NESTLÉ: Its Origin and History

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Nestle’s history began in 1866, with the foundation of the Anglo-Swiss Condensed Milk Company. Henri Nestlé develops a breakthrough infant food in 1867, and in 1905 the company he founded merges with Anglo-Swiss, to form what is now known as the Nestlé Group.

 

US brothers Charles and George Page help establish Anglo-Swiss Condensed Milk Company. Using abundant supplies of fresh milk in Switzerland, they apply knowledge gained in their homeland to establish Europe’s first production facility for condensed milk in Cham. They start supplying Europe’s industrial towns with the product under the Milkmaid brand, marketing it as a safe, long-life alternative to fresh milk. In 1867, Nestlé’s founder, German-born pharmacist Henri Nestlé, launches his ‘farinelactée’ (‘flour with milk’) in Vevey, Switzerland. It combines cow’s milk, wheat flour and sugar, and Nestlé develops it for consumption by infants who cannot be breastfed, to tackle high mortality rates. Around this time, he starts using the now iconic ‘Nest’ logo.

 

In 1875, Henri Nestlé sells his company and factory in Vevey to three local businessmen. They employ chemists and skilled workers to help expand production and sales.Fierce competition develops between Nestlé and Anglo-Swiss, when both companies start selling rival versions of the other’s original products: condensed milk and infant cereal. Both firms expand sales and production abroad.

 

Nestlé begins selling chocolate for the first time when it takes over export sales for Peter & Kohler. The Nestlé company also plays a role in the development of milk chocolate from 1875, when it supplies his Vevey neighbour Daniel Peter with condensed milk, which Peter uses to develop the first such commercial product in the 1880s.

 

In 1905, Nestlé & Anglo Swiss has more than 20 factories, and starts using overseas subsidiaries to establish a sales network that spans Africa, Asia, Latin America and Australia. As World War One approaches, the firm benefits from the period of prosperity known as the Belle Époque or ‘Beautiful Age’, and becomes a global dairy company.Anglo-Swiss and Nestlé merge to form the Nestlé & Anglo-Swiss Milk Company. The company has two head offices, in Vevey and Cham, and opens a third office in London to drive dairy export sales. Over several years the company expands its range to include unsweetened condensed milk and sterilised milk.

 

The outbreak of war in 1914 leads to increased demand for condensed milk and chocolate, but a shortage of raw materials and limits on cross-border trade hamper production for Nestlé & Anglo-Swiss. To solve this problem, the company acquires processing facilities in the US and Australia, and by the end of the war it has 40 factories.

 

Condensed milk is long-lasting and easy to transport, which makes it popular with armed forces. For example, in 1915 the British Army starts issuing Nestlé canned milk to soldiers in their emergency rations. Strong demand for the product means that the company’s milk refineries are working flat out. The following year Nestlé & Anglo-Swiss acquires Norwegian dairy company Egron, which has patented a spray-drying process for producing milk powder – a product its new owner starts selling.

 

Milk shortages during the year 1917-1918 in Switzerland meant that Nestlé & Anglo-Swiss had to surrender fresh milk supplies to help people in towns and cities. To meet demand for condensed milk from the warring nations, the company buys US refineries and signs supply agreements with Australian companies, which it later acquires.

 

After the war military demand for canned milk declines, causing a major crisis for Nestlé & Anglo-Swiss in 1921. The company recovers, but is rocked again by the Wall Street Crash in 1929, which reduces consumer purchasing power. However, the era carries many positives: the company’s management corps is professionalised, research is centralised and pioneering products such as Nescafé coffee are launched.

 

The company buys Switzerland’s largest chocolate company Peter-Cailler-Kohler, the origins of which date back to 1819 when François Louis Cailler creates one of the country’s first chocolate brands Cailler. Chocolate now becomes an integral part of the Nestlé & Anglo-Swiss business.

 

The outbreak of World War Two in 1939 affects virtually every market, but Nestlé & Anglo-Swiss continues to operate in difficult circumstances, supplying both civilians and armed forces. In 1947, the company adds Maggi soups and seasonings to its product range, and adopts the name Nestlé Alimentana.

 

During 1948-59, the post-war period is marked by growing prosperity, and people in the US and Europe spend money on machines that make life easier, such as refrigerators and freezers. They also favour convenience foods, and Nestlé Alimentana meets this need with new products including Nesquik and Maggi ready meals.

 

Acquisitions enable Nestlé to enter fast-growing new areas such as frozen foods, and to expand its traditional businesses in milk, coffee and canned foods. In the 1970s the company diversifies into pharmaceuticals and cosmetics. It starts to attract criticism from activist groups that allege its marketing of infant food is unethical. Nestlé later becomes one the first companies to apply the WHO code on breast-milk substitutes across its business.

 

Nestlé buys UK confectionery company Rowntree Mackintosh in 1988, adding brands including KitKat, After Eight and Smarties to its portfolio. It also acquires Italian pasta, sauce and confectionery group Buitoni-Perugina.

 

After expanding its ice-cream business in the 1990s, Nestlé acquires the licensing rights to premium producer Häagen-Dazs in the US and Canada, and buys Mövenpick and Dreyer’s Grand Ice Cream in 2003. It also acquires frozen foods business Chef America for USD 2.6 billlion.

 

Today, Nestlé continues strategic transformation of the water business with the sale of Nestlé Waters North America brands and is entering the functional hydration segment with the acquisition of Essentia and Nuun. Nestlé Health Science expands its portfolio through the acquisition of the core brands of The Bountiful Company. Nestlé reduces its stake in L'Oréal. The company sharpens geographic focus, creates Zones North America and Greater China. Nestlé’s regeneration efforts are launched under the umbrella of 'Generation Regeneration'.