Nestlé

Nestlé S.A.
Société Anonyme
Traded asNESN
CH0038863350
IndustryFood processing
Founded1866; 153 years ago (1866) (as Anglo-Swiss Condensed Milk Company)
1867; 152 years ago (1867) (as Farine Lactée Henri Nestlé)
1905; 114 years ago (1905) (as Nestlé and Anglo-Swiss Condensed Milk Company)
FounderHenri Nestlé
HeadquartersVevey, Vaud, Switzerland
Area served
Worldwide
Key people
Paul Bulcke[1]
(Chairman)
Ulf Mark Schneider[1]
(CEO)
ProductsBaby food, coffee, dairy products, breakfast cereals, confectionery, bottled water, ice cream, pet foods (list...)
RevenueIncrease CHF89.791 billion (2017)[2]
Decrease CHF10.112 billion (2017)[2]
Decrease CHF7.538 billion (2017)[2]
Total assetsDecrease CHF130,380 million (2017)[2]
Total equityDecrease CHF62,777 million (2017)[2]
Number of employees
Decrease 323,000 (2017)[2]
WebsiteOfficial website Edit this at Wikidata

Nestlé S.A. (əl/, formerly z/; French: [nɛsle]) is a Swiss transnational food and drink company headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world, measured by revenues and other metrics, since 2014.[3][4][5][6][7] It ranked No. 64 on the Fortune Global 500 in 2017[8] and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.[9]

Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1 billion),[10] including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has 447 factories, operates in 189 countries, and employs around 339,000 people.[11] It is one of the main shareholders of L'Oreal, the world's largest cosmetics company.[12]

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé.[13] The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, Klim in 1998, and Gerber in 2007.

Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market Index. It has a secondary listing on Euronext.

History

1866–1900: Founding and early years

Henri Nestlé, a Swiss confectioner, was the founder of Nestlé and one of the main creators of condensed milk.
The logo that Nestlé used until 1966

Nestlé's origins date back to the 1860s, 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.[14]

In 1866, Charles Page (US consul to Switzerland) and George Page, brothers from Lee County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in 1873.[15]

In 1867, in Vevey, Henri Nestlé developed milk-based baby food and soon began marketing it. The following year saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process. Nestlé was the crucial co-operation that 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 Société Farine Lactée Henri Nestlé.

In 1877, Anglo-Swiss added milk-based baby foods to their products; in the following year, the Nestlé Company added condensed milk to their portfolio, which made the firms direct and fierce rivals.

In 1879, Nestlé merged with milk chocolate inventor Daniel Peter.

1901–1989: Mergers

Aleppo Nestle building Tilal street 1920s.
Certificate for 100 shares of the Nestlé and Anglo-Swiss Condensed Milk Co., issued 1. November 1918

In 1904, François-Louis Cailler, Charles Amédée Kohler, Daniel Peter, and Henri Nestlé participated in the creation and development of Swiss chocolate, marketing the first chocolate – milk Nestlé.[16]

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, the United Kingdom, Germany, and Spain. The First World War created demand for dairy products in the form of government contracts, and, by the end of the war, Nestlé's production had more than doubled.

A 1915 advertisement for "Nestlés Food", an early infant formula

In January 1919, Nestlé bought two condensed milk plants in Oregon from the company Geibisch and Joplin for $250,000. One was in Bandon, while the other was in Milwaukie. They expanded them considerably, processing 250,000 pounds of condensed milk daily in the Bandon plant.[17]

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

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-manufacture becoming the company's second most important activity. Louis Dapples was CEO till 1937 when succeeded by Édouard Muller till his death in 1948.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and numerous companies were acquired. In 1947 Nestlé merged with Maggi, a manufacturer of 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'Oreal in 1974. In 1977, Nestlé made its second venture outside the food industry, by acquiring Alcon Laboratories Inc.

In the 1980s, Nestlé's improved bottom line allowed the company to launch a new round of acquisitions. Carnation was acquired for $3 billion in 1984 and brought the evaporated milk brand, as well as Coffee-Mate and Friskies to Nestlé. In 1986 Nestlé Nespresso S.A. was founded. The confectionery company Rowntree Mackintosh was acquired in 1988 for $4.5 billion, which brought brands such as Kit Kat, Smarties, and Aero.

