1866-1905: The pioneer years
Our history begins in 1866, when the Anglo-Swiss Condensed Milk Company opens the first European condensed milk factory in Switzerland. 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. During this period cities grow and railways and steamships bring down commodity costs, spurring international trade in consumer goods.
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.
Nestlé’s founder, German-born pharmacist Henri Nestlé, launches his ‘farine lactée’ (‘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.
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.
In 1882 Anglo-Swiss expands into the US, but the death of George Page frustrates its plans. In 1902 it sells its US-based operations, which paves the way for an eventual merger with Nestlé.
Nestlé begins selling chocolate for the first time when it takes over export sales for Peter & Kohler. Henri Nestlé himself plays a key role in the development of milk chocolate from 1875, when he supplies his Vevey neighbour Daniel Peter with condensed milk, which Peter uses to develop the first such commercial product in the 1880s.
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.
1914-1918: Survival during wartime
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.
War breaks out across Europe and disrupts production for the company, but hostilities also drive demand for Nestlé dairy products, in the form of large government contracts.
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.
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 in Switzerland mean that Nestlé & Anglo-Swiss has 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.
1919-1938: Crisis and opportunity
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.
Falling prices and high stock levels lead to the first, and only ever, financial loss for Nestlé & Anglo-Swiss in 1921. Banker Louis Dapples joins as Crisis Manager, and encourages the company to appoint professional managers for the first time. Administration is centralised, and research is consolidated at one laboratory in Vevey, Switzerland.
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.
Malted chocolate drink Milo is launched in Australia, and its success means it is later exported for sale in other markets. The company continues to develop baby and infant foods in this inter-war period, and launches Pelargon in 1934, a full-milk powder for babies enriched with lactic acid bacteria, to improve its digestibility.
A competitive market for chocolate in Switzerland encourages Nestlé-Peter-Cailler-Kohler to innovate by launching Galak white chocolate and Rayon, a chocolate with honey and air bubbles, the next year. Vitamins are a major selling point for healthy products in the 1930s, and Nestlé launches vitamin supplement Nestrovit in 1936.
Nescafé is launched as a ‘powdered extract of pure coffee’ that retains coffee’s natural flavour, but can be prepared by simply adding hot water. The product is the brainchild of Max Morgenthaler, who begins work on it in 1929, when the Brazilian government asks Nestlé & Anglo-Swiss to find an outlet for its huge coffee surplus.
1939-1947: Riding out the storm
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.
Fearing that the Axis powers could occupy Switzerland, Nestlé & Anglo-Swiss relocates some managers to a new office in Stamford in the US, which operates as the company’s second headquarters during the war. The fighting in Europe makes it impossible for Nestlé to export milk from there, so the company supplies Africa and Asia from the US and Australia, and expands production in Latin America.
World War Two initially slows sales of Nescafé, but they pick up as hostilities continue. After the US enters the war, Nestlé brands rapidly gain popularity among American service personnel. At the end of the war, Nescafé is also included in CARE aid supplies in Japan and Europe. Nestea is launched in the late 1940s.
Nestlé & Anglo Swiss merges with Swiss company Alimentana, which produces Maggi soups, bouillons and seasonings, and is renamed Nestlé Alimentana. Alimentana’s history dates back to 1884, when Julius Maggi developed a protein-rich dried soup to tackle malnutrition.
1948-1959: Greater consumer convenience
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.
In the US Nestlé Alimentana launches a soluble tea, Nestea, which is manufactured using the same method as Nescafé, and can be served both hot or cold. Nesquik, which dissolves easily in cold milk, is also launched in the US and becomes a top seller.
Nestlé infant cereal has been available since 1948 as a powdered product, but it is now rebranded as Cerelac. Originally only sold as a bouillon cube, Maggi seasoning brand Fondor is launched as a powder. Packaged in a convenient shaker, it can now be used as a condiment in the dining room, as well as in the kitchen.
Canned ravioli is launched under the Maggi brand. Its huge success prompts Nestlé to launch more canned, prepared foods, which become a new growth segment.
1960-1980: Frozen foods to pharmaceuticals
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.
With increasing numbers of households buying freezers, demand for ice cream is rising. Nestlé buys German producer Jopa and French manufacture Heudebert-Gervais to capitalise on this growth, and adds Swiss brand Frisco in 1962. The company also buys UK canned foods company Crosse & Blackwell.
Nestlé buys the Findus frozen food brand from Swedish manufacturer Marabou, and extends the brand to international markets. Findus is one of the first companies to sell frozen foods in Europe, from 1945.
Chilled dairy products are increasingly popular, Nestlé buys French yogurt producer Chambourcy. In the early 1970s the latter launches the Sveltesse range of yoghurts, aimed at health- and weight-conscious consumers.
Nestlé enters mineral waters by buying a stake in French waters brand Vittel.
Keen to bolster its canned foods and frozen portfolio in Anglo-Saxon markets, Nestlé takes over the US frozen foods company Stouffer Corporation, and buys canned foods producer Libby, McNeill & Libby in 1976.
