Peter-Cailler-Kohler: The world’s leading manufacturer of
chocolate
In 1898, Viking Melk, a milk company in Norway was purchased
In 1900, a US factory was opened
In 1904, an agreement was reached with the Swiss General
Chocolate Company to produce Nestlé branded products
In 1905, the merging of Nestlé/Anglo-Swiss took place
Factories were operated in other areas in addition to their Swiss
base:
United States
Britain
Germany
Spain 5
In 1907, Nestlé’s first factory was built in Australia
Soon opened warehouses in:
Singapore
Hong Kong
Bombay
In 1911, the world’s largest milk condensing plant in Dennington,
Australia
Nestlé went on a factory buying spree in America
Government orders for condensed milk sky-rocketed
More international in focus
o Operated a semi-global supply chain
By 1920, there were two defining aspects of Nestlé:
Global operations
Highly decentralized decision-making
6
Demand for condensed milk plummeted
Worsened by rapidly rising prices for raw materials
Worldwide economic slowdown
Adverse exchange rates
Hyperinflation in the German economy
In 1921, the company recorded its first ever loss
Factories were closed
Debt was paid down
In 1929, acquired Peter-Cailler-Kohler company
Basic focus was on milk dried to varying levels
o Key ingredient for its main product lines of baby formula
and condensed milk
Nestlé’s core competence: the science of drying water-based
ingredients
7
In 1930, approached by the Brazilian Coffee Institute
Find a better use for Brazil’s huge coffee surpluses
Asked to come up with an improved means of creating an
instant coffee
In 1934, Thomas Mayne developed Milo
A scientist in Nestlé’s Australian business
o Labeled as Nestlé’s Fortified Tonic Food
In 1938, Nescafé was introduced in Switzerland on April 1st, 1938
Maintains as the company’s leading product
In 1939, company profits plummeted
Down to $6 million from $20 million the year before
In 1943, the production of Nescafé reached a million cases a year
By 1945, annual sales were more than double the 1938 level at
$225 million
8
9
In 1946, the company was operating 107 factories spread across
five continents
The production was concentrated in four large and growing
categories
Milk products (primarily sweetened, condensed milk)
Baby foods (where the postwar baby boom did wonders for
sales of infant formula)
Chocolate
Instant beverages
o Nestea joining the range in 1946
o Nesquik, instant hot chocolate in 1948
In 1947, Merger was agreed between Nestlé and the Swiss food
company, Alimentana
Large range of soups, bouillon cubes and spices was sold under
the Maggi name
Common links of the said companies:
o Evaporation processes
o Drying processes
Company name evolved once again to the Nestlé Alimentana
Company
In 1950, the acquisition of Britain’s Crosse & Blackwell was made
A manufacturer of soups and canned foods
In 1952, the coffee evaporation process improved
Produced 100% roast coffee beans
Sales quadrupled from 1945 to 1960 to a level of $2.5 billion
In 1963, the company invested in the US version of their British
Crosse & Blackwell subsidiary, Libby, McNeill & Libby
A canner of fruits, vegetables and meats
10
During the same year, Findus International was purchased
Frozen foods sector
Primarily operated in Britain and Scandinavia
By 1965, Swiss laboratories perfected a revolutionary freeze-
drying method for instant coffee
In 1966 came the creation and launch of a whole new premium
instant sector with Tasters Choice
In 1968, the company entered a new category, Bottled Water
Bought 30% stake in Vittel, a French mineral water company
Nestlé was already Switzerland’s largest company during that
time, operating 200 factories around the world.
