Nestle Company Profile

Nestle Company Profile

Introduction:
Nestle India Ltd. is a 51% subsdiary of Nestle SA, the largest processed food company in the world. In India, the company dominates the coffee, infant food, weaning cereals and noodles markets. It has very strong brands like “Nescafe”, “Maggi” , “Cerelac” and “Milkmaid”. Nestle also has a presence in chocolates and confectionery. The future growth in the company will come from chocolates, culinary and new businesses, like mineral water and packaged liquid milk. Under the new Managing Director, Mr. Carlos Donnati, Nestle has undertaken a rigorous restructuring and cost cutting exercise. The company pruned the large basket of brands, cut stock keeping units and focussed on working capital management to reduce overheads and improve effectiveness of ad-spends. The company is now concentrating on profitability and capital efficiency as against aggressive top-line growth. Nestle will go in for fewer brand launches in the future. New product lines and brands will be supported with aggressive advertising and marketing support throughout the lifecycle. In the past the company would launch many brands at once with huge initial launch advertising and then let the brands float. Nestle’s typical consumer in future is going to be from the urban middle class and the company is counting on increase in urban incomes and converging lifestyles for future growth.

Major line of Business:

Nestle primary lines of business are beverages, infant foods, confectioneries, culinary and milk products. In future, Nestle plans to make an aggressive entry into mineral water and ultra heat treated liquid milk. By 2008, Nestle expects over 50% of its turnover to come from these two categories.

Select Products and Services:

Beverages: Beverages account for 38% of the company’s turnover and Nestle is a market leader in instant coffee with its Nescafe and Sunrise brands. Nestle does not have a presence in the Tea segment
Milk Products : Nestle manufacrtures and markets a range of milk products like dairy whiteners, sweetened milk, infant foods , weaning cereals under the Everyday, Milkmaid, Lactogen, and Cerelac brands. Milk products form 34% of the company’s turnover and are the cash generators for the company. These segments are growing at a very slow pace.
Confectionery: Nestle launched “Kit Kat” in 1995 and virtually created the popular wafers segment in the chocolate market. Cadbury is the market leader in all segments in chocolates except for wafers. Nestle has other popular brands in chocolates like Crunch, Charge ,Milky Bar, Bar One and the newly launched Munch . Nestle also has a presence in confectionery. The company has brands like Eclairs, Allens, Polo and After Eight.
Culinary: Nestle’s “Maggi” has become the most popular “two-minute” snack in urban India. The company also markets tomato ketchup, soups, pickles and ready mixes under the Maggi brand.



Key Differentiating Factors:

Nestle is the only FMCG company with presence in a broad range of value added processed foods and beverages. In line with the parent Nestle SA’s strategy the company believes in manufacturing all products in house, instead of using third party manaufacturing. HLL is the other comparable food company in the country, but it largely out-sources manufacturing. At 600,000 retail outlets, Nestle has the widest retail reach among all FMCG companies after Hindustan Lever.

Financial Statistics:

Year 1998(December-End)
Sales turnover Rs.15b.
Profit Rs 1 bn

Personnel Highlights:

NA

Opportunities:

The opportunities for Indian MBAs exist in