Nestle

Nestlé S.A. Nestlé Société Anonyme is a Swiss multinational corporation, the world's largest food producer. The company is headquartered in Vevey, Switzerland. Vevey).

Nestlé produces instant coffee, mineral water, chocolate, ice cream, broths, dairy products, baby food, pet food. The main trademarks are KitKat, Maggi, Nescafe, Nesquik, Nestea, Friskies, Purina. He owns a 20% stake in the cosmetics company L'Oréal. The main market for products is the United States, which accounts for a little less than a third of the company's turnover.

The company has been the subject of various controversies, criticisms, and boycotts over its marketing of infant formula as an alternative to breastfeeding in developing countries, the use of child labor in cocoa production, and the production and promotion of bottled water.

History

Establishment of the company
One of the company's two main predecessors, the Anglo-Swiss Condensed Milk Company, was founded in 1866 in Hama (canton of Zug) by the American consul in Switzerland, Charles Page, and his brother George. The company began the production of condensed milk using a technology developed 12 years earlier by the American Gail Borden. In 1872, the company opened a factory in England, its main market.

In 1867, the Swiss pharmacist Henri Nestlé began selling Henri Nestlé's Milk Flour. Farine Lactée Henri Nestlé), a mixture of cow's milk, wheat flour and sugar, which was used to artificially feed infants who did not receive mother's milk. By 1873, his factory in Vevey was producing 2,000 cans of the mixture a day, but this was not enough to fulfill orders, and in 1874 Nestlé sold his business for 1 million francs to the Swiss politician Jules Monnerat, who began expanding production. Beginning in the late 1870s, a competition began between Anglo-Swiss and Nestlé: the former launched the production of baby food, and the latter responded by starting the production of condensed milk. Both companies expanded to other countries in Europe and the United States.

In 1905, the Anglo-Swiss Condensed Milk Company and Nestlé merged; at that time they had 7 factories in Switzerland, 6 in the UK, 3 in Norway, one each in the USA, Germany and Spain. In 1906, the Cressbrook Dairy Company was bought in Australia (its second largest export market), and by 1920 three more companies had been purchased. During the First World War, the company received large government orders for its products, but at the same time experienced interruptions in raw materials, so several enterprises were bought in the United States and other countries where hostilities did not take place. By 1917, the number of the company's factories had reached 40, and in 1918 the production volume was twice as high as in 1914. In 1920, the first factory was opened in Latin America (Araras, Brazil).

In 1921, the number of the company's enterprises reached 80, but this year was the first that Nestlé ended with a loss. In 1928, one of the largest chocolate producers, the Swiss company Peter, Cailler, Kohler, Chocolats Suisses S.A. with 13 factories in Europe, South America and Australia, was absorbed. The company continued to grow during the Great Depression, expanding its presence in the Americas, Europe, and Asia; at the same time, several businesses were closed, including the two oldest factories in Hama and Vevey. In the second half of the 1930s, two holding companies were established: Nestlé and Anglo-Swiss Holding Company Ltd. in Switzerland and Unilac Inc. in Panama.

In 1930, the Brazilian Coffee Institute asked the company's management to help develop new types of products that could solve the problems of marketing surplus coffee in Brazil. The result of eight years of research was the Nescafé instant coffee, which began production in 1938 in Switzerland and was launched on the US market in 1939. In the early 1940s, the company began producing Nestea instant tea.

With the outbreak of World War II, most of the headquarters personnel were transferred to Stamford, Connecticut, from where they directed international operations until 1945. During the war years, Nestlé's sales grew from $100 million to $225 million, including in the United States from $14 million to $60 million. To a large extent, this growth was due to the supply of the armies of the belligerent countries on both sides of the front.

