Political factors: The company’s ability to impact the

government
Since Nestlé operates in more than 190 countries, any shift in regulatory
environments can massively impact operations. Multinational firms like
Nestlé have a greater risk of production bottlenecks because of
governmental policies and changes. Basically, the more countries a
business operations in, the greater the chance of policy changes that
may interrupt operations.
For example, the Brexit situation threw a wrench in Nestlé’s plans. The
change threatens the livelihood of production and food workers. Europe
is an important market for Nestlé production and profits. And the
instability of Brexit has disrupted the entirety of the UK food supply
chain. The Brexit change has been so catastrophic that Nestlé discussed
replacing production in Newcastle and York to Poland. Since, even now,
Brexit is still in the air, the company doesn’t have faith in the future of
the country. For that reasoning, it’s smarter to move operations out of
this volatile landscape.
Although political changes often affect the company, moving operations
out of the country affects the unstable environment for Britain. Losing
Nestlé means a loss of over 300 jobs, impacting the already controversial
political British climate. Keep in mind, not many companies can impact
political stability, but Nestlé can.
Nestlé also has to abide by the changing of food standards and
regulations. Each country has its own set of regulations. If Nestlé doesn’t
abide by them, they’ll be cut off; the products won’t be purchasable, nor
edible, in the eyes of the government.

Many food companies, like Nestlé, are experiencing problems associated

with the rising costs of ingredients. As such, many are decreasing the
amount of product they offer. This is a particular problem for chocolate.
People continue to buy chocolate treats at the same (or even increased)
price, without knowing companies are shrinking the amount of product
they get.

Economic factors: A surprising increase of profits after a

slow year
Foreign exchange swings are an economic issue for Nestlé. As a
multinational firm, the company is easily impacted by the sway of
foreign-exchange rates and prices. If the currency weakens, it may lead
to profit loss, depending on the location. It could also result in the
reverse — a profit increase. Or cheaper options for the importing or
exporting of goods.
Within the last couple of years, Nestlé has been in an upswing for profit.
In fact, in 2018, the company’s profits increased by more than 40
percent. According to the company, profits changed from $7.6 billion to
$10 billion. Much of this success is thanks to three things: The United
States market, the Chinese market, and selling off its confectionery
business.
This is a big difference, considering the company reported less than
stellar results from 2017. The company blamed a decrease in consumer
demand in the US and Brazil. But at that time, Nestlé’s CEO Mark
Schneider held faith that company profits would increase in 2018… and
boy, was he right!

Social factors: The food is adored, the company… not so

much
The social environment, including the attitudes, buying behaviors, and
changing demographics, all affect a business. What’s truly affected food
and beverage companies like Nestlé is the public’s obsession with healthy
eating. People want to consume less sugar and lower calorie foods.
Nestlé knows this. If it didn’t, the company would be in a world of
trouble. Nestlé is focusing on reducing sugar, salt, and saturated fat in
some of its products. This requires reformulating existing products, but
it also opens the door for new versions of classic foods and drinks Nestlé
consumers love.

Although the food is still adored, the company is held less favourably.

Over the last couple of years, Nestlé ran into controversy regarding the
extraction and usage of drinking water. Nestlé takes spring water from
the land, leaving nothing or polluted water behind in its wake. This has
affected indigenous Canadian land, and locations like Flint, Mich.

When the company does pay to take this water, the price is next to
nothing. Combine this with what previous Nestlé CEO Peter Brabeck-
Letmathe said about the rights to water being “extreme”, people have
become weary of Nestlé. Some are even boycotting the company,
although this can be difficult since Nestlé owns so many food products.

Technological factors: More ways to increase production

and quantity
Nestlé needs to spend more money on research and development. It has
more technology at its disposal to achieve greater feats in the R&D
department; social media, digital surveys, email marketing, discounts…
the list goes on.
It’s much easier to connect with audiences all over the world thanks to
evolving technology. It also means Nestlé has more options to increase
production, food quality, and food availability to consumers.
Some companies are adopting blockchain technology to have full
informational access to products — from development to delivery. This is
also an option for Nestlé, as it can decrease production time. At the
moment, it’s still a costly venture, and would need to be introduced
slowly to each of Nestlé’s production lines.
PEST Analysis of Nestle: Conclusion
Nestlé is a massive company with ties to 194 countries. It has the funds
and presence to impact governments. It’s also on a profit upswing,
despite the major controversies about Nestlé’s ownership and views
about water rights. The company is in the position to adopt new
technology to learn more about what their consumers want, but if they
don’t clean up their public image, it might be for nothing.

I’ve more examples of products, companies, and countries affected by

PEST (as well as legal and environmental issues – included in a PESTLE
analysis) too.