Nestle - The Company

Nestlé S.A. (French pronunciation: [nɛsˈle]) is one of the largest food and nutrition companies in the world, founded and headquartered in Vevey, Switzerland. Nestlé originated in a 1905 merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lactée Henri Nestlé Company, which was founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world and employs nearly 283,000 people.
History
The company dates to 1867, when two separate Swiss enterprises were founded that would later form the core of Nestlé. In the succeeding decades the two competing enterprises aggressively expanded their businesses throughout Europe and the United States.

In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA established the Anglo-Swiss Condensed Milk Company in Cham. Their first British operation was opened at Chippenham, Wiltshire in 1873.

Henri Nestle

In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon began marketing it. The following year, 1868, saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process; M. Nestlé's was the crucial cooperation M. Peter needed to solve the problem of removing all the water from the milk added to his chocolate and thus preventing the product from developing mildew. Henri Nestlé retired in 1875, but the company, under new ownership, retained his name as Farine Lactée Henri Nestlé.

In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following year the Nestlé Company added condensed milk, so that the firms became direct and fierce rivals.

In 1905 the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk Company, retaining that name until 1947, when the name Nestlé Alimentana SA was taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup mixes and related foodstuffs. The company’s current name was adopted in 1977. By the early 1900s, the company was operating factories in the United States, United Kingdom, Germany and Spain. World War I created new demand for dairy products in the form of government contracts; by the end of the war, Nestlé's production had more than doubled.

After the war, government contracts dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the company's second most important activity.

Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million in 1938 to US$6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the company's newest product, Nescafé ("Nestlé's Coffee"), which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974. In 1977, Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc.

In 1984, Nestlé's improved bottom line allowed the company to launch a new round of acquisitions, notably American food giant Carnation and the British confectionery company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to Nestlé.

The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in June, Nestlé merged its U.S. ice cream business into Dreyer's, and in August a US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets. In the same time frame, Nestlé came close to purchasing the iconic American company Hershey's, one of its fiercest confectionery competitors, though the deal fell through. Another recent purchase included the Jenny Craig weight loss program for US$600 million.

In December of 2005, Nestlé bought the Greek company Delta Ice Cream for €240 million. In January of 2006, it took full ownership of Dreyer's, thus becoming the world's biggest ice cream maker with a 17.5% market share.

In November of 2006, Nestlé purchased the Medical Nutrition division of Novartis Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavoring product known as Ovaltine.

In April of 2007, returning to its roots, Nestlé bought baby-food manufacturer Gerber for $5.5 billion.
In December of 2007, Nestlé entered in a strategic partnership with a Belgian chocolate maker Pierre Marcolini. Nestlé agreed to sell its controlling stake in Alcon to Novartis on 4 January, 2010. The sale was to form part of a broader US $39.3 billion offer, by Novartis, for full acquisition of the world’s largest eye-care company.

Management

The executive board, a distinct entity from the board of directors, includes:

• Peter Brabeck-Letmathe, Chairman of the Board of Directors, Nestlé S.A.

• Paul Bulcke, Chief Executive Officer, Nestlé S.A.

• Werner Bauer, Executive Vice President, Nestlé S.A., Chief Technology Officer, Head of Innovation, Technology, Research & Development

• Friz van Dijk, Executive Vice President, Nestlé S.A. Asia, Oceania, Africa, Middle East

• Luis Cantarell, Executive Vice President, Nestlé S.A. United States of America, Canada, Latin America, Caribbean

• José Lopez, Executive Vice President, Nestlé S.A. Operations, GLOBE

• John J. Harris, Executive Vice President, Nestlé S.A. Chairman & CEO of Nestlé Waters

• Nandu Nandkishore, Executive Vice President, Nestlé S.A. CEO of Nestlé Nutrition

• James Singh, Executive Vice President, Nestlé S.A. Finance and Control, Legal, IP, Tax, Global Nestlé Business Services

• Laurent Freixe, Executive Vice President, Nestlé S.A. Europe

• Petraea Heynike, Executive Vice President, Nestlé S.A. Strategic Business Units, Marketing, Sales and Nespresso

• Marc Caira, Deputy Executive Vice President, Nestlé S.A. Head of Nestlé Professional Strategic Business Division

• Jean-Marc Duvoisin, Deputy Executive Vice President Nestlé S.A. Head of Human Resources and Centre Administration

• David P. Frick, Senior Vice President and ex officio Member of the Executive Board

According to a 2006 global survey of online consumers by the Reputation Institute, Nestlé has a reputation score of 70.4 on a scale of 1–100.

Earnings

In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and development investment was CHF 2.02 billion.

• Sales by activity breakdown: 27% from drinks, 26% from dairy and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products, 6% from pharmaceutical products and 2% from baby milks.
• Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world.

Joint Ventures

Nestlé holds 26.4% of the shares of L'Oréal, the world's largest company in cosmetics and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between Nestlé and L'Oréal, and Galderma a joint venture in dermatology with L'Oréal. Others include Cereal Partners Worldwide with General Mills, Beverage Partners Worldwide with Coca-Cola, and Dairy Partners Americas with Fonterra.