From chocolate, powdered beverages and even water, the Swiss food and drink company Nestle (VTX: NESN) has truly defined the food market over the years. Through billions made in revenue, Nestle has become a household name by its brands such as Coffee-Mate and Gerber. In fact, Nestle's confectionary sector makes up about 3% of US sales in total. While Nestle's overall performance has been growing strong, new retail strategies may pose a threat to the 151-year old business. Nevertheless, Nestle has grown immensely since then, only relying on a few tweaks to its business strategies to keep the consumers who know and love their products, making it one of the biggest food companies in the world.
Beginning in 1866 in Switzerland, Nestle initially offered a healthier alternative to milk - condensed milk - as the Anglo-Swiss Condensed Milk Company. Facing sharp competition from Henri Nestle's Farine Lactee, a flour and milk based product that aimed to aid infants that could not consume breast-milk, the two companies began a rivalry with each other. The companies, Nestle and Anglo-Swiss, quickly began offering similar versions of condensed milk and infant formula, both finding success abroad. By 1905 however, Anglo-Swiss is merged with Nestle, which has begun to sell its well-known chocolate milk, Nestle. From that point, Nestle began to acquire a multitude of different food products, making mergers with soup company Maggi in 1947, frozen food company Stouffer's in 1973 and the most surprising partnership with the French cosmetics company L'Oreal (EPA: OR) in 1974. Giving itself over to diversification in both food and the market over all, Nestle currently has over 8,000 Nestle-branded products. In addition, Nestle currently has acquired an impressive market capitalization of approximately 210 billion Swiss francs.
Currently headquartered in Veney, Vaud, Switzerland, Nestle's revenue is supported mostly by powdered and liquid beverages, nutrition products and milk products and ice cream, with all three still growing immensely. While Nestle has found success, its biggest competitors are the American manufacturer Mars, Incorporated and the American confectionary company Mondelez
Given the consumer's recent leaning towards buying groceries online by prominent online presences such as Amazon
To fight back, Nestle has taken a different, healthier approach to their food to please the average consumer. From removing the thickening agent carrageenan to reshaping sugar crystals to decrease the amount of sugar in its products, Nestle is redefining itself in the market to appeal to consumers that now have a variety of options to choose from. Even Nestle has entered into the business of delivering meals, investing in the meal delivery company Freshly, which offers fully prepared, healthy, chef-cooked meals right to the door.
As of late, Nestle is currently considering to sell off its confectionary brands that have done well in the past but have decreased in the present day. While it's confectiontary sector has a whopping revenue of $920 million every year, Nestle has reported a slump in global sales over its sweets. With today's consumer surrounded by healthier options, only time will tell if Nestle will completely reshape its approach to its customers. While Nestle seems to be geared towards success overall, some of its household name confectionary products may face a bittersweet end.