Nestlé also got into the restaurant business
Founded Eurest
o A joint venture with Compagnie Internationale des Wagon
Lits et du Tourisme
11
Bought Cahills
o An Australian restaurant chain
Purchased Beringer Wines plus a host of vineyards
In 1973, the company acquired Stouffer
Consisted of three divisions:
o Frozen foods
o Restaurants
o Hotels
An ice cream business was also started in France
Partnership with France Glaces
By 1974, the German water business was acquired
Sales again quadrupled between 1960 and 1974, from $2.5 billion
to $9.9 billion
Through organic growth and acquisitions
12
Operating in 11 product areas: Canned goods, Ice cream, Frozen
foods, Chilled foods (including yoghurt), Mineral water,
Restaurants, Wineries
Merging of L’Oréal and Nestlé took place
Liliane Bettencourt (daughter of the founder of L’Oréal)
proposed swapping 30% of her L’Oréal stock for an equivalent
amount of Nestlé stock
o Feared nationalization from the incoming socialist French
government
In 1975 and 1977, the price of coffee and cocoa (two of Nestlé’s
main raw ingredients) rose fourfold and threefold and Alcon
Laboratories had been acquired (manufacturer of pharmaceutical
and ophthalmic products )
By then, the Nestlé Group Chairman was Pierre Liotard-Vogt
13
In 1984, the Infant Formula Action Coalition, a US-based protest
group, initiated a boycott of all Nestlé products
Failed to convince everyone that it satisfied the requirements
of the human body
o Infant food
In 1979, sales reached $13.2 billion
14
In 1981, Helmut Maucher became one of the three-person
Executive Committee of Nestlé
All major food companies had essentially the same technical
and managerial capabilities. Difference was clarity in direction
and speed of execution
In 1985, Carnation Company was acquired for $3.4 billion
Chose Carnation for several reasons:
o Nestlé’s US business was not huge by American standards
o Had some key product synergies with Nestlé’s core
strengths
o Had interesting products which Nestle’s marketing
department thought they could improve: Contadina tomato
products, Coffee-Mate coffee creamer & Friskies cat food
o The company was buyable, being family-controlled with
key members looking to cash in
Purchased the American coffee roasters, Hill’s Brothers15
In 1987, the company bought single market companies in
categories where the company was interested in expansion:
Canadian pet food company, Dr. Ballard and the roast coffee
company, Club Coffee
During the same year, the company took full ownership of Vittel
The chocolate business also became the sixth largest in the world
4% global share
Company’s fifth largest product category with sales of around
$2 billion
In 1986, Nespresso encapsulated espresso coffee concept
Test marketed in the office coffee sectors of Switzerland, Japan and
Italy
In 1988, two major acquisitions were made
Buitoni-Perugina Pasta Company (Italy’s third-largest food
company) for $1.3 billion 16
Bought shares from Rowntree (fourth largest in the world in
same the industry) for $4.5 billion
Nestlé was propelled to being the second largest confectioner in
the world
Around 11% share, and 18% in Europe
Products: Kit Kat, Smarties, Rolo, Lion Bar and Black Magic
Powerful vehicles for building and promoting the Nestlé name
Nespresso had been introduced into the Swiss household market in
partnership with Turmix, who manufactured the machines
Acquired Spillers
Pet food became the next product sector to increase global
scale
By 1990, three joint alliances were formed: General Mills, Coca-
Cola, Walt Disney Corporation.
17
In 1992, Nestle became the world leaders in the bottled water
category
Bottled water was organized globally under the name Nestlé
Sources International which was headquartered in Paris
San Pellegrino, a mineral water brand, had also been acquired
In 1994, Alpo, the second largest pet food company in Europe, was
acquired
By 1997, Nestlé labs created a formula to add mineral salts to
completely purified water. This was handed over to Perrier Vittel in
France.
Developed a production capable of being installed
anywhere worldwide
During the same year, Nestlé Pure Life was first launched by
Nestlé Pakistan
18
Come 1999, the same concept was launched in Europe under the
name, Nestlé Aquarel
Helmut Maucher also handed over the CEO position to his chosen
successor, Austrian and lifetime Nestlé man, Peter Brabeck
The combination of portfolio cleansing and process outsourcing
netted Nestlé $1 billion; and resulted in the sale or closure of fifty-
four factories
Greater accessibility of Nestlé products, “Whenever, Wherever,
However”
Improved consumer communication
Created a Nestlé Nutrition Division
Sales increased from the 1980 conglomerate days by over 200%.
Net profits had also increased almost three-fold, from 2.6% of
sales to 6.3%
19
Fortune magazine named Nestlé the Most Admired Global Food
Company
By 2001, pet food giant Ralston Purina was acquired for $10.3
billion
Merged with Friskies business to form another global entity,
Nestlé Purina Pet Care
Annual sales of over $6 billion
Nestlé became the world’s leading pet food company
Also acquired was Dreyer’s: the microwave snacks segment with
the purchase of Chef America Inc.
