Nestlé’s journey traces back to Henri Nestlé from Vevey, Switzerland, the company’s founder and namesake. However, its roots also intertwine with two American brothers, Charles and George Page, who were far from Switzerland at the time.
Although the business world wasn’t as interconnected as it is today, a combination of fate, passion for milk, and brilliant marketing eventually led to a union that formed the Nestlé we know.
Charles Page, a U.S. consul, visited Switzerland and became captivated by its renowned dairy farms and lush meadows. Switzerland had long been a hub for high-quality milk production, attracting enthusiasts from all over the world who were passionate about dairy farming.
Page, with his unique vision, sought to create condensed milk—a product that was easy to store and transport, which he believed had the potential to revolutionize the market.
In partnership with his brother George, Charles founded the Anglo-Swiss Condensed Milk Company and inaugurated Switzerland’s first condensed milk factory in Cham in 1866.
Henri’s Experiments and Breakthrough
Henri Nestlé, a local pharmacist from Vevey, Switzerland, was known for his love of experimentation and his relentless pursuit of innovation. He eagerly explored the possibilities of creating groundbreaking food products.
In the 1860s, infant mortality was a major issue in Switzerland, and as someone who had 13 siblings, Henri deeply understood the struggles faced by infants. The turning point came when he observed that premature babies had trouble consuming breast milk.
Driven by his inventive spirit, Henri used available resources and his scientific expertise to create “Farine Lactée” in 1867, an infant formula made from cow’s milk, wheat flour, and sugar.
This product became a turning point for Nestlé, with sales soaring to over 1,000 cans by 1871 and more than 2,000 by 1873. By 1875, Nestlé products were reaching far-off countries, including Indonesia, Egypt, and the United States.
As sales surged, Henri decided to add a logo that represented his family name—“Little Nest”—depicted as a bird’s nest, a symbol that still remains at the heart of Nestlé’s brand today, albeit in a simplified form.
A New Rivalry Emerges
In 1875, Henri retired from the company, and the leadership passed on to three local businessmen in Vevey. Meanwhile, the Anglo-Swiss Condensed Milk Company expanded into European markets. Upon discovering the success of Nestlé’s infant formula, they created a competing product and launched it into the market.
This triggered a fierce rivalry between the two companies, leading to price wars and aggressive market tactics as Nestlé introduced a new condensed milk formula—Farine Lactée—into the market to maintain its edge.
As both companies battled for market dominance, their revenues began to dwindle due to the prolonged price war. After about 30 years of fierce competition and losses, the directors of both companies realized that cooperation was the way forward.
In 1905, a historic merger took place. The Nestlé company and the Anglo-Swiss Condensed Milk Company joined forces, marking the beginning of the globally renowned brand we know today as Nestlé.
For many years, Henri Nestlé and the Page brothers clashed in the milk industry, expanding into European markets, creating competing products, and engaging in aggressive pricing tactics to outmaneuver each other.
However, this emotional approach only resulted in detrimental effects for both businesses, such as declining revenues, increased price sensitivity, and a confused customer base.
The breakthrough came when the directors decided to call a truce and merge their companies, realizing that collaboration would bring greater success than continued rivalry. With the competition now internal, the focus shifted toward improving operations and adopting sustainable business practices. This decision set the course for a prosperous future.
Many companies take years to establish themselves locally before considering international expansion. This cautious approach helps them minimize risks and ensures they have the resources to handle global challenges.
However, Nestlé defied this norm. Having already become a dominant force in Western Europe, with the Page brothers leading the way in Britain, the merger positioned Nestlé as the leading condensed milk brand.
With this strong foundation, Nestlé began to rapidly expand, establishing factories around the world within just a decade. Its operations spanned the UK, Europe, the United States, and Asia, capturing a significant share of the global market.
An Unexpected Opportunity
The outbreak of World War I in 1914 sent shockwaves across industries worldwide, with some thriving while others struggled to survive. Nestlé, too, faced significant challenges at the beginning of the war, particularly with supply shortages and difficulty maintaining an efficient distribution network in Europe. As a result, many of their supplies could no longer meet the needs of local customers.
However, the war brought an unexpected opportunity. With the surge in demand for milk, governments sought contracts with major milk producers and distributors to supply their populations. Nestlé capitalized on this demand by acquiring several government contracts, allowing the company not only to overcome its initial hardships but also to rapidly expand its operations.
