Introduction
Nestlé is a Swiss multinational food and beverage company, recognized as one of the largest food companies in the world. The company traces its origins to 1867 when German pharmacist Henri Nestlé developed a milk-based baby food named “Farine Lactée,” a nutritious, easily digestible infant cereal made from cow’s milk, wheat flour, and sugar. His product was aimed at addressing high infant mortality rates. When babies were dying of lack of enough breast milk there was no alternative to mother’s milk. Thus the Nestlé started its journey. The company initially focused on producing infant food. It has a strong presence in both developed and emerging markets and is known for its commitment to nutrition, health, and wellness. Nestlé began its journey in Bangladesh in 1992 with the help of Transcom Limited and Nestlé South Asia. Now it’s completely a part of Nestlé SA. Nestlé continues to innovate and adapt to changing consumer preferences and global market dynamics.
Business Description
During 2014 Nestlé was one of the world’s largest food and beverage food companies. It has almost 2000+ brands and a 10000+ product lineup. Nestlé has 447 factories, operates in 190 countries, and employs around 339,000 people. Nestlé SA annual revenue for 2023 was $103.98B. Nestlé Bangladesh PLC limited company’s factory is situated in Rajendrapur cantonment, Sreepur, Gazipur-1740, Bangladesh. The company operates its business in 7 several particular sections.
- Powder & Beverages: Products mainly include milk or coffee.
Nescafe
Nespresso
Milo
Nesquik
Nestea
2.Nutrition and Health : Products designed for infants, children, and adults, including baby food, medical nutrition, and supplements.
Cerelac
Lactogen
Boost
Gerber
3.Milk product and ice cream : Largest ice-cream company in the world.
Nido
Carnation
Coffe mate
Drumstick
Dreyer’s
4.Prepared Foods: Includes frozen and chilled foods, culinary aids, and prepared dishes .
- Maggi
- Chef.
5.Confectionery: 5th largest chocolate brand . Chocolate, candies, and snacks with brands like
- Kitkat
- Nestle
- Cailler
6.Pet Care: 2nd largest pet food made company.Pet food and pet care product mainly.
- Purina
7.Mineral water: Largest mineral water brand .
- Pure life
- Perrier.
Stage of business development
1.Early Stage : Around the same time, in 1866, the Anglo-Swiss Condensed Milk Company was founded by Americans Charles and George Page in Switzerland. They produced condensed milk.
2.Growth and Development: Both companies grew rapidly due to the increasing demand for their products. Nestlé’s infant cereal became popular across Europe, and the Anglo-Swiss Condensed Milk Company expanded its product line and geographic reach.
3.Merger: In 1905, the two companies merged to form the Nestlé and Anglo-Swiss Milk Company. This merger combined their strengths in milk-based products and expanded their market presence. The newly formed company continued to innovate and expand its product range.
4.Expansion and Diversification: After the merger, Nestlé diversified its product portfolio to include chocolate and other food items. The company established factories in the United States, Britain, Germany, and Spain, among other countries, to meet growing international demand.
5.World War I:World War I significantly impacted the company’s operations. Nestlé increased its production of dairy products to meet the demands of wartime Europe, which boosted its growth and cemented its position as a leading food manufacturer.
6.Global Expansion: After World War II, Nestlé accelerated its international expansion, opening factories and acquiring companies in various countries. The company entered new markets in Asia, Africa, and Latin America, adapting its products to local tastes and needs.
7.Product Diversification: Nestlé diversified its portfolio through acquisitions and internal development. It expanded into new categories such as frozen foods, pet foods, and bottled water.
8.Research and Development: Nestlé invested heavily in research and development to innovate and improve its products. This included advancements in nutrition, food safety, and convenience foods.
Marketing and advertising
Overall, Nestlé’s marketing and advertising strategies are adaptable, leveraging traditional and digital media, aligning with social causes, and continually innovating to meet consumer needs and preferences. This comprehensive approach has helped Nestlé maintain its position as a leading global food and beverage company.
Advertising Techniques
- Traditional advertising
- Digital marketing .
- Content marketing .
- Integrated marketing campaigns.
- Partnership and sponsorship
- Celebrity Endorsements .
- Sustainability initiatives.
- Health and wellness.
Financing
How the company managed it’s initial Fund?
Henri Nestlé, a pharmacist, invested his own resources into developing and marketing his infant cereal, “Farine Lactée.” This personal investment included funds for research and development, production, and marketing .