In 2002, the six global brands were: Nestlé. Nescafe, Nestes,
Maggi, Buitoni and Purina
20
Local operating autonomy was the only practical choice to manage
the company
Concentrated on its portfolio in the 1980s and ‘90s. Teams with
global category responsibilities were assembled
These five regions were the key operating units of the business:
Zone 1 – Europe
Zone 2 – Asia & Australia
Zone 3 – Latin America
Zone 4 – North America
Zone 5 – Africa & Middle East
Adopted the one board-level role: Product Direction and Marketing
Service
Looking ahead unencumbered by profit responsibility
Operate to support and advise the regions and operating units
21
By 1993, there came a major change in the acquisition of Perrier
Prompted to combine all its water interests into one globally
managed division, Nestlé Waters
In 2005, the Nestle Nutrition division was made an independent
entity within the group. It assumed global responsibility for Infant
nutrition, Healthcare nutrition, Weight management and
Performance nutrition
Around this time, the existing Strategic Business Units were:
Beverages (excluding waters), Milk, Nutrition & Ice cream,
Chocolate & Confectionery, Prepared Dishes & Cooking Aids, Pet
Care Products, Health Care Nutrition and Out-of-Home Catering
(now called Professional Food Services)
Three units directly report to the CEO: Nestlé Waters, Nestlé
Professional and Nestlé Health Care Nutrition
22
The remaining five units report to one board member, who also
has responsibility for Marketing and Sales
Tasked with forecasting how the categories will evolve and
developing global category strategies
The five regional zones were also reduced to three to cope with
increased level of complexity at the corporate level. These are
Europe, The Americas and Asia/Oceania/Africa
Around this time, the existing Strategic Business Units were:
Beverages, Milk, Nutrition & Ice cream, Chocolate & Confectionery,
Prepared Dishes & Cooking Aids, Pet Care Products, Health Care
Nutrition and Out-of-Home Catering
Three units directly report to the CEO: Nestlé Waters, Nestlé
Professional and Nestlé Health Care Nutrition
23
The remaining five units report to one board member, who also
has responsibility for Marketing and Sales
The five regional zones were also reduced to three to cope with
increased level of complexity at the corporate level. These are
Europe, The Americas and Asia/Oceania/Africa
24
2004
Performance had been muted by a relatively poor year in Europe
(declined by 1.6%)
Organic growth for Eastern Europe of nearly 8%
Organic growth in Zone Americas was nearly 8%, and 7% in Zone
Asia, Oceania and Africa.
Waters achieved volume growth but partially through dropping
prices in the key North American market
Other driver of growth (now in 34 markets)
Nestlé Pure Life
Nestlé Aquarel
Condensed milk was re-launched in Brazil, its largest market
Carnation Instant Breakfast and Clinutren helped drive Nutrition
25
Slow Churned Dreyer’s Garand Light was launched in the USA
using a patented technology to deliver a product as creamy as
normal but with half the fat
Cereal Partners Worldwide was proving to be an excellent
partnership
Nestlé’s chocolate business was lagging the company average
Pet care rolled out their new strategic tagline of ‘Your Pet, Our
Passion’ across multiple markets
Food services division launched fortifying soups for the elderly in
France and Maggi Wellness in the Netherlands
Nestlé Nutrition became a stand-alone global business organization
The Corporate Wellness Unit was formed. It was responsible for
driving the nutrition, health and wellness agenda across all the
strategic business units
26
27
2005
Drove sales to a new high of nearly $73 billion
Focused on embedding new structures and processes
Operated in more than 100 countries
10,000 employees building close relationships with medical
professionals
Acquired Protéika
French wellness firm
Weight management and metabolic disorders
Rollout of the Nutritional Compass on-pack labelling across 50% of
the entire product range
Inclusion of more Branded Active Benefits (BABs)
Introduced in 1999
Aim of increasing the nutritional content and health
benefits of the products
Peter described his vision as Nestlé being a fleet of agile, fast-
moving businesses