In the post-war years, a period of major takeovers began. The first of these, in 1947, was Alimentana S.A., a manufacturer of condiments, soup concentrates and bouillon cubes Maggi; the combined company was called Nestlé Alimentana SA. In 1950, the British canned food manufacturer Crosse and Blackwell was bought. Scandinavian frozen food manufacturer Findus was bought in 1963. In 1966, a technology for the production of dried frozen concentrates (lyophilization) was developed, the first product using this technology was freeze-dried coffee under the delirium of Taster's Choice. In the 1970s, the sphere of interest continued to expand: in 1971 it bought the American juice manufacturer Libby, in 1973 the frozen ready meal company Stouffer's, and in 1974 a large stake in the French cosmetics company L'Oréal. In 1977, it bought the Texas-based pharmaceutical company Alcon Laboratories, and two years later, contact lens manufacturer Burton, Parsons and Company Inc.

In 1979, Nestlé S.A. became the official name of the company, by which time a significant part of the company's activities were in developing countries, where 80 of Nestlé's 303 enterprises were located. In many developing countries, the company actively promoted its baby food, which was often used incorrectly (diluted with dirty water, not enough powder, etc.). In response to this aggressive marketing, Nestlé was boycotted in the U.S., Europe and elsewhere from 1977 to the early 1980s, costing the company about $40 million. In 1985, the American company Carnation, a manufacturer of dairy products and animal feed Friskies, was bought for $3 billion; In the same year, the third largest coffee producer in the United States, Hills Brothers, was acquired. In 1986, a subsidiary, Nespresso, was established to produce ground coffee capsules. In 1988, the largest chocolate manufacturer in the UK, Rowntree Mackintosh Confectionery, was bought for £2.55 billion and included the brands KitKat, Rolo, Smarties and Aero. In the same year, the Italian pasta manufacturer Buitoni was bought. In 1991, 31 acquisitions were made, in particular, Nestlé entered the markets of China and Eastern Europe. In September 1991, a joint venture was formed with The Coca-Cola Company, called the Coca-Cola Nestlé Refreshment Company, to produce ready-made coffee and tea drinks. In 1992, the French mineral water producer Source Perrier was bought for $2.3 billion, and another water bottler, Vittel, was also acquired. In the second half of the 1990s, mineral water, ice cream, and pet food became the main areas of development.

At the beginning of the 21st century, the company had about 500 factories in 78 countries, with a turnover of 70 billion Swiss francs. The brand portfolio consisted of 8,500 items, the structure of Nestlé was decentralized, branches in different countries could adapt the range of products to local tastes; Nescafé alone had about 200 variations. However, at the beginning of the century, a reorganization began, individual countries were united into regions, and the number of brands and their variations was reduced. The largest acquisition at the turn of the century was animal feed manufacturer Ralston Purina in 2002 for $10.3 billion; In this market, Nestlé equaled the world leader, Mars, in terms of sales.

In December 2005, Nestlé acquired the Greek company Delta Ice Cream for €240 million, and in January 2006, it took full ownership of Dreyer's. This allowed Nestlé to become the largest ice cream producer in the world, controlling 17.5% of the market.

In November 2006, Nestlé acquired the Medical Nutrition division from Novartis Pharmaceutical for $2.5 billion, and in April 2007, Nestlé bought baby food manufacturer Gerber for $5.5 billion. In 2010, Alcon was sold, and the Swiss pharmaceutical group Novartis paid about $40 billion for it. Also in 2010, a subsidiary, Nestlé Health Science, was founded to develop foods with medicinal properties.

Further acquisitions include a 60 percent stake in Chinese snack maker Hsu Fu Chi International Ltd. (in July 2011 for S$1.7 billion), Pfizer's baby food division (in April 2012 for $11.9 billion), and a majority stake in U.S. coffee maker Blue Bottle (in September 2017 for $425 million).

In January 2018, the American part of the confectionery division was sold, it was bought by the Italian company Ferrero for $2.8 billion. In May 2018, a $7.15 billion deal was struck with the American company Starbucks, giving Nestlé the right to sell coffee under the Starbucks brand worldwide.

In 2021, most of the brands of the American The Bountiful Company were bought for $5.75 billion; these brands (Nature's Bounty, Solgar, Osteo Bi-Flex, and Puritan's Pride) produce vitamins and supplements.