For the first time, Nestlé diversifies beyond food and drink, becoming a minority shareholder in global cosmetics company L’Oréal.
Renamed Nestlé S.A, the company continues its diversification strategy, buying US pharmaceutical and ophthalmic products manufacturer Alcon Laboratories. Declining breast-feeding rates lead some activists to question the baby food marketing strategies of companies including Nestlé. In 1977 they call on people to boycott Nestlé products.
1981-2005: Towards Nutrition, Health and Wellness
Following years of growth, Nestlé disposes of unprofitable brands and promotes those that satisfy increasingly health conscious consumers, in line with its new ‘Nutrition, Health and Wellness’ ambition. The company expands in the US, Eastern Europe and Asia, and targets for global leadership in water, ice cream and animal food.
Stouffer’s Lean Cuisine frozen meals are launched on a low-fat, low-calorie platform, and the brand posts impressive sales. Nestlé and L’Oreal establish Galderma as a joint venture active in dermatology. The World Health Assembly adopts the WHO code on breast-milk substitutes, and Nestlé is one of the first companies to develop policies based on it and apply them across its business.
By acquiring US-based Carnation Company for USD 3 billion, Nestlé adds brands such as Carnation and Coffee-Mate to its portfolio. It also enters the pet food business when it buys the Friskies brand.
The Nespresso story begins with a simple idea: enable anyone to create a perfect cup of coffee, just like a skilled barrista.
Nestlé buys UK confectionery company Rowntree Mackintosh, adding brands including KitKat, After Eight and Smarties to its portfolio. It also acquires Italian pasta, sauce and confectionery group Buitoni-Perugina.
Nestlé establishes a joint venture with General Mills, Cereal Partners Worldwide, to produce and market breakfast cereals globally. The company also creates a joint venture with The Coca-Cola Company to form Beverage Partners Worldwide, to manufacture and market brands including Nestea.
Nestlé develops its position in mineral waters by acquiring France’s Perrier Group. Nestlé Sources Internationales is created as a separate waters business in 1993, and is renamed Nestlé Waters in 2002.
New CEO Peter Brabeck-Letmathe sees growth potential in personalised nutrition. He articulates Nestlé’s position as the leader in ‘Nutrition, Health and Wellness’, as the millennium approaches.
Nestlé buys Italian mineral waters business Sanpellegrino Group. Nestlé Pure Life is launched in developing countries, to guarantee clean and healthy drinking water, and Aquarel is launched in Europe two years later.
The Sustainable Agricultural Intiative Nestlé (SAIN) is launched to promote collaboration with local farmers. It aims to improve their living standards and ensure a sustainable supply of commodities.
Nestlé buys US pet food business Ralston Purina, and merges it with Nestlé Friskies Petcare to establish the new market leader in pet care, Nestlé Purina Petcare.
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.
2006-today: Creating Shared Value
Nestlé articulates its Creating Shared Value approach to business for the first time, and launches its Nestlé Cocoa Plan and Nescafé Plan to further develop sustainable supply chains in cocoa and coffee. While strengthening its position in traditional segments, infant formula and frozen foods, Nestlé strengthens its focus on medical nutrition.
Nestlé articulates its Creating Shared Value approach to doing business, whereby any action for shareholders must also create value for the communities where it operates and wider society. Nestlé acquires weight management business Jenny Craig and Australian breakfast cereals company Uncle Toby’s.
A growing focus on medical nutrition leads Nestlé to the acquire Novartis Medical Nutrition. It also buys baby food company Gerber and Swiss mineral waters concern Sources Minérales Henniez.
The first Creating Shared Value Forum in New York brings together experts to discuss global challenges in the areas of nutrition, water and rural development, and the role of business in helping to solve them. The Forum becomes an annual event. Nestlé creates a foodservice business division, named Nestlé Professional from 2009.
Nestlé acquires Kraft Foods’ frozen pizza business. The Nestlé Cocoa Plan and Nescafé Plan are both launched to develop the company’s sustainable supply chains in cocoa and coffee, improve social conditions in farming communities, and ensure their profitability.
Nestlé Health Science and the Nestlé Institute of Health Sciences are established, to research science-based nutritional products aimed at preventing and treating chronic medical conditions. Nestlé becomes the first food company to work with the Fair Labor Association (FLA), to help tackle child labour in the cocoa supply chain.
Nestlé acquires Wyeth Nutrition, formerly Pfizer Nutrition, for USD 11.9 billion, to strengthen its position in infant nutrition.
Nestlé Health Science buys US-based medical foods company Pamlab, which specialises in medical nutrition for patients with conditions including mild cognitive impairment and depression. Weight management business Jenny Craig is sold in America and Oceania.
With the creation of Nestlé Skin Health, Nestlé takes full control of the Galderma dermatology joint venture which it created with L’Oréal in 1981. The companies also end their joint venture Innéov, a cosmetic nutritional supplements business launched in 2002. Galderma subsequently acquires some of its assets.
Nestlé launches Cailler, the oldest surviving Swiss chocolate brand, as its first super-premium global chocolate. French frozen foods business Davigel is sold.