Why Nestlé Business Model Is Mostly About The Powder

Nestlé is a powerhouse of consumer brands spanning across baby foods, bottled waters, powdered drinks, cereals, coffee, drinks, pet-care, and more. The company made almost $92 billion in 2018, with high margins on its powdered and liquid beverages (coffee, cocoa, and malt beverages and tea categories).

nestle-financials

While many people might not relate directly with Nestlé as a brand, billions of people across the world relate to the brands it owns. You might be surprised by the portfolio of brands that Nestlé has, spanning across baby foods to pet care.

Nestlé origin story

Nestlé history dates back to the late 1860s when Anglo-Swiss Condensed Milk Company was founded. Henri Nestlé, the founder, worked out an instant formula powdered milk product, which would become the core product of the company.

By 1905 from a merger with Anglo-Swiss would form the Nestlé Group. Ever since the company managed to successfully pass two World-Wars and several economic crises.

What brands does the company own?

A powerhouse of consumer brands

Although not many might relate directly to the Nestlé brand, in many countries around the world, most people can relate to the portfolio of brands owned by the company, which span across baby foods to pet care.

Baby foods brands

nestle-baby-foods

Nestlé Brand Website

Nestlé baby foods brands comprise:

  • Cerelac.
  • Gerber.
  • Gerber Graduates.
  • NaturNes.
  • Nestum.

Bottled water brands

nestle-waters

Nestlé Brand Website

Nestlé water brands comprise:

  • Nestlé Pure Life.
  • Perrier.
  • Poland Spring.
  • S.Pellegrino.

Cereals brands

Nestlé Brand Website

Nestlé cereal brands comprise:

  • Chocapic. 
  • Cini Minis.
  • Cookie Crisp.
  • Estrelitas.
  • Fitness.
  • Nesquik Cereal.

Chocolate & confectionery brands

Nestlé Brand Website

Nestlé chocolate and confectionery brands comprise:

  • Aero.
  • Cailler.
  • KitKat. 
  • Milkybar.
  • Nestlé Les Recettes de l’Atelier. 
  • Orion.
  • Quality Street.
  • Smarties.
  • Toll House.

Coffee brands

Nestlé Brand Website

Nestlé coffee brands comprise:

  • Nescafé.
  • Nescafé 3 in 1.
  • Nescafé Cappuccino. 
  • Nescafé Classic.
  • Nescafé Decaff.
  • Nescafé Dolce Gusto.
  • Nescafé Gold.
  • Nespresso.

Culinary, chilled and frozen food

Nestlé culinary brands comprise:

  • Buitoni.
  • Herta.
  • Hot Pockets.
  • Lean Cuisine.
  • Maggi.
  • Stouffer’s.
  • Thomy.

Dairy

Nestlé Brand Website

Diary brands comprise:

  • Carnation.
  • Coffee-Mate.
  • La Laitière. 
  • Nido.

Drinks

Nestlé Brand Website

Drinks brands comprise:

  • Milo. 
  • Nesquik.
  • Nestea.

Food service

Nestlé Brand Website

Food service brands comprise:

  • Chef.
  • Chef-Mate.
  • Maggi.
  • Milo.
  • Minor’s.
  • Nescafé.
  • Nestea. 
  • Sjora. 
  • Lean Cuisine. 
  • Stouffer’s.

Healthcare nutrition

Nestlé Brand Website

Healthcare brands comprise:

  • Boost. 
  • Nutren Junior. 
  • Peptamen. 
  • Resource.

Ice cream

Nestlé Brand Website

Ice cream brands comprise:

  • Dreyer’s. 
  • Extrême.
  • Häagen-Dazs. 
  • Mövenpick.
  • Nestlé Ice Cream.

Petcare

Nestlé Brand Website

Petcare brands comprise:

  • Alpo.
  • Bakers Complete.
  • Beneful.
  • Cat Chow.
  • Chef Michael’s Canine Creations.
  • Dog Chow.
  • Fancy Feast. 
  • Felix.
  • Friskies.
  • Gourmet. 
  • Purina. 
  • Purina ONE.
  • Pro Plan.

A business model still, in part, powered by powder

nesté-revenues-by-product-category

Source: Nestlé Annual Report 2018

As highlighted in its financial statements:

Powdered and Liquid Beverages covers our coffee, cocoa and malt beverages and tea categories. This business features some of our most iconic brands, such as: Nescafé, the world’s favorite coffee brand; Nespresso, our premium coffee experience; and Milo, the world’s most popular chocolate malt drink

What’s next for Nestlé?

Nestlé business strategy

As the ‘Good Food, Good Life’ company, we enhance quality of life and contribute to a healthier future. Winning with consumers is the source of our sustainable financial performance and our way to earning trust and maintain our market leadership. Based on a compelling Nutrition, Health and Wellness strategy, our company delivers sustainable value over the short term and the long term.

That is how Nestlé highlights its strategy, by emphasizing how it moves around three key points:

  • Increasing growth through innovation, differentiation and by being relevant to our consumers. We have committed to reach mid single-digit organic growth by 2020.

  • Improving operational efficiency with the goal to increase our underlying trading operating profit margin to between 17.5% and 18.5% (from 16.0% in 2016), and

  • Allocating our resources and capital with discipline and clear priorities, including through acquisitions and divestitures.

In short, Nestlé focuses on generating demand for its current brands, while improving its operational efficiency, and by allocating massive amounts of capital to buy and sell relevant consumer brands, which help the company to keep its dominance in the consumer food and beverage industry.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which he brought to reach about a million business students, professionals, and entrepreneurs in 2019 alone | Gennaro is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate and become profitable | Gennaro is an International MBA with emphasis on Corporate Finance | Subscribe to the FourWeekMBA Newsletter | Or Get in touch with Gennaro here

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