Different stage of funding
1.Earnings Reinvestment: Consistently reinvesting earnings into the business allowed Nestlé to fund its expansion into new markets and diversify its product portfolio without relying heavily on external financing.
2.Acquisitions: Nestlé strategically acquired other companies to broaden its product range and market presence. Notable acquisitions include:
In 1929 Peter & Kohler : A Swiss chocolate company, which helped Nestlé expand into the chocolate market.
In 1938, Nestlé introduced Nescafé, an instant coffee that became immensely popular worldwide.
In 1947 Nestlé acquires Maggi A culinary products company, enhancing Nestlé’s offerings in the prepare food sector.
In 1954 Nestlé rebranding the most popular cereal product Cerelac.
In 1960-70 Nestlé enter into frozen food and pharmaceuticals market .
In 1984 Nestlé buy Carnation evaporated Milk company. A leading dairy products company.
In 1985 Nestlé made pet food company named Friskies. And after merge with Purina.
Rowntree Mackintosh (1988): A major confectionery company, strengthening Nestlé’s position in the global chocolate market. Which made KitKat.
In 2001 Nestlé acquire Nestlé Purina pet care company.
In 2002 Nestlé merge with famous ice-cream brand Dreyer’s.
3. Financing strategy
Bank Loans and Credit Facilities :As Nestlé expanded, it utilized bank loans and credit facilities to finance its growth. Access to credit allowed the company to invest in new technologies, modernize production facilities, and expand its global footprint.
Issuance of Bonds: Nestlé has periodically issued bonds to raise capital for expansion and acquisitions. Bond issuance provides a way to secure long-term funding at favorable interest rates.
Equity Financing: Nestlé has occasionally raised capital through equity financing, issuing shares to investors.
In 1974 Nestle buy 30% stake of world’s no 1 cosmetic company L’Oréal.
Unique strategy of Nestlé
Nestlé markets its products by emphasizing health and wellness benefits. This includes reformulating products to reduce sugar, salt, and fat content and promoting healthier options . Nestlé adapts its marketing messages to local cultures and tastes. This balance produce consumer satisfaction and trust.
Business strategy of Nestlé
- Customer trust gain by produce Quality of food .
- Unmatched geographical presence.
- Unmatched product and brand portfolio.
- Unmatched research and development capability .
- Good relationship with employees.
- Always ensure food is local.
Key Success Factors
1.Innovation: Continuous investment in R&D and innovation has kept Nestlé at the forefront of the food and beverage industry.
2.Global Reach: Nestlé’s extensive global network allows it to tap into diverse markets and consumer bases.
3.Brand Portfolio: A strong and diversified brand portfolio helps Nestlé mitigate risks and capitalize on various market opportunities.
4.Adaptability: The ability to adapt to changing market conditions and consumer preferences has been crucial to Nestlé’s longevity and success.
5.Sustainability and CSR: Nestlé’s commitment to sustainability and corporate social responsibility enhances its brand reputation and aligns with consumer values.
Challenged Faced by the company
In 1980 – Baby milk controversy – in underdevelopment country mother don’t feed their Brest milk . Aggressively marketing Brest milk substitute product that’s why this problem was created.
In 2000 – Child labor controversy for coco powder production in underdeveloped country .
Future plan
Nestlé’s future plans are driven by its commitment to growth, sustainability, innovation, and consumer health. The company’s strategy focuses on several key areas.
1.Net Zero Emissions: Nestlé aims to achieve net zero greenhouse gas emissions by 2050.
2.Sustainable Packaging: The company is committed to making 100% of its packaging recyclable or reusable by 2025. This includes reducing plastic usage and investing in alternative packaging materials.
Financial Goals
1.Revenue Growth: Aiming for steady and sustainable revenue growth through a combination of organic growth, strategic acquisitions, and innovation.
2.Profitability: Maintaining strong profitability by optimizing costs, improving operational efficiency, and focusing on high-margin products and markets.
By focusing on these strategic areas, Nestlé aims to sustain its position as a global leader in the food and beverage industry while addressing environmental, social, and economic challenges.
Conclusion
Nestlé Limited exemplifies the core values and strategic vision of its parent company, Nestlé S.A. By focusing on innovation, sustainability, market expansion, and social responsibility. Nestlé Limited is well-positioned to navigate the challenges and opportunities in the dynamic food and beverage industry. Its ongoing commitment to excellence and adaptation to changing market dynamics ensures that it remains a trusted and influential player in the global market.