CASE STUDY OF NESTLÉ

History of Nestlé
Nestlé was founded in 1866 by Henri Nestlé in Vevey, Switzerland. Nestlé started as a food company
specializing in the production of milk-based baby food. In 1905, Nestlé merged with the Anglo-Swiss
Condensed Milk Company, which had been founded in 1866 by brothers George and Charles Page.
The merger was a huge success and the company grew rapidly. By the 1920s, Nestlé had become one
of the world's largest food companies. (Nestlé, 2022)
Over the years, Nestlé has acquired and merged with many other companies, including Rowntree
Mackintosh in 1988 and San Pellegrino in 1997. In 2002, Nestlé purchased the American candy
company, Hershey. In 2012, Nestlé acquired Pfizer's infant nutrition business, making it the world's
largest nutrition, health and wellness company. Today, Nestlé has more than 2000 brands and is present
in 189 countries. It is one of the largest food companies in the world and is the largest food and
beverage company in Europe. The company has grown to be a major player in the food and beverage
industry, with brands such as Nescafe, KitKat, and Maggi. Nestlé’s corporate strategy focuses on
driving profitable growth and creating value for shareholders, customers, and society as a whole.
Nestlé’s mission is to “enhance quality of life and contribute to a healthier future”. To achieve this, the
company has adopted a “Total Value Chain” approach to business, placing emphasis on the entire
supply chain, from raw materials to finished products. This approach enables Nestlé to ensure that its
products are of the highest quality, while also taking into account social and environmental factors.
(Nestle, 2012)
Nestlé is the largest food and beverage company in the world. Nestlé’s products span a range of
categories, including baby food, coffee, confectionery, dairy products, breakfast cereals, pet food, and
bottled water. Nestlé’s mission is “good food, good life” and its motto is “the good food company.”
(Pfiffner & Renk, 2007)
Challenges Of the Food and Beverage Industry
The food and beverage industry has been facing many challenges over the last few years. These
challenges include rising raw material costs, increasing competition, changing consumer preferences,
increasing health and safety regulations, and changing environmental regulations. Nestlé, the world’s
largest food and beverage company, is no stranger to these challenges. In response to these challenges,
Nestlé has implemented a range of strategies, including investing in research and development to create
innovative products, developing sustainable supply chains, and investing in new technology to improve
efficiency and reduce costs.
Sales Evolution of The Industry
In the past decade, the global food and beverage industry has experienced significant growth due to
increased consumer demand for convenience and health-conscious food and beverage products. The
industry has also benefited from the growth of the e-commerce sector, with many consumers now
buying their food and beverage products online. This growth has been driven by strong sales growth in
the developed markets of Europe and North America, as well as growth in emerging markets such as
Asia-Pacific, Latin America and Africa. (Orendorff, 2022)
Nestlé is a major player in the global food and beverage industry, with annual sales of more than CHF
90 billion in 2020. Nestlé has experienced strong sales growth in recent years, driven by the growth of
its core business and innovative product launches. The enterprise has also experienced strong growth in
its e-commerce sales, with sales in this channel increasing from CHF 2.6 billion in 2017 to CHF 6.5
billion in 2020. This growth has been due to the company’s focus on digital transformation and its
launch of new e-commerce initiatives, such as its direct-to-consumer platform ‘Nestlé Now’. (Harvey,
2022)
Nestlé has been able to capitalize on this growth, with its strong portfolio of brands and products
helping it to remain a leader in the industry. Nestlé’s sales have grown from CHF 53.7 billion in 2011
to CHF 92.2 billion in 2020, representing a compound annual growth rate of 7.3%. (Nguyen, 2021)
Qualitative Analysis: SWOT Food and Beverage Industry
SWOT analysis is a useful tool for understanding the strengths and weaknesses of a particular industry,
as well as the opportunities and threats it faces. In the food and beverage industry, SWOT analysis can
be used to identify the competitive advantages and disadvantages of a company and its products or
services. (Mahajan, 2021)
Strengths: Weaknesses: Opportunities: Threats:
1.Established distribution 1.Regulatory restrictions: 1. Growing demand: The 1. Rising costs: The cost
channels: Food and The food and beverage demand for food and of ingredients and
beverage companies industry is subject to beverage products is equipment used in the
usually have access to strict regulations, which increasing as the production of food and
established distribution can limit the ability of population grows and beverage products are
channels that have been companies to innovate or health concerns become constantly increasing,
developed over a long compete. more prevalent. This which can reduce profit
period of time. This presents an opportunity margins and make it
allows them to get their for companies to difficult to remain
products to consumers capitalize on the growing competitive.
quickly and efficiently. demand.
2. Brand recognition: The 2. Health risks: As food 2. Expansion into new 2. Intense competition:
food and beverage and beverage products markets: The food and The food and beverage
industry is highly are often consumed by beverage industry has the industry is highly
competitive, and many large numbers of people, potential to expand into competitive and there are
companies have built up there is an increased risk new markets, such as many companies vying
strong brand recognition of health problems emerging economies and for the same customers.
over time. This can give associated with their developing countries. This can lead to price
them an edge in the consumption. This can This presents an wars and make it difficult
marketplace. lead to negative publicity opportunity for for companies to
and potential lawsuits. companies to capture succeed.
new customers and
increase their market
share.
3. Cost efficiency: The 3.High cost of 3. Innovation: The food 3. Consumer trends: The
food and beverage production: The cost of and beverage industry is tastes and preferences of
industry is typically able producing food and constantly evolving and consumers are constantly
to produce goods at a beverage products can be there is always the changing, which can
lower cost than many high, as there is often a potential for new make it difficult for
other industries. This need to purchase products and services to companies to stay ahead
allows them to maintain ingredients and be created. Companies of the curve and remain
 competitive prices and equipment in bulk. This that are able to innovate profitable.
offer value to their can drive up costs and and stay ahead of the
customers. make it difficult to competition can gain a
remain competitive. competitive advantage.

