Nestlé is the world's biggest food manufacturer, with almost 450 factories spread across the globe, and a portfolio that ranges from baby foods to pet care, from chocolate to mineral water, from coffee to frozen pizza. Its world-famous brands include Nescafé, Kit Kat, Maggi, Purina and Perrier, among many others. The group also controls a large investment shareholding in cosmetics company L'Oreal. Nestlé bulked up in the 1980s, 1990s and early 2000s with a series of substantial acquisitions. Yet several of these enlarged divisions failed to deliver the results anticipated, and the group's overall growth slowed dramatically after 2012 to its lowest level in years as a result of fierce competition from faster-moving niche food and beverage brands. That led to a dramatic change of strategy. Recent years have seen a greater concentration on higher margin operations, and several lower-growth divisions have been divested, either globally or regionally. Among the more notable disposals have been the group's once-worldbeating ice cream division (spun off into Froneri, a joint venture with private equity partners), its US confectionery business (sold to Ferrero in 2019), and its locally sourced US bottled water brands (sold to private equity in 2021). At the same time, in keeping with its over-arching health and wellness positioning, the group has pivoted heavily towards what it calls health science with a series of pharmaceutical acquisitions. Yet some long-established core businesses remain. Beverages, especially instant coffee and bottled water, remain Nestlé's single biggest division with a global footprint. Infant nutrition - the sector where Nestlé first began - is another pillar, enhanced with the purchase of Gerber and Wyeth, and expanded into adult nutrition. Another pillar of the business is pet foods, where Nestlé Purina is now one of the two world leaders. However, the group's presence in prepared foods and culinary aids has been scaled back slightly, as has its confectionery portfolio. Group revenues for 2020 came in at approx €77.93bn (SFr 84.3bn) with net income of approx €11.4bn (SFr 12.4bn). The US is the group's single biggest market, accounting for almost 31% of revenues, much of it from pet foods in which it is the local leader. Some way behind is China (at 7%), followed by France (5%), and then the UK, Brazil, Phillippines, Mexico and Germany (all around 3%). Mark Schneider, previously head of medical products group Fresenius, succeeded Paul Bulcke as CEO in 2016.
Capsule checked 12th November 2020
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Historical profile information for Nestlé
Adbrands Daily Update 12th Nov 2020: Nestlé's top marketer Patrice Bula is to retire in March 2021 after more than four decades with the group. He will be succeeded as EVP & head of strategic business units, marketing & sales by Bernard Meunier, currently Head of Nestlé Purina Petcare EMEA. Like his predecessor, Meunier is a Nestlé lifer, having spent 35 years with the company already.
Adbrands Daily Update 31st Aug 2020: Nestlé expanded its Health Science division even further with a deal to acquire the 74% of equity it doesn't already own in US biotech developer Aimmune for a total enterprise value of $2.6bn. It had already purchased an initial stake in Aimmune in 2016. The target's key product is Palforzia, the only FDA-approved treatment for severe peanut allergy. Aimmune is also working on a number of other food allergy treatments.
Adbrands Daily Update 18th Aug 2020: Nestlé further expanded its increasingly dominant position in health nutrition with an agreement to acquire US firm IM Health Science for an undisclosed sum. The target manages a portfolio of specialist or consumer products including IBgard and FDgard for the management of IBS and functional dyspepsia, fibre supplement Fiber Choice (acquired by IM in 2017) and sleep aid REMfresh. It is already Nestlé's 4th health science acquisition this year, following in the wake of Vital Proteins, Zenpep and LivingMatrix.
Adbrands Daily Update 27th Feb 2020: Nestlé has instructed 290,000 employees worldwide to suspend all international business travel plans for at least two weeks to avoid the possibility of spreading Coronavirus. It said even domestic travel should be postponed if possible. Although several companies have instructed staff not to visit infected regions, Nestlé is the first multinational company to cancel all international travel.
Adbrands Daily Update 28th Jan 2020: Nestlé is dipping a toe back into prescription medicines for the first time since offloading skin health division Galderma. It has agreed to acquire two gastro drugs, Zenpep and Viokace, from Allergan. These medications are pancreatic enzyme replacement therapies for people who have trouble digesting fat, protein, and carbohydrates. They will join Nestlé's medical nutrition division alongside Boost, Resource and other products. For Allergan, the sale is a key step in resolving regulatory objections to its takeover by Abbvie, which already has a top-selling enzyme insufficiency drug in Creon. It is also selling back to AstraZeneca a treatment for inflammatory bowel disease that conflicts with Abbvie's Skyrizi. No terms were disclosed for either sale.
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