History & Origin . . . . . . . . . . . . . . . . . . . 3

Modern Business . . . . . . . . . . . . . . . . . 15

Company Structure . . . . . . . . . . . . . . 21

Recent Efforts . . . . . . . . . . . . . . . . . . . 25

Company DNA . . . . . . . . . . . . . . . . . 33

Summary . . . . . . . . . . . . . . . . . . . . . . . 34

Social Media Accounts . . . . . . . . . . . 35

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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%

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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

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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

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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

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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

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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

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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

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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/

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