Main Competitors
Nestlé faces competition from a range of food and beverage companies, both large and small, such as
Procter & Gamble, Kraft Heinz, Coca-Cola, Unilever, Danone and PepsiCo. All of these companies
have a strong global presence and offer a variety of products. Other competitors include smaller,
regional food and beverage companies, such as General Mills and Kellogg’s. Nestlé also faces
competition from private label brands, which are growing in popularity in many markets. (Kabii, 2018)
Market Share
In terms of innovation and product development, Nestlé is well-positioned. The company is constantly
introducing new products and reformulating existing products to meet changing consumer tastes.
Nestlé is also investing in research and development to better understand consumer needs and develop
new products. In terms of marketing, Nestlé has a strong presence in traditional media, such as
television and radio, as well as digital media. The company has also been investing heavily in social
media, using platforms such as Twitter, Facebook, and YouTube to engage with consumers.
Nestlé has a strong presence in emerging markets, where it is expanding its operations and increasing
its market share. The company is investing heavily in these markets and is focusing on developing the
right products for each market. Nestlé is also focusing on sustainability initiatives, such as reducing
water usage and improving the sourcing of its raw materials. (Stanciu, 2021)
 Fig. 1. Coffee companies market share 2020
Source: DEALLAB. Market Share

Business Model and Mission

Nestlé’s business model is based on the principles of its founder, Henri Nestlé. It centers on the production of
high-quality food, beverages, and nutrition products. Nestlé strives to provide consumers with safe and healthy
food and beverages that contribute to their well-being. The company focuses on creating innovative products
that meet the changing needs of consumers by combining traditional ingredients with modern technologies.
Nestlé’s global presence and production network allow it to offer products to consumers in more than 150
countries. Nestlé’s model is also focused on continuous improvement. It has implemented a range of
initiatives to reduce its environmental impacts, increase efficiency, and improve product quality. It has also
invested heavily in research and development to create new products that can meet the needs of its
customers. Nestlé’s success is also due to its commitment to corporate social responsibility. The company has a
range of initiatives in place to ensure that its operations and products are ethically and sustainably produced.
(Nestle, 2015)
They source their ingredients ethically with a focus on quality and transparency. Nestlé also has a strong focus
on animal welfare, with clear policies in place to ensure humane treatment. For example, the company has
partnered with the Rainforest Alliance to ensure that its cocoa and coffee products are sourced from
sustainable and ethical sources. In addition, Nestlé has also established a Sustainable Agriculture
Program, which provides farmers with training and resources to help them produce high-quality
ingredients in an environmentally-friendly manner. (Nestlé, 2022)
Corporate Social Responsibility
The company also places strong emphasis on corporate social responsibility and community
engagement. Nestlé supports several community initiatives, including promoting nutrition education
and providing access to clean drinking water. The company also works to reduce its environmental
impact, by setting science-based targets to reduce greenhouse gas emissions and by investing in
renewable energy.
Overall, Nestlé is a prime example of a company that has successfully implemented a sustainable
strategy. By focusing on the entire supply chain, from raw materials to finished products, and by
engaging in corporate social responsibility initiatives, the company has been able to create value for its
stakeholders and contribute to a healthier future.
Nestlé's sustainability strategy starts with the sourcing of raw materials. The company has set up a
"farm-to-fork" system, which means that it buys directly from farmers and works with them on
efficient and sustainable practices. This includes activities like using natural fertilizers, crop rotation,
and soil conservation. It has invested in renewable energy sources such as biomass, solar, and wind
power, and has set a goal of reducing its energy use by 25% by 2020. Nestlé has also taken steps to
reduce its water usage. It has invested in technologies such as rainwater harvesting and wastewater
treatment, and has set a goal of reducing its wastewater by 50% by 2020. Finally, the company has
invested heavily in recycling and waste management. It has set a goal of achieving zero waste to
landfill by 2020, and has begun an ambitious program to collect and reuse all plastic packaging.
(Nestlé, 2020)
Corporate governance
Nestlé’s corporate governance system is based on the principles of transparency, accountability, integrity,
fairness and respect for the law. The company’s corporate governance system is designed to ensure that the
company’s management and board of directors are accountable to the company’s shareholders and other
stakeholders.
Nestle is a multinational food and beverage company that produces a wide range of products. The
company's product portfolio includes dairy products, beverages, confectionery, cereals, ice cream,
snacks, pet food, and infant nutrition. (Nestlé, 2022)
1. Dairy Products: Milk, Yogurt, Cheese, Cream, Butter, Egg-based products.
2. Beverages: Coffee, Tea, Juices, Protein Shakes, Soft Drinks, Water.
3. Confectionery: Chocolate, Biscuits, Pastries, Candy, Gum.
4. Cereals: Breakfast cereals, Oatmeal, Granola bars.
5. Ice Cream: Ice cream bars, Ice cream sandwiches, Frozen yogurt.
6. Snacks: Popcorn, Potato chips, Pretzels, Nuts.
7. Pet Food: Dry food, Wet food, Treats.
8. Infant Nutrition: Infant formula, Baby food, Cereal.
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