Nestlé
Webpages concerning "Nestlé"
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Wikipedia-Article "Nestlé"
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| Type | Public (SWX:NESN) |
|---|---|
| Founded | Vevey, Switzerland (1866) |
| Location | Vevey, Switzerland |
| Key people | Henri Nestlé, Founder Peter Brabeck-Letmathe, Chairman & CEO |
| Industry | Food processing |
| Products | Baby food, Dairy products, Breakfast cereals, Confectionery, Bottled water, more... |
| Revenue |  86.7 billion CHF (2004) [2] |
| Operating income | {{{operating_income}}} |
| Net income | {{{net_income}}} |
| Employees | 253,000 (2003) |
| Website | www.nestle.com |
| {{{footnotes}}} | |
Nestlé S.A. or Société des Produits Nestlé S.A., headquartered in Vevey, Switzerland, is the world's biggest food and beverage company. Nestlé's existing products extend from mineral waters to baby food to coffee and dairy products. Some of Nestlé's business practices have proved controversial, in particular the manner in which baby milk has been marketed in developing countries, which led to the Nestlé boycott.
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History
Nestlé was founded in 1866.
In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to be breastfed. His first success was a premature infant who could not tolerate his own mother's milk or any of the usual substitutes. The value of the new product was quickly recognized when his new formula saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe.
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, United Kingdom, Germany and Spain. World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestlé's production had more than doubled.
After the war, government contracts dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the company's second most important activity.
Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the company's newest product, Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974. In 1977, Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc.
In 1984, Nestlé's improved bottom line allowed the company to launch a new round of acquisitions, the most important being American food giant Carnation.
The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a $2.6 bn acquisition was announced of Chef America, Inc. Nestle recently opposed a Swiss ban on genetically modified organisms. [3]
Business
Management
The executive board, a distinct entity from the board of directors, includes:
- Peter Brabeck-Letmathe, Chairman & CEO
- Carlo Donati, EVP, Chairman, and CEO of Nestlé Waters
- Frits van Dijk, EVP of Asia, Oceania, Africa, Middle East divisions
- Ed Marra, EVP of Strategic Business Units and Marketing
- Francisco Castañer, EVP of Pharmaceutical and Cosmetic Products, Liaison with L'Oréal, Human Resources
- Paul Bulcke, EVP of Americas divisions
- Wolfgang H. Reichenberger, EVP of Finance
- Chris Johnson, Deputy EVP of Information System and Logistics
- Lars Olofsson, EVP of Europe divisions
- Luis Cantarell, Deputy EVP of Nutrition Strategic Business units
- Werner J. Bauer, EVP of Research and Development
Current members of the board of directors of Nestlé are: Günter Blobel, Peter Böckli, Daniel Borel, Peter Brabeck-Letmathe, Edward George, Rolf Hänggi, Nobuyuki Idei, Andreas Koopmann, Andre Kudelski, Jean Pierre Meyers, Carolina Müller-Möhl, Kaspar Villiger.
Earnings
In 2003, consolidated sales was CHF 87.979 bn and net profit was CHF 6.213 bn. Research and development investment was CHF 1.205 bn.
- Sales by activity breakdown: 27% from drinks, 26% from milk and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products, 6% from pharmaceutical products.
- Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world.
Joint ventures and minority interests
Nestlé holds 26.4% of the shares of L'Oréal, the world's leading company in cosmetics and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between Nestlé and L'Oréal . Galderma is another joint veture in dermatology between Nestlé and L'Oréal. Others include Cereal Partners Worldwide, Beverage Partners Worldwide (formerly CCNR), and Dairy Partners Americas.
