Henri Nestlé (1814 - 1890)
The history of Nestlé began in Vevey, Switzerland, in1867 when founder Henri Nestlé created one of the first infant foods in response to the need for a healthy and affordable product to serve as an alternative for mothers who could not breastfeed their babies. He called his product Farine Lactée Henri Nestlé.
Within a few years, the Farine Lactée product was marketed in Europe. Nestlé called his company Société Farine Lactée Henri Nestlé. In 1874, Nestlé developed its condensed milk product, to contend with the Anglo-Swiss Condensed Milk Company,
A competitor that was producing cheese, instant formulas and had opened Europe’s first sweetened condensed milk factory in Cham, Switzerland, to market the first condensed milk, MILKMAID.
The two companies merged in 1905, the year after Nestlé added chocolate to its line of foods. The newly formed Nestlé and Anglo- Swiss Milk Company had factories in the United States, Britain, Spain and Germany. Soon the company was manufacturing in Australia with warehouses in Singapore, Hong Kong and Bombay. Most production however still took place in Europe.
The start of World War I made it difficult for Nestlé to buy raw ingredients and distribute products. Fresh milk was scarce in Europe, and factories had to sell milk for the public need instead of using it as an ingredient in foods. Nestlé purchased several factories in the U.S. to keep up with the increasing demand for condensed milk and dairy products via government contracts. The company’s production doubled by the end of the war.
The first Nestlé logo 1868
When fresh milk became available again after the war, Nestlé suffered and slipped into debt. The price of ingredients had increased, the economy had slowed and exchange rates deteriorated because of the war. An expert banker helped Nestlé find ways to reduce its debt. By the 1920s Nestlé was creating new chocolate and powdered beverage products. Adding to the product line once again, Nestlé developed Nescafé in the 1930s and Nestea followed. Nescafé, a soluble powder, revolutionized coffee drinking and became an instant hit. With the onset of the Second World War, profits plummeted.
Switzerland was neutral in the war and became increasingly isolated in Europe. Because of distribution problems in Europe and Asia, Nestlé opened factories in developing countries in Latin America. Production increased dramatically after America entered the war and Nescafé became a main beverage for the American soldiers in Europe and Asia. Total sales increased by $125 million from 1938 to 1945.
After 1945, Nestlé continued to prosper, merging with Alimentana S.A., a company that manufactured soups and seasonings, in 1947. In the coming years, Nestlé acquired Cross & Blackwell, Findus frozen foods, and Libby’s fruit juices. Nescafé instant coffee sales quadrupled from 1960 to 1974, and the new technology of freeze drying allowed the company to create a new kind of instant coffee, which they named Taster’s Choice.
Expanding its product line outside of the food market, Nestlé became a major stockholder in L’Oréal cosmetics in 1974. Soon after, the company suffered with increasing oil prices and the slowing growth in industrialized countries. Foreign exchange rates decreased, in turn reducing the value of the sterling pound, dollar and franc. Prices of coffee beans and cocoa rose radically, presenting further problems for Nestlé. The company decided to venture into the pharmaceutical industry by acquiring Alcon Laboratories, Inc.
By the 1980s, in one of the largest takeovers at that time, Nestlé bought Carnation for $3 billion. International trade barriers diminished in the 1990s, opening trade with Eastern parts of Europe and China. In the 1990s, Nestlé acquired San Pellegrino, and Spillers Petfoods of the UK. With the acquisition of Ralston Purina in 2002, the Nestlé owned pet care businesses joined to form the industry leader Nestlé Purina PetCare.
One of the original Nestlé chocolate adverts
In 2002, there were also two major acquisitions in North America: in July, Nestlé merged its U.S. ice cream business into Dreyer’s, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc. The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé’s position as one of the world market leaders in this product category. In 2006, Jenny Craig and Uncle Toby’s were added to the Nestlé portfolio. 2007 saw Novartis Medical Nutrition, Gerber and Henniez join the Company, and in 2008, Frozen Pizza of Kraft Foods was integrated into the Nestlé Group. With a strong view of the company’s mission in mind, focusing on long term potential over short-term performance, Nestlé will continue to grow, introduce new products and renovate existing ones.