* For a limited period, this profile and selected other Adbrands pages which would normally be available only to subscribers, have been opened to all users. Please note that access to most other profiles as well as the account assignments database is still limited to paid subscribers *
See separate profiles for brand advertising
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 Nescafe, Kit Kat, Maggi, Purina and Perrier, among many others. The group also controls a large shareholding in cosmetics company L'Oreal and has its own growing medical skincare division. However, aside from those sidelines, recent years have seen a greater concentration on a focused food and beverage business. In particular Nestlé has leveraged its performance in sectors such as ice cream and petfoods with an aggressive acquisition strategy, and divested businesses where it has failed to gain a leading position. At the same time, it has placed health and wellness at the forefront of its agenda, developing the widest possible range of nutritionally balanced products under the overall umbrella "Good Food, Good Life". Yet despite that focus, overall growth has slowed dramatically since 2012 to its lowest level in years as a result of fierce competition from faster-moving niche food and beverage brands. See also Nestlé USA, Nestlé UK, Nestlé Australia, Nestlé Latin America and Nestlé Japan.
Who handles Nestlé's advertising? Click here for agency account assignments for Nestlé.
Avenue Nestlé 55
Tel: 41 21 924 2111
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 Nestle'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, Nestle 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.
Adbrands Daily Update 19th Dec 2019: Hot on the heels of the transfer of its US ice cream business to Froneri, Nestlé also found a solution for chilled foods business Herta, which has been under review for most of this year. It will transfer management control and a 60% equity stake to Spanish food group Casa Tarradellas. The deal includes Herta cold cuts and meat-based products in six European countries, as well as the Herta dough business in France and Belgium. Nestle will retain full control over the Herta-branded vegetarian range. The business being acquired by Tarradellas was valued at €690m. The buyer is the market leader in Spain for pizza, fresh dough and charcuterie.
Nestlé has maintained a strong position in the global food market, strengthening its hand in several key segments including ice cream, beverages, frozen meals, pet care and culinary products through acquisitions, or well-chosen partnerships. No rival comes close to matching its broadly diversified portfolio, and its name is almost certainly the world's best-known food and beverage brand, and probably the most trusted.
Nestlé has five operating divisions. The food businesses operate as three geographic divisions in the Americas, Europe and Asia Pacific regions, while the company's water and healthcare businesses operate as separate global units. The group's products fall into six categories. However across these, there are six main brands which between them generate more than 70% of group revenues. The biggest of all is the main Nestlé brand, used for dairy products, mineral water, confectionery and prepared foods. It alone generates sales of around SFr 45bn a year (or almost €30bn), equivalent to 40% of combined revenues. It is supported by Nescafe, Nestea, Maggi, Buitoni and Purina, which between them contributed a further SFr 30bn or so in revenues.
Beverages are Nestlé's biggest business, and also its most profitable, contributing almost a third of operating profit. Powdered and liquid beverages excluding water generated combined revenues in 2019 of SFr 23.2bn (€20.9bn); while Nestlé Waters (Perrier, Vittel etc - see separate profile) reported additional sales of SFr 7.8bn of which SFr 7.4bn (€6.6bn) was water (as opposed to other soft drinks). The group was a pioneer in the creation of soluble or powdered drinks, using a process it first developed for milk. That portfolio is now dominated by Nescafe, by far the biggest soluble coffee brand worldwide. Combined sales from coffee alone, and coffee making systems, all included in the powdered and liquid beverages total, were SFr 9.07bn (€8.3bn) in 2016. Nestle is the global leader in coffee with around 23% share in 2015, according to Euromonitor. (JAB, owner of Jacob Douwe Egberts and Keurig, ranks #2 with around 15%).
In addition Nestlé is the world leader in non-coffee soluble beverages with chocolate drinks Nesquik and Nescau, and Milo chocolate malt. Nestea and other ready-to-drink chilled teas are produced by Beverage Partners Worldwide, a joint venture with Coca-Cola in Europe and Canada. Until 2014, the group also owned shelf-stable fruit juice business Juicy Juice, but this was sold off in 2014 to private equity and is now part of Harvest Hill Beverage Company.
Linked to its coffee business is the fast-growing coffee vending system Nespresso, sales of which are now around SFr 4bn. The group launched a new premium tea dispensing system, Special.T, in September 2010, but so far sales are restricted to the launch markets of France and Switzerland. The group also markets more robust coffeemaking systems for professional or office use. Jacobs Douwe Egberts and its linked company Keurig are its main rivals in consumer coffee systems; Mars has a small presence in office systems.
Sitting behind Beverages is the Milk Products & Ice Cream division, with combined revenues of SFr 13.3bn (€11.9bn) in 2019. Traditionally the core of this business is provided by shelf-stable dried powder products ranging from infant products (Nido, Nespray and others) to Coffee-Mate, or milk-based cooking products such as Carnation and La Lechera. More recently the group has introduced chilled dairy products under its shelf-stable brand names, as well as ready-to-drink flavoured milks, La Laitiere, Yoco and LC1 yogurts, fermented drink Chamyto, and low-fat concentrated milk Gloria. Nestlé enjoyed some success with the roll-out of Sveltesse as the umbrella for a wide range of wellness-oriented chilled low-fat dairy products and other other healthy dessert items.
However, in general the chilled dairy sector has been one in which Nestlé has delivered an uncharacteristically weak performance compared to rivals. In the UK, Nestlé acquired a portfolio of local yogurts in 2002 including Ski and Munch Bunch, but these still rank far behind behind Muller and Danone. In 2003, the company formed an alliance in Germany and Austria with Muller, licensing that company rights to its LC1 brand. However Nestlé's chilled dairy range has struggled to overtake the considerable overall lead already enjoyed in this sector by Danone. In 2006, the group merged all its chilled dairy operations in the UK and mainland Europe into a joint venture controlled by Lactalis of France. Nestlé's chilled dairy products are marketed in Brazil, Argentina and several other Latin American markets since 2003 by Dairy Partners Americas, a joint venture with New Zealand's Fonterra dairy cooperative.
Milk products also includes a large portfolio of breakfast cereals, which are marketed outside the US by Cereal Partners, a joint venture with General Mills. Combined sales of milk products excluding ice cream totalled SFr 10.54bn (€9.7bn) in 2016. [Continued on next page...]
All rights reserved © Mind Advertising Ltd 1998-2020