Operations, products, services1

Nestle is the largest food and beverage company in the world. It produces beverages, milk based products, ice creams, prepared dishes, and pharmaceutical products. It is an international public company with operations in large variety of geographic and product markets. The company seems to be financially stable. Nestle demonstrates continues growth in EBIT despite even decrease of sales in 2009 (during the crisis)². The company’s headquarter is located in the company’s “country of origin” – in Switzerland.

Nestle divides all its products into several groups: coffee, chocolate-based and malted drinks, bottled water, fruit juices, breakfast cereals, performance bars, infant food products, ice cream, yoghurt, desserts, noodles, nutritionally enriched foods and drinks, pet care products and pharmaceutical products. Also the company holds shares cosmetic companies (for example L’Oreal) and run with them several joint ventures, so indirectly the company is also present in cosmetics business.

This product groups are reflected into structure of the company. Nestle has got nine divisions that were created to produce and market certain product groups. They include: powdered and liquid beverages; milk products and ice cream, prepared dishes and cooking aids, pet care, confectionary, nutrition, water, Alcon (sold in 2010), and “health and beauty” joint ventures.

One of divisions of the company is “Nestle Waters” that produces and sells Pure Life, Aquarel, AcquaPanna, Vittel, Vera and many other brands (64 brands altogether). The division operates nearly 100 productions and is quite successful. For instance, in America Nestle holds one third of the whole market of bottled water. Nestle Pure Life is the most powerful bottled water brand in the world.

Initial business of Nestle – “infant products” - now include include cereals, meals and drinks for small children (Nestle, Nestum, Mucilon, Cerelac, and Gerber brands)

The performance nutrition division (or sport nutrition division) provides nutrition (energy bars, sports drinks, gels and protein supplements) products for athletes under PowerBar and Musashi brand names.

Pet care division produces food products for home cats and dogs. The company uses a number of brands for this division, but the most popular are as Purina andFriskies.

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The healthcare sub division offers food products and drinks enriched by vitamins or created for special diets under Nutren, Clinutren and several others brand names.

The largest variety of different products was developed for “Culinary, chilled & frozen food” category. In the list of its brands you can find include Buitoni (pasta and pizza), Maggy, Herta (meat products), Lean Cuisine line, Thomy (mayonnaise). The list of products is impressive: frozen sandwiches, prepared frozen or chilled meals, Maggi, noodles, seasonings products, mustard, dressings, sauces, oils, and spreads. This division also operates in the segment of breakfast cereals. The most powerful brands here are Chocapic, Cookie Crisp, Cini Minis and Fitness.

Division, specializing into milk products (“diary” division) actually produces large variety of goods: powdered milk, yoghurts and different desserts. The most popular brands here are Coffee-mate and Nido.

The ice cream Nestle’s division produces such as ice cream tubs, waffle cones, and ice cream bars. The company key brands was mostly bought (not created by the company), they include Haagen-Dazs, Movenpick, Extreme, and Dreyer's.

Also the company operates confectionery division, which primarily produces chocolates and chocolate based candies. These products are sold under Nestle, Aero, Orion, Butterfinger, Crunch, Kit Kat and many other brands.

In the US, Canada, Australia and New Zealand the company works on basis of Jenny Craigs’ Inc. – company, that offers famous weight management program, including sport activities, medical consultancies and special nutrition program. This organization, bought in 2006 by Nestle offers its customers a wide range of branded food products and related services.

Division named “Other food and beverages” includes Nestle Professional, Nespresso and several food and beverages joint ventures. Nescafe isone of the flagship Nestle’s brands, one of the leading brands in the world. Another famous drink produced by Nestle is Nesquik, chocolate-based drink, which target customers are children. Additionally, Nestle produces fruit juices under the brand name Juicy Juice and iced tea “Nestea”.

In pharmaceutical products and cosmetics market Nestle operates via joint-ventures companies like L'Oreal, Galderma and Laboratories Inneov. Nestle had its own firm in this sector – Alcon, a company specializing in ophthalmic pharmaceuticals and ophthalmic surgical equipment, contact lenses and related care products, but has sold it in 2010.

The last business Nestle is involved in is “Nestle Professional” – line of “hot beverage solutions” (mostly coffee machines). Actually, Nestle now is the world leader in this segment.³

In all these segments Nestle is involved in all stages of creating product value: the company develops, produces and markets goods by itself. The history of the company is composed of mergers and acquisitions, and usually the company leave brand and production “as it is” keeping traditions and adapting to local peculiarities. That’s why the company has so many brands: along with global ones like Kit Kat it develops and promotes national and local brands. Such an approach requires a lot of flexibility and a certain level of decentralization. As a result, the company has a large number of brands, although limited number of them is world-known or holding leading positions (contrary, for example, to Unilever approach, when company holds only strong brands, aiming to be number one in every segment of presence). All in all, Nestle Group’s operations can be regarded as related diversification with multidomestic approach to internationalization.