Criticisms of Nestlé's business practices
Baby milk marketing
See also: Nestlé boycott and International Code of Marketing of Breast-milk Substitutes
Since the late 1970s, Nestlé has attracted much criticism for its baby milk marketing policies in developing countries. This has centered on its apparent recommendations for nursing mothers to switch to its infant formula milk products, leading to the alleged deaths of about 1.5 million babies each year as a result of formula being mixed with contaminated water. Nestlé allegedly has violated and regularly continued to violate the widely agreed-upon International Code of Marketing of Breast-milk Substitutes. This has led to a boycott coordinated by the International Nestlé Boycott Committee, informed by monitoring conducted by the International Baby Food Action Network. However, all allegations are investigated and where substantiated are corrected. In 1982, Nestlé implemented the WHO Code of Marketing of Breast-Milk Substitutes in developing countries. The instructions were reviewed and refined in 1984 in consultation with the WHO, UNICEF and the International Nestlé Boycott Committee.
Nestlé itself still advertises breast milk replacements, and does use pictures of babies in its advertising. According to the report "Breaking the Rules, Stretching the Rules 2004" put out by IBFAN/ICDC it is still continuing agressive and misleading advertising tactics. Nestle also refuses to comply with the International Code. The boycott still continues in some 20 countries.
Legal action against Ethiopian government
In December 2002, international aid agency Oxfam revealed that Nestlé was demanding millions of dollars in compensation from Ethiopia – one of the poorest countries in the world which was at the time in the midst of an extreme drought that put over 11 million people at risk for starvation. The $6 million demand was issued for shares in an Ethiopian agricultural firm, which was nationalised by the Marxist Mengistu regime in 1975. Nestlé had acquired ELIDCO’s parent company, the Schweisfurth Group, ten years later. Nestlé refused the embattled Ethiopian government’s offer of a settlement worth around $1.5m; however, in the face of much public criticism, a statement was issued by Nestlé on December 23, 2002 stating that any money received in settlement would be made available for famine relief projects in the region in consultation with the International Federation of Red Cross / Red Crescent Societies.
Nestlé Purina in Venezuela
In early 2005, Nestlé Purina sold thousands of tons of contaminated animal food in Venezuela. The local brands included Dog Chow, Cat Chow, Puppy Chow, Fiel, Friskies, Gatsy, K-Nina, Nutriperro, Perrarina and Pajarina. Over 500 dogs, cats, birds and cattle died. It was reported that it was caused by a supplier that had stored corn used in animal food production incorrectly, which led to a proliferation of a fungus with a high quantity of aflatoxin causing hepatic problems in the animals that ate the food.
On March 3, 2005, the National Assembly (Venezuela's federal legislature) stated that the company Nestlé Purina was responsible for the quality standards and that compensation must be paid to the owners of the affected animals.
Nestlé Water
In Mecosta County, Michigan, United States, a determined citizen coalition has opposed the efforts of a bottled water subsidiary of the Nestlé corporation to gain private control of important groundwater supplies. In 2001, the county licensed the company (then a Perrier subsidiary) to open a bottling plant in Stanwood, Michigan, for a fee of less than $100 a year. Almost before anyone knew about it, the company was pumping half a million gallons of water a day from an aquifer beneath a hunting reserve. After learning about the plan, Michigan Citizens for Water Conservation launched a direct action campaign against Nestle and sought a temporary injunction to stop the pumps while the court decided on the legality of Nestle's use of the water. The injunction has yet to be granted.
'Fairtrade' coffee
Partners Blend coffee, launched by Nestlé during 2005, has obtained Fairtrade labelling status, although this decision has been dismissed as a "Big Joke" by an un-named Colombian trade union activist [4]. Babymilk Action have also condemned this development [5].
Main brands
Nestlé have a wide range of products across a number of markets including coffee, water, other beverages, ice cream, infant foods, performance and healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and pet food.
For a list of some of these brands, see List of Nestlé brands.
See also
External links
- Official website of Nestlé
- Article on ownership structure of Nestlé and L'Oréal
- Nestlé's website setting out the facts on the babymilk issue
- Pamphlet "The Baby Killer" 1974
- Blog dedicated to the Venezuelan Nestlé Purina incident (Spanish)