Owners and management

Nestlé issued 2.67 billion shares with a par value of 0.1 Swiss francs each. Their total value (market capitalization) as of November 2023 was CHF 265 billion (USD 297 billion). The company's shares are traded on the Swiss Stock Exchange, while American Depositary Receipts are traded on the OTC Markets Group's over-the-counter market. The bulk of the share capital is held by investors from Switzerland (37%) and the United States (33%), followed by the United Kingdom (6%), Germany (5%), and Canada (3%). Among the largest shareholders as of 2023 were The Vanguard Group (3.50%), Norwegian State Pension Fund (2.92%), Capital Research & Management Co. (1.85%), BlackRock Fund Advisors (1.67%), UBS Asset Management Switzerland (1.43%), Credit Suisse Asset Management (Schweiz) (1.32%), Zürcher Kantonalbank (1.06%); Treasury shares accounted for 3,066%.

Peter Brabeck-Letmathe was Chairman Emeritus and Chairman of the Board of Directors from 2008 to April 2017. Born in 1944 in Austria. Joined Nestlé in 1968. From 1997 to 2008, he served as Chief Executive Officer (CEO). He is also Vice Chairman of L'Oréal S.A., Vice Chairman of the Board of Directors of Credit Suisse Group and a member of the Board of Exxon Mobil Corporation. In addition, he is Chairman of the Water Resources Group (WRG), a member of the European Industrialists Roundtable and the World Economic Forum. Peter Brabeck-Letmate drew considerable criticism when he remarked in a 2005 interview that water resources should be privatized because he believed that the availability of cheap water led to its unsustainable use.

Paul Bulcke has been Chairman of the Board since April 2017, and Chief Executive Officer from 2008 to 2016. Born in 1954 in Belgium. Joined Nestlé in 1979. He is also a member of the Board of Directors of Roche Holding Ltd. and L'Oreal S.A..

Ulf Mark Schneider has been Chief Executive Officer since the beginning of 2017. Prior to that, since 2003, he held a similar position at Fresenius Group.

Other members of the Board of Directors:

Henri de Castries has been Vice Chairman and Lead Independent Member of the Board of Directors since 2012, having previously chaired the French insurance company AXA for 20 years, and is also a member of the Board of Directors of HSBC Holdings.
Pablo Isla has been an independent member of the Board of Directors since 2018, and since 2011 he has been Chairman of the Board of Directors and CEO of the Spanish company Inditex.
Renato Fassbind has been an independent member of the Board of Directors since 2015; From 2004 to 2010, he was Chief Financial Officer of Credit Suisse Group AG; also Vice Chairman of Swiss Re AG and member of the Board of Directors of Kuehne + Nagel International AG.
Eva Cheng has been an independent board member since 2013 and previously held senior positions at Trinity and Amway.
Patrick Aebischer has been an independent member of the Board of Directors since 2015 and was President of the Swiss Federal Polytechnic Institute in Lausanne from 2000 to 2016; He is also a member of the Board of Directors of the Lonza Group.
Kimberly A. Ross has been an independent member of the Board of Directors since 2018; Prior to that, she was Chief Financial Officer of Baker Hughes (2014-2017) and Avon Products (2011-2014).
Dick Boer has been an independent member of the board of directors since 2019, and from 2011 to 2018 he headed the supermarket chain Ahold Delhaize.
Dinesh Paliwal has been an independent member of the Board of Directors since 2019, and is also a partner at Kohlberg Kravis Roberts, and previously headed Harman International Industries from 2007 to 2020.
Hanne Jimenez de Mora has been an independent member of the Board of Directors since 2020 and is the founder and chairman of the consulting company a-connect (group) AG.
Lindiwe Majele Sibanda has been an independent member of the Board of Directors since 2021 and a professor at the University of Pretoria.
Luca Maestri has been an independent member of the Board of Directors since 2022 and is Apple's Chief Financial Officer.
Chris Leong has been an independent member of the Board of Directors since 2022 and Chief Marketing Officer of Schneider Electric.