Have you ever really noticed how many different items at your local grocery store have the Nestle brand on them? You can find Nestle in the refrigerated aisle, the baking aisle, the water aisle, and even the pet food aisle! The company has relied on the combination of acquiring a vast assortment of products and marketing itself based on the need for those products in order to make it the powerhouse company that it is today.
A Turbulent Beginning
The Nestle company and brand is the result of a merger of two rival companies that spent years competing fiercely against each other. Charles and George Page, brothers from Illinois, USA, opened the Anglo-Swiss Condensed Milk Company in Switzerland. The next year, Henri Nestle developed a milk-based baby food. In 1868, Daniel Peter began his own milk chocolate manufacturing process, which would take 7 years to perfect. Nestle offered assistance to Peter, helping him master his recipe and create the first milk chocolate.
Nestle retired in 1875, but the company he created remained under his name in spite of having new ownership. In 1877, Anglo-Swiss began to make milk-based baby food; then, Nestle started making condensed milk. The fact that both companies were now making the same products made them rivals – and the rivalry was intense. In 1879, Nestle began working directly with Peter, adding milk chocolate to their growing list of products.
In 1905, the two rival companies merged. The resulting company was named the Nestle and Anglo-Swiss Condensed Milk Company, and it kept that name for years. The company became known as Nestle in 1977.
War Changes Everything
Nestle had companies in the United States, the United Kingdom, Germany, and Spain by the 1900s. The demand for dairy products skyrocketed during World War I with government contracts. Nestle companies’ production more than doubled by the time the first world war was over. Nestle expanded even more in 1919 by buying two more condensed milk plants from another company called Geibisch and Joplin.
However, World War II caused Nestle’s profits to drop by $14 million from 1938 to 1939. They began to open factories in developing countries, especially in Latin America. As luck would have it, though, Nestle’s newest product, Nescafe – Nestle’s Coffee, became a staple in the US military, so Nestle’s profits began to rise again.
Adding Products to the Portfolio
Over the next few decades, Nestle focused on expanding its empire, buying a number of brands and adding their products to its portfolio. Some of the brands that Nestle bought were Stouffer’s, L’Oreal, Friskies, Smarties, and Coffee-mate.
Between 1990 to 2011, Nestle saw significant international growth, acquiring even more brands. Currently, Nestle owns over 2000 brands and has a truly huge range of products. Some of the many products that fall under the Nestle brand are coffee, bottled water, breakfast cereals, infant foods, seasonings, soups, and even pet food.
The Current State of Nestle
Nestle is an incredibly successful company today; it is the biggest food company in the entire world. In 2015, the company grossed $247 billion.
The 2015 breakdown of Nestle’s sales was:
- 20.3 billion powdered and liquid beverages
- 16.7 billion milk products and ice cream
- 13.5 billion prepared dishes and cooking aids
- 13.1 billion nutrition and health science
- 11.3 billion petcare
- 9.6 billion confectionary
- 6.9 billion water
Also as of 2015, Nestle was given a reputation score of 74.5 on a scale of 1-100 in a survey given by the Reputation Institute.
Cloaked in Scandal
Nestle may be the world’s leading food company, but that reputation has been challenged on more than one occasion. In 1977, a boycott was launched against Nestle because of their “aggressive marketing” of baby formula. The boycott was suspended, only to be relaunched in 1989! Even though Nestle has agreed to follow the marketing guidelines of breast milk substitutes, there have been boycotts, investigations, and criticisms of Nestle because of its baby formula marketing on and off ever since the first boycott.
Nestle acted unethically by convincing the World Water Council to change the wording of a “right” to drinking water to a “need” of drinking water in 2000. In 2002, the company attempted to make Ethiopia pay them for a $6 million debt the country accrued with them while Ethiopia was in the middle of a famine. In 2005, there was a lawsuit filed against Nestle and other companies on behalf of 3 Malian children as a result of investigations into child labor that was being used on a specific cocoa plantation that Nestle used.
In 2007, some of the Canadian Nestle offices were raided in an attempt to investigate chocolate price-fixing. The company settled for $9 million outside of court, however, and never admitted to price-fixing. In 2008, Nestle came under fire for claiming that its bottled water was environmentally superior to other bottled waters even though the company had admitted that most of its plastic bottles end up in landfills. Furthering the controversy with Nestle Pure Life Water, Nestle was accused of pulling too much water from California, Oregon, and Michigan during times of drought.
In 2015, there was a Ukrainian boycott of Russian-made Nestle products, like Nesquik. Also in 2015, Nestle admitted that their Thailand-sourced seafood products had been produced by forced labor. The most recent scandal to affect Nestle happened in 2017 when Nestle was found to be growing cocoa illegally in national parks and other environmentally protected areas.
They Aren’t All Bad, Though
While Nestle has had a significant amount of controversy, they have put forth many efforts to better the world we live in as well. Some of their efforts have included:
- Nestle and other chocolate companies formed the World Cocoa Foundation in 2000 to ensure sustainable cocoa farming.
- Nestle and two other companies created the Sustainable Agriculture Initiative in 2002 to promote sustainable agriculture practices.
- The company adopted the Created Shared Value business concept in 2006, which encourages businesses to focus on social issues that they can address.
- In 2009, Nestle announced “The Cocoa Plan,” which stated that they had a goal of making 100% of its chocolate using sustainable cocoa.
- Nestle signed the “Ecolaboration” pact in 2009 with the Rainforest Alliance that stated shared environmentally-friendly ideals.
- The Nescafe Plan was launched by Nestle in 2010 in order to increase the production of sustainable coffee.
- In 2010, Nestle announced that it’d be developing health and wellness products, more than $500 million worth, from 2011 to 2020.
- Nestle joined the Fair Labour Association in 2011 to do its part in making sure that labor conditions are suitable in developing countries.
- In 2012, Nestle developed the Rural Development Framework program that invests in infrastructure, safe water access, and more to support farmers and cocoa-growing communities.
- Nestle and the International Federation and Red Cross and Red Crescent Societies are partnered to make safe water more available.
Boasting the extensive range of products that the Nestle company does, it isn’t hard to stay relevant. Some product or another will always remain in need. In addition to relying on the need for its products in order to stay a leading food company, Nestle has also used sponsorships for music, entertainment, and sports to keep its name in the mouths of consumers everywhere.
Nestle has been the sponsor of music festivals in Beijing and Austria; the company even partnered with the Salzburg Festival in Austria to bestow the “Nestle and Salzburg Festival Young Conductors Award” regularly. For much of the 90s and 2000s, Nestle sponsored The Land Pavilion in Walt Disney’s Epcot Center. Nestle has been known to sponsor the Tour de France, Great Britain Lionesses Women’s Rugby League, and a kids’ athletics program through the International Association of Athletics Federations.