1990–2011: Growth internationally

The first half of the 1990s proved to be favourable for Nestlé. Trade barriers crumbled, and world markets developed into more or less integrated trading areas. Since 1996, there have been various acquisitions, including San Pellegrino (1997), D'Onofrio (1997), Spillers Petfoods (1998), and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002 – in June, Nestlé merged its US 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 entered in a joint bid with Cadbury and came close to purchasing the iconic American company Hershey's, one of its fiercest confectionery competitors, but the deal eventually fell through.[18]

In December 2005, Nestlé bought the Greek company Delta Ice Cream for €240 million. In January 2006, it took full ownership of Dreyer's, thus becoming the world's largest ice cream maker, with a 17.5% market share.[19] In July 2007, completing a deal announced the year before, Nestlé acquired the Medical Nutrition division of Novartis Pharmaceutical for US$2.5 billion, also acquiring, the milk-flavoring product known as Ovaltine, the "Boost" and "Resource" lines of nutritional supplements, and Optifast dieting products.[20]

The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia), in February 2007

In April 2007, returning to its roots, Nestlé bought US baby-food manufacturer Gerber for US$5.5 billion.[21][22][23] In December 2007, Nestlé entered into a strategic partnership with a Belgian chocolate maker, Pierre Marcolini.[24]

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.[25] On 1 March 2010, Nestlé concluded the purchase of Kraft Foods's North American frozen pizza business for US$3.7 billion.

Since 2010, Nestle has been working to transform itself into a nutrition, health and wellness company in an effort to combat declining confectionery sales and the threat of expanding government regulation of such foods. This effort is being led through the Nestlé Institute of Health Sciences under the direction of Ed Baetge. The institute aims to develop "a new industry between food and pharmaceuticals" by creating foodstuffs with preventative and corrective health properties that would replace pharmaceutical drugs from pill bottles. The Health Science branch has already produced several products, such as drinks and protein shakes meant to combat malnutrition, diabetes, digestive health, obesity, and other diseases.[26]

In July 2011, Nestlé SA agreed to buy 60 percent of Hsu Fu Chi International Ltd. for about US$1.7 billion.[27] On 23 April 2012, Nestlé agreed to acquire Pfizer Inc.'s infant-nutrition, formerly Wyeth Nutrition, unit for US$11.9 billion, topping a joint bid from Danone and Mead Johnson.[28][29][30]

2012–present: Recent developments

In recent years, Nestlé Health Science has made several acquisitions. It acquired Vitaflo, which makes clinical nutritional products for people with genetic disorders; CM&D Pharma Ltd., a company that specialises in the development of products for patients with chronic conditions like kidney disease; and Prometheus Laboratories, a firm specialising in treatments for gastrointestinal diseases and cancer. It also holds a minority stake in Vital Foods, a New Zealand-based company that develops kiwifruit-based solutions for gastrointestinal conditions as of 2012.[31]

Another recent purchase included the Jenny Craig weight-loss program, for US$600 million. Nestlé sold the Jenny Craig business unit to North Castle Partners in 2013.[32] In February 2013, Nestlé Health Science bought Pamlab, which makes medical foods based on L-methylfolate targeting depression, diabetes, and memory loss.[33] In February 2014, Nestlé sold its PowerBar sports nutrition business to Post Holdings, Inc.[34] Later, in November 2014, Nestlé announced that it was exploring strategic options for its frozen food subsidiary, Davigel.[35]

In December 2014, Nestlé announced that it was opening 10 skin care research centres worldwide, deepening its investment in a faster-growing market for healthcare products. That year, Nestlé spent about $350 million on dermatology research and development. The first of the research hubs, Nestlé Skin Health Investigation, Education and Longevity Development (SHIELD) centres, will open mid 2015 in New York, followed by Hong Kong and São Paulo, and later others in North America, Asia, and Europe. The initiative is being launched in partnership with the Global Coalition on Aging (GCOA), a consortium that includes companies such as Intel and Bank of America.[36]

Nestlé announced in January 2017 that it was relocating its U.S. headquarters from Glendale, California, to Rosslyn, Virginia outside of Washington, DC.[37]

In March 2017, Nestlé announced that they will lower the sugar content in Kit Kat, Yorkie and Aero chocolate bars by 10% by 2018.[38] In July followed a similar announcement concerning the reduction of sugar content in its breakfast cereals in the UK.[39]