Nestlé focused on building most of its factories in the United States, where supply and distribution were more manageable, and by the war’s end, the company had over 40 factories worldwide—effectively doubling its production capacity.
Moving Forward by Embracing Innovation
While the unique circumstances of World War I certainly helped Nestlé grow, it was not the only factor contributing to its rapid expansion. Research and innovation had been the cornerstone of the original companies that formed Nestlé, and these values continued to drive the company’s growth.
At a time when global infrastructure was evolving, Nestlé was quick to adopt and leverage new technologies. Railways and steamships became essential tools for business logistics, enabling the company to access both established and untapped markets. Print media, which was emerging as a powerful marketing tool, became Nestlé’s primary vehicle for brand promotion. Through advertisements in newspapers, magazines, and on billboards, Nestlé highlighted its key strengths: quality, taste, nutrition, safety, and affordability—values that remain central to its brand today.
Throughout the advancements brought about by World War I, Nestlé maintained a clear focus on its core purpose: its products. Despite global disruptions, the company continued to enhance production efficiency, expand its factory capacity, and improve product quality, ensuring that they remained competitive in the market.
Development Thrives Among Those with Ambitious Aspirations
The two World Wars marked pivotal turning points for Nestlé. With challenges like reduced demand and supply disruptions, the company faced significant hurdles. However, Nestlé’s proactive approach to growth—seeking opportunities even in the face of adversity—allowed it to secure vital government contracts during the wars. Had the company not already established a global presence, it may not have attracted the attention of governments. This strategic foresight, combined with innovative marketing and market expansion, helped Nestlé navigate through tough times.
World Wars & Expanding The Product Portfolio
In 1918, when World War I finally ended, the fighting ceased, but the world’s economy remained unstable. Nestlé’s government contracts expired, and the company faced a major setback. The post-war period saw consumers return to fresh milk after shifting to condensed milk during the war, leading to a dip in sales. As a result, Nestlé experienced its first financial loss in 1921.
Amid these challenges, Nestlé’s production costs remained high, and the company struggled to align sales with production. Swiss banker Louis Dapples was appointed to reorganize the company, and his efforts paid off. Dapples not only stabilized the company’s operations but also helped Nestlé clear its outstanding debts. The company spent the next several years focusing on maintaining sustainability and regaining stability.
More Than Just Milk
Nestlé, initially focused on milk and condensed milk, had expanded rapidly into multiple countries. But by the 1920s, growth had stagnated, and consumer preferences shifted back to fresh milk. Faced with this challenge, Nestlé took strategic action by acquiring several companies outside the dairy industry. One of the most notable acquisitions was Kohler Swiss Chocolate, marking the beginning of Nestlé’s expansion into the chocolate market. By the mid-1920s, chocolate had become the second most important product for the company, signaling Nestlé’s successful transition into a diversified global food and beverage brand.
In addition to chocolate, Nestlé expanded its product range by introducing malted milk, a powdered beverage, and Milo, a popular drink mix. The company also developed powdered buttermilk, specifically designed for young children, further diversifying its offerings and catering to a wider range of consumer needs.
The chocolate segment was flourishing for Nestlé, but it wasn’t until the 1930s that they introduced a product that would significantly reshape the company’s future.
In 1930, the Brazilian Coffee Institute approached Nestlé with a unique challenge: Brazil had an excess of coffee, yet there was little demand for it. Over the next eight years, Nestlé embarked on research and experimentation to find a solution.
While the Brazilians proposed coffee cubes, Nestlé had a more innovative idea. In 1938, they launched Nescafé, the world’s first instant soluble coffee. This groundbreaking product quickly became one of Nestlé’s most popular items, revolutionizing the coffee industry. It was soon followed by Nestea, a beloved tea product that continues to influence global tastes to this day.
The USA again becomes the helping hand
Once again, Nestlé turned to the United States for help when faced with challenges. The company saw great potential in Nescafé, but the onset of World War II began to severely impact its operations. Revenues dropped dramatically from $20 million in 1938 to just $6 million in 1939.
Despite Switzerland’s neutrality during both World Wars, Europe’s volatile situation disrupted normal business operations. Nestlé, having learned from its experiences in WWI, relocated its base to Connecticut, far from the conflict.