Businesses would remain fast moving by staying focused
on consumers, innovation and communication
Moving towards a global and ultimately a global multifocal
company
2006
Marked the 140th year of operation
Sales increased by over 8% to a shade under 100 billion Swiss
francs
Two basic strategies prevailed: To make a transition to a nutrition,
health and wellness product platform & to make a transition to
being selectively global, where scale was a competitive advantage
Acquired Jenny Craig weight management business
Acquired Australia’s Uncle Toby’s (Breakfast cereals, Nutritious
snacks & Instant soups)28
Now had 30 brands, generating sales over 1 billion francs
Introduced the concept of “Popularly Positioned Products”
Invested in direct store delivery networks
Had 481 operational factories
Integrated concept of Business Executive Manager
Each market now had a profit-responsible manager for each
category
2007
Became the final year as CEO of Peter Brabeck
The major steps in the transition to being a nutrition, health and
wellness company were now complete
Acquired Novartis, Medical Nutrition Division & Gerber baby food
business
The new CEO was Paul Bulcke
29
Comprised of four business units: Infant Nutrition, Healthcare
Nutrition, Performance Nutrition and Weight Management
2008
Consumer down-trading due to the economic environment
Cereal and beverages joint ventures racked up an amazing 20%
Real Internal Growth
Shift to being a Nutrition Health & Wellness company was
complete
‘Creative shared value’ focused on three areas: Nutrition, Water
and Rural Development
2009
Alcon and the L’Oréal ventures did better than the Nestlé food and
drink business
High level of local operating autonomy
An ideal strategy in times of great economic uncertainty 30
2010
Got back to making some strategic moves via mergers and
acquisitions.
Purchase from Kraft of the DiGiorno brand of frozen pizzas
Waters in China
Culinary in the Ukraine
Confectionery in Turkey
Pet Food in North America
Sold Alcon ophthalmic business in August: $41 billion
Split off healthcare nutrition into a standalone Nestlé Health
Science unit
31
2011
Two Chinese businesses acquired 60% ownership positions
Hsu Fu Chi-Makers of sugar confectionery and traditional
Chinese snacks with a strong route-to-market network
Yin Lu-A Nestlé co-packer who also made ready-to-drink
peanut milk and ready-to-eat canned rice porridge
First ever-global launch of a new machine, PIXIE
Reduced the pre-heat time to less than 30 seconds
Cereal Partners Worldwide (Nestlé + General Mills) had now
garnered a global market share of over 20% in the breakfast cereal
category
Beverage Partners Worldwide (Nestlé + Coca-Cola) had evolved
into a sales vehicle for Nestea
Dairy Partners of America, formed with Mexican dairy company
Fonterra, delivered another year of double-digit growth 32
Nestlé DNA is very simple and consists of two complimentary
elements Global
o Factories in 83 countries
o Brand positioning
o Quality standards
o Design styles
o The company does not spend its time endlessly redrawing
boundaries of responsibility, or wrestling with the “who
does what” debate that can preoccupy other global giants
Local
o Everything is done at the local level, tightly managed by
the Nestlé Zone business units It is this mix of local entrepreneurialism, combined with a light but
firm hand of global consistency that makes Nestlé such a
successful company33
Nestlé considered themselves, not a food and beverage company,
but a Nutrition, Health and Wellness company
Three elements of Nestlé’s approach to Nutrition, Health and
Wellness
Nestlé Health Science to pioneer critical illness nutrition
solutions
Addressing specific consumers’ nutrition needs via Nestlé
Nutrition
Offering consumers healthier and tastier choices through the
day
Acquisitions have by no means been directed clearly towards the
nutrition agenda
An extremely strong and very well run food and beverage
company with a unique footprint, gigantic product range and
entrepreneurial operating culture 34
Website: www.nestle.com
LinkedIn: www.linkedin.com/company/nestle-s.a.
Facebook: www.facebook.com/Nestle?brandloc=DISABLE
Twitter: www.twitter.com/nestle
Youtube: www.youtube.com/user/NestleCorporate
Flickr: www.flickr.com/photos/nestle/collections/
35