The company announced a $20.8 billion share buyback in June 2017, following the publication of a letter written by Third Point Management founder Daniel S. Loeb, Nestlé's fourth-largest stakeholder with a $3.5 billion stake,[40] explaining how the firm should change its business structure.[41] Consequently, the firm will reportedly focus investment on sectors such as coffee and pet care and will seek acquisitions in the consumer health-care industry.[41]

In September 2017, Nestlé S.A. acquired a majority stake of Blue Bottle.[42] While the deal's financial details were not disclosed, the Financial Times reported "Nestle is understood to be paying up to $500m for the 68 per cent stake in Blue Bottle".[43] Blue Bottle expects to increase sales by 70% this year.[44]

In September 2017, Nestlé USA agreed to acquire Sweet Earth, a California-based producer of plant-based foods, for an undisclosed sum.[45]

In January 2018, Nestlé USA announced it is selling its U.S. confectionary business to Ferrero, an Italian chocolate and candy maker.[46] The company was sold for a total of an estimated $2.8 billion.[46]

In May 2018, it was announced that Nestlé and Starbucks struck a $7.15 billion distribution deal, which allows Nestlé to market, sell and distribute Starbucks coffee globally and to incorporate the brand's coffee varieties into Nestlé's proprietary single-serve system, expanding the overseas markets for both companies.[47]

Nestle set a new profit target in September 2017 and agreed to offload over 20 of its US candy brands in January 2018. However, sales grew only 2.4% in 2017, and as of July 2018, share price declined more than 8%. While some suggestions were adopted, Loeb said in a July 2018 letter that the shifts are too small and too slow. In a statement, Nestle wrote that it was "delivering results" and listed actions it had taken, including investing in key brands and its global coffee partnership with Starbucks. However, activist investors disagreed, leading Third Point Management to launch NestleNOW, a website to push its case with recommendations calling for change, accusing Nestle of not being as fast, aggressive, or strategic as it needs to be. Activist investors called for Nestle to divide into three units with distinct CEOs, regional structures, and marketing heads - beverage, nutrition, and grocery; spin off more businesses that do not fit its model such as ice cream, frozen foods, and confectionery; and add an outsider with expertise in the food and beverage industry to the board.[48][49]

In October 2018, Nestlé announced the launch of the Nestlé Alumni Network through a strategic partnership with SAP & EnterpriseAlumni to engage their over 1million Alumni globally.

In September 2018, Nestlé announced to sell Gerber Life Insurance for $1.55 billion.[50][51]

Other Languages
Alemannisch: Nestlé
العربية: نستله
asturianu: Nestlé
azərbaycanca: Nestle
تۆرکجه: نستله
বাংলা: নেসলে
Bân-lâm-gú: Nestlé
беларуская: Nestlé
Bikol Central: Nestlé
български: Нестле
català: Nestlé
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čeština: Nestlé
dansk: Nestlé
Deutsch: Nestlé
Ελληνικά: Nestlé
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euskara: Nestlé
فارسی: نستله
français: Nestlé
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galego: Nestlé
한국어: 네슬레
հայերեն: Nestlé
हिन्दी: नेस्ले
hrvatski: Nestlé
Bahasa Indonesia: Nestlé
íslenska: Nestlé
italiano: Nestlé
עברית: נסטלה
Basa Jawa: Nestlé
ಕನ್ನಡ: ನೆಸ್ಲೆ
ქართული: Nestlé
қазақша: Nestlé
Latina: Nestlé
latviešu: Nestlé
lietuvių: Nestlé
magyar: Nestlé
македонски: Nestle
Bahasa Melayu: Nestlé
Nederlands: Nestlé
日本語: ネスレ
norsk: Nestlé
norsk nynorsk: Nestlé
oʻzbekcha/ўзбекча: Nestle
ਪੰਜਾਬੀ: ਨੇਸਲੇ
پنجابی: نیسلے
polski: Nestlé
português: Nestlé
română: Nestlé
русский: Nestlé
Scots: Nestlé
Simple English: Nestlé
slovenčina: Nestlé
Soomaaliga: Nestlé
српски / srpski: Nestle
srpskohrvatski / српскохрватски: Nestlé
suomi: Nestlé
svenska: Nestlé
Tagalog: Nestlé
தமிழ்: நெஸ்லே
Türkçe: Nestlé
українська: Nestlé
Tiếng Việt: Nestlé
Winaray: Nestlé
吴语: 雀巢公司
Yorùbá: Nestlé
粵語: 雀巢
中文: 雀巢