Nestlé advertising & marketing assignments

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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 significant 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. In 2021, the group took its first step into plant-based milk with the European launch of Wunda, made from yellow split peas. 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 2021 came in at approx €84.2bn (SFr 87.1bn) with net income of approx €16.6bn (SFr 17.2bn). Its biggest single segment is powdered & liquid beverages (including coffee), accounting for almost 28% of revenues (or €23.2bn). Petcare is the next biggest at 18% (or €15.0bn). The US is the group's single biggest market, accounting for 30% of revenues, much of it from pet foods in which it is the local leader. Some considerable way behind is China (at 6%), followed by France (4%), and then the UK, Mexico, Brazil, Phillippines and Germany. 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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Adbrands Update 24th Mar 2022: Nestlé and Renault, two of the last Western companies to have continued working in Russia in apparent defiance of pressure from their peers, their investors and customers, finally agreed to suspend some or all operations. Nestlé has stopped production and sales of non-essential items, including coffee, confectionery and most pet food. "As the war continues in Ukraine, our activities in Russia will focus on providing essential food, such as infant food and medical/hospital nutrition – not on making a profit," it announced in a statement. "We do not expect to make a profit in the country or pay any related taxes for the foreseeable future in Russia. If any profit is made, it will be donated in its entirety to humanitarian relief organisations." Renault, which markets the Renault and Dacia brands in Russia and also has a controlling stake in local car manufacturer Avtovaz, said it has suspended activities at its main factory in Moscow and is "assessing the available options" for Avtovaz "while acting responsibly towards its 45,000 employees in Russia".

Adbrands Daily Update 8th Dec 2021: Nestlé reduced its historical investment shareholding in L'Oreal from over 23% to 20.1%. It sold the shares back to L'Oreal for a combined total of €8.9bn, having originally acquired the shares in 1974 for the equivalent of less than €300m. However it will avoid a huge tax bill on the gain, because the French group is cancelling the reacquired shares, in a move that will slightly increase the percentage of equity held by the Bettencourt family. Nestlé, meanwhile, will use the funds to buy back 20m of its own shares from public markets.

Marketer Moves 13th October 2021: New regional leadership named at Nestlé. See Marketer Moves (members only).

Adbrands Daily Update 30th Apr 2021: Nestlé continues to pivot away from traditional foods and beverages towards health and wellness products. As first reported earlier this week, it confirmed today the acquisition of the core brands of The Bountiful Company, the US-based maker of vitamins and supplements under brands including Nature's Bounty, Solgar and Osteo Bi-Flex. It is the leading marketer of nutritional supplements in the US and also has a presence in the UK and other global markets. The business is currently owned by investment firm KKR which had filed plans for an IPO earlier this year at a valuation of around $6bn. Nestlé agreed a purchase price of $5.75bn. It will acquire only Bountiful's vitamins and supplements, which will be absorbed into its existing Nestlé Health Science division. Combined sales last year for those brands were almost $1.9bn. Bountiful will retain its sports and active nutrition brands such as Pure Protein and Body Fortress.

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.

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