When the United States entered the war in 1941, it proved to be a blessing for Nestlé. Nescafé quickly became a staple for the U.S. military due to its long shelf life, and its taste had already gained popularity. The product reached a global market with minimal advertising, as soldiers became its first brand ambassadors. Nestlé sent tons of Nescafé to the frontlines, and their sales soared from $100 million in 1938 to $225 million by 1945.
Diversify and innovate
The challenges after WWI, coupled with an economic depression, made life difficult for businesses like Nestlé. The preference shift from condensed to fresh milk posed another problem. Nestlé’s adaptability and bold decisions enabled the company to survive. Understanding that customer demands and market conditions constantly evolve, Nestlé began expanding by introducing new products and entering new markets. This allowed the company to thrive, even in difficult circumstances.
The end of World War II created the perfect environment for Nestlé to elevate its business. With sales at an all-time high, Nescafé and Nestea gaining immense popularity, and support from military and government contracts, the company successfully tapped into new markets.
Unlike after WWI, the post-war world did not plunge into another depression. Instead, it ushered in an era of peace and stability, which companies around the globe were eager to capitalize on. Nestlé, seizing the moment, made bold and strategic moves, turning the post-war years into one of the most dynamic periods in its history.
Seasoned Maggi Soups and Broadened Food Products
As the world recovered from the war, Nestlé pursued an aggressive acquisition strategy, adding multiple global brands to its portfolio. One of the most notable additions was the Swiss company Maggi, known for its soups and noodles.
After WWII, in 1947, Maggi underwent several restructurings and leadership changes. Ultimately, the best path forward was through a merger with Nestlé. Thanks to Nestlé’s established factories in multiple countries, the Maggi brand was introduced to the global market, quickly becoming a household name. In many regions, especially in Asia, Maggi became synonymous with instant noodles.
Expansion and Strategic Acquisitions
Following the acquisition of Maggi, Nestlé continued to broaden its portfolio through several key acquisitions in the food industry:
- 1960: Crosse & Blackwell, a British manufacturer of canned and preserved foods
- 1963: Findus, a Swedish frozen food company
- 1971: Libby, an American fruit juice company
- 1973: Stouffer, a brand known for frozen and prepared foods
These strategic acquisitions allowed Nestlé to diversify its product offerings and solidify its dominance in the preserved food sector.
Innovating and Improving Convenience Products
While Nestlé was expanding its portfolio through acquisitions, it continued to focus on enhancing the products it originally developed.
Nescafé, which had seen significant success during World War II, continued to perform well. From 1950 to 1959, sales nearly tripled. By 1966, Nestlé introduced an anti-freeze version of Nescafé, and sales quadrupled in the following decade.
At the same time, Nestlé introduced new products like Nesquik in 1948, a chocolate powder that mixed easily into cold milk, gaining widespread popularity. The success of Nesquik led to the creation of the Nesquik Bunny, a character designed to appeal to both children and adults.
Venturing Beyond the Food Industry
By the 1970s, Nestlé had firmly established itself as a leader in the food industry. To maintain growth, the company ventured into new industries, beginning with a major acquisition in the beauty sector.
In 1974, Nestlé acquired a 50% stake in L’Oréal, a Parisian hair care company that had expanded from producing hair dyes to a full range of cosmetic products. Nestlé offered the L’Oréal family owners a 3% stake in Nestlé in exchange for the majority share. This partnership proved highly successful, and by the 1980s, L’Oréal became a leader in the cosmetic industry.
Nestlé’s diversification didn’t stop there. In 1977, the company expanded further by acquiring Alcon, an American pharmaceutical company. This acquisition also proved successful, with Alcon becoming a global player in the eye care industry, operating in over 75 countries.
Merger to Remember & The Future of Coffee
Nestlé’s made a groundbreaking move by offering $3 billion to acquire Carnation, a deal that was considered one of the largest acquisitions at the time. The magnitude of this transaction meant that it took a full year for the deal to be approved and finalized.
Nestlé’s interest in Carnation was driven not just by the fact that it was in the same industry, but also because Carnation had a diverse portfolio, including a profitable pet food brand, Friskies, and Contadino tomato products.
Further strengthening its position, Nestlé acquired the Rowntree Mackintosh brand in 1988, gaining ownership of beloved chocolates like KitKat and Smarties. That same year, Nestlé also acquired Buitoni-Perugina, a major Italian pasta and confectionery company, expanding its reach in the pasta and sweet treat segments.
Alongside its strategic mergers, Nestlé was also focused on revitalizing its coffee products. In 1986, it introduced Nespresso, a premium version of its coffee offering that differed significantly from the previous freeze-dried, budget-friendly option. The concept was straightforward yet innovative: create a do-it-yourself system that allowed individuals to enjoy luxury coffee in the comfort of their own homes.
Seek opportunities in both new and existing industries
Nestlé’s strategic approach to growth after WWII was a perfect example of balancing focus and diversification. The company initially solidified its presence in the food industry, making acquisitions and introducing new products. This foundation allowed them to branch out into other industries without losing sight of their core business, namely food, coffee, and chocolate.
Nestlé’s tactic of selectively acquiring and merging with companies that added value to its portfolio paid off handsomely. Its continued focus on product innovation and diversification turned Nestlé into a global powerhouse. This demonstrates the importance of enhancing a brand’s value proposition by not only diversifying but also collaborating strategically with other companies to expand and strengthen its offerings.
International Force – Nestlé’s Global Strategy
Following the fall of the Berlin Wall, markets in Central and Eastern Europe, as well as China, opened up. With trade barriers dissolving and economic markets becoming more integrated, Nestlé was well-positioned to expand further. The company capitalized on this opportunity, using favorable policies to fuel its global growth.
Nestlé continued its aggressive expansion through strategic acquisitions from the late 1990s through the late 2000s. Some key acquisitions include:
- San Pellegrino Group (1998) – Leading to Nestlé Pure Life and expanding its presence in both developed and developing countries.
- Spillers Petfoods (1998) – Strengthening Nestlé’s position in the global pet food market.
- Ralston Purina (2002) – Creating a global leader in pet care with Nestlé Purina Petcare.
- Dreyer’s (2002) – Making Nestlé the leader in the U.S. ice cream market.
- Movenpick Ice Cream (2003) – Enhancing Nestlé’s premium ice cream portfolio.
- Delta Ice Cream (2005) – Expanding into Greece and the Balkans.
- Chef America Inc (2002) – Expanding into the growing frozen foods market.
- Jenny Craig and Uncle Toby’s (2006) – Reinforcing its commitment to nutrition, health, and wellness, particularly in the U.S.
- Medical Nutrition Division of Novartis (2007) – Complementing Nestlé’s healthcare nutrition business.
- Gerber (2007) – Becoming the top player in the U.S. baby food market.
Additionally, strategic partnerships, such as with Belgian chocolatier Pierre Marcolini, further strengthened Nestlé’s presence in the food and nutrition industries, while also expanding into health, wellness, and beauty.
Commitment to Innovation
Nestlé remains deeply committed to improving the lives of people, families, and pets worldwide, ensuring that they lead healthier and happier lives. The company has adapted to the dynamic market changes, responding to evolving consumer demands and new trends while maintaining its focus on providing premium-quality food on demand.
Nestlé: 150-Year-Old Start-up Innovating from Within
Unlike many companies that outsource innovation and struggle to adapt to future changes, Nestlé has combined its scale with the agility and mentality of a start-up. This strategic shift has led to the creation of InGenius, an employee innovation accelerator. This platform encourages intrapreneurship by fostering internal start-ups and empowering employees to think creatively, launch ideas, and act quickly.
In addition, Nestlé’s global R&D accelerator program brings together scientists, students, and employees to collaborate on new and innovative products. The approach is centered around lean designs, rapid prototyping, and swift testing. The goal is to help create new product lines within just nine months, ensuring that Nestlé stays ahead of future trends in the food industry.
By blending the scale of a global leader with the flexibility and speed of a start-up, Nestlé has positioned itself to not only meet the demands of today’s consumers but also shape the future of food.
Rethinking & Reinventing
To remain competitive and appeal to modern consumer trends, Nestlé continuously rethinks and reinvents its approach. The company revitalizes its existing brands by introducing new product varieties and unique flavors that attract new customers while retaining loyal ones. For instance, in 2017, Nestlé launched an impressive 1,000 new products, expanding its portfolio with a variety of juices, milk flavors, organic frozen meals, and non-dairy desserts, among others. These innovations are aimed at exceeding customer expectations and aligning with evolving consumer preferences.
At Nestlé, innovation is at the core of growth, but the company also focuses on improving operational efficiency. From optimizing hiring practices and utilizing data analytics for informed decision-making to streamlining supply chains and deploying advanced manufacturing solutions, Nestlé continuously reviews and revamps its processes to enhance efficiency and deliver impactful business outcomes. This focus on operational excellence helps the company maintain its competitive edge and sustain long-term growth.
Future of Food
Nestlé is also investing in the future of food through its partnerships with Swiss academic and industrial leaders such as ETH Zurich, École Polytechnique Fédérale de Lausanne (EPFL), Bühler, and Givaudan. Together, they have launched the Future of Food research program aimed at developing nutritious, tasty, sustainable, and trendy food and beverage products. This initiative demonstrates Nestlé’s ongoing commitment to innovation and sustainability, ensuring that the company continues to provide healthy, environmentally-friendly products while staying ahead of industry trends.
The Future is Healthy, Sustainable, and Personalized
Nestlé is focused on providing healthier, more sustainable diets to people worldwide. The company is reformulating many of its beloved products, including Kit Kat and Maggi, to reduce sugar, salt, and saturated fat content. Additionally, Nestlé is transitioning its product lines towards organic ingredients to better align with consumer demand for healthier options.
The company is also taking action to reduce its carbon footprint by transitioning to eco-friendly packaging. Nestlé has pledged to phase out all non-recyclable packaging by 2025 and to adopt sustainable packaging solutions across its brands.
Nestlé in the New Normal
Nestlé: The Multi-National Company That Adapts
During the challenging times of Covid-19, Nestlé showed resilience and adaptability. The company made crucial changes to its processing and manufacturing processes to ensure a steady supply of high-quality food during the pandemic. As supply chain challenges intensified, Nestlé focused on streamlining its operations, from sourcing materials to logistics, ensuring continuous service to consumers. As a result, the company saw an impressive 8.1% organic growth in the first half of its fiscal year 2022.
Nestlé: The Best Employer
Nestlé put the health and safety of its employees first by implementing enhanced safety measures across all its facilities, including factories, distribution centers, labs, and offices. The company took several proactive steps to protect and motivate its workforce during the pandemic:
- Allowing employees to work from home where possible
- Restricting travel and exposure to the virus
- Introducing stringent hygiene practices
- Implementing effective social distancing measures
- Offering a special 14-day COVID-19 leave
- Providing financial support in the form of loans
Nestlé also demonstrated a strong sense of social responsibility during the pandemic by supporting communities and frontline workers. The company provided essential items like food, bottled water, and financial aid to medical institutions, food banks, and relief organizations. In addition, Nestlé partnered with the International Federation of the Red Cross and Red Crescent Societies (IFRC), donating CHF 10 million. To accelerate vaccination efforts, the company worked with COVAX and contribted CHF 2 million to ensure fair vaccine distribution.
Globalize But Also Localize
Nestlé’s success globally can be attributed to its ability to localize its operations and offerings. While the company could have implemented a one-size-fits-all strategy, it chose to adapt to each market by tailoring everything from sourcing, product development, production, marketing, and branding to fit local needs and preferences. This customer-centric approach underscores the importance of understanding and addressing specific consumer demands, regardless of the company’s global presence.
Grow Through Acquisitions
With over 2000 brands under its umbrella, Nestlé has effectively used acquisitions as a means to fuel growth. By seeking out and acquiring companies that complement or enhance its existing portfolio, Nestlé has expanded into new industries and diversified its product lines. This external growth strategy has allowed the company to increase market share, gain competitive advantages, and achieve operational synergies.
Importance of Brand & Values
Nestlé’s commitment to its core values has been central to its global success. By staying true to its guiding principles—particularly its mission to “unlock the power of food to enhance the quality of life for everyone, today and for generations to come“—Nestlé has been able to build a strong, authentic brand that resonates with consumers. Its dedication to quality, sustainability, and customer satisfaction has established it as not just a food company, but a trusted global icon.
Prepared by Zukhrakhon Mansurova
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