The Story Of: Nestlé

Originally Published: July 26, 2019

Nestle has been the largest food company in the world by several metrics since 2014. 

Making everything from Purina to Kit-Kat, Even L’Oreal. 

And being the product of two Swiss companies in the 1860’s, this is

The Story Of: Nestlé.

Like I said, the company originates from two separate Swiss companies in the 1860s. Though they weren’t the same company at first, for some time they competed aggressively, spreading across Europe and the U.S. 

In 1866, Charles and George Page, the former of which was the U.S. consul to Switzerland, the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Which later expanded into Britain in 1873.

And finally, Henri Nestle comes into the picture in Vevey in 1867, when he developed a milk-based baby food and began marketing it.

And the following year the milk chocolate manufacturing process was beginning to be perfected by Danie Peter. Though he was having trouble with the process, not being able to separate the water from the milk  mixed with the chocolate, preventing the product from developing mildew. Though, Nestle proved an important co-operation in solving this problem. And even when Henri retired from his company in 1875, it still retained his name, called itself Société Farine Lactée Henri Nestlé.

Later, in 1877, the Anglo-Swiss company began selling Milk-Based baby food, similar to what Nestle sold. And Nestle began the sale of Condensed Milk, making the two direct competitors in two fields.

And two years later, in 1879, Nestle had merged with Daniel Peter, described as the inventor of chocolate milk.

In 1904, 4 people, Daniel Peter, Charles Amédée Kohler, François-Louis Cailler and Henri Nestle all worked together and participated in the development of swiss chocolate. Milk Nestlé.

The next year, Anglo-Swiss and Nestlé merged, creating the merged company called The Nestlé and Andglo-Swiss Condensed Milk Company, and it retained that name until 1947, changing to the shorter, yet harder to pronounce name, Nestlé Alimentana SA. They changed the name due to the purchase of Fabrique de Produits Maggi SA, and its holding company, Alimentana SA. Maggi was a large manufacturer of soups and other general food.

Though, in 1977, Nestlé Alimentana SA became Nestlé SA.

Rolling back to the early 1900s, by then the company had already had many factories in the U.S., U.K., Germany and Spain. And their business was helped by WWI, when dairy products, like what Nestlé was producing, were in higher demand. And much of their production in this time actually went directly to the governments, due to contracts for the production of dairy products. Doubling their production by the end of the war.

A quick note is that it took until the 1920s for Nestlé to move away from chocolate, with it taking until then to make chocolate production their secondary focus.

Though, WWII didn’t go so well for Nestlé. In 1938 the company was making $20 million US, but the next year, in 1939, that dropped to $6 million US. Though Nestlé learned to recover, opening factories in latin america, and other relatively underdeveloped countries. This lead to their coffee, Nescafé, becoming a staple of the U.S. military and they began to recover in the wartime economy.

And while the end of the war hit them a small amount, with government contracts no longer being given, and citizens switching away from Nestlé products, they reacted quickly. Making moves to reduce debt and streamline operations.

And these would seem successful as the postwar years would prove good ones to Nestlé, as growth accelerated and they acquired many companies. These included the previously mentioned Maggi, Blackwell in 1950, Findus in 1963, Libbys in 1971 and Stouffer’s in 1973.

And some diversification away from food came in 1974, when a new Chairman and CEO, Pierre Liotard-Vogt. Who had shares in L’Oreal. As well as the purchase of Alcon Laboratories Inc. in 1977.

And the 1980s were also a good time for them. Their bottom line improved, allowing the company to go on another buying spree. Carnation in 1984, which included evaporated milk (sometimes known as unsweetened condensed milk), Coffee-Mate, and Friskies. In 1986, Nestlé made Nespresso its own operating unit, called Nestlé Nespresso S.A. and in 1988, Nestle acquired Rowntree Mackintosh, which owned brands such as Kit Kat, Smarties, and Aero.

And the ball keeps rolling in the 90’s. As worldwide trade became common and easy, Nestlé was able to expand even further. And with it came a new wave of purchases from 1996 to 2002. San Pellegrino and D’Onofrio in 1997, Spillers Petfoods in 1998, and Ralston Purina in 2002. There were also two major mergers in 2002, with Nestlé merging its U.S. Ice Cream division into Dreyer’s, as well as Chef America, who owned Hot Pockets. They also attempted to buy Hershey’s, but were unsuccessful. 

Though this didn’t stop Nestlé. For they bought Delta Ice Cream, a greek company, in 2005. As well as taking full ownership of Dreyers in 2006. This made them the single largest ice cream maker in the world, with a 17.5% market share. They also bought  the Medical Nutrition division of Novartis Pharmaceutical, as well as Ovaltine, the nutritional supplementary lines, Boost and Resource, and Optifast, which made Dieting products.

2007, Nestle bought Gerber, as well as entering a partnership with Pierre Marcolini.

And while they lost Alcon to Novataris in 2010, (I’ll need to put links to all these companies at the end because explaining what they are would nearly double this.) they gained the U.S. pizza division of Kraft Foods.

And despite buying a pizza brand, Nestlé has been trying to market itself as a “health and wellness company” probably due to the dropping sales of their other foodstuffs, and increasing government regulations.

And in order to prove that they’re dedicated to this, the company has founded “The Nestlé Institute of Health Sciences.” The goal of the institute is apparently to develop “a new industry between food and pharmaceuticals” (you never think about how long that word is)

They plan to do this by making food that is, in short, a replacement for pharmaceutical drugs. Though I haven’t looked into it much, it seems like they’ve already made protein shakes in order to combat malnutrition, diabetes, digestive health, obesity, and a bit more. 

And back to the purchases with Hsu Fu Chi International in 2011, and the infant-nutrition brand of Pfizer Inc., formerly Wyeth Nutrition.

And 2012 to now has seen a lot of developments I won’t go over here. Though I will link to it for anyone who does. But some highlights are many purchases, both by Nestlé SA, and their Health Science division, the most recent as of writing was 2017, when they purchased Sweet Earth, which produces Plant-Based foods. As well as an agreement with Starbucks to sell Starbucks worldwide via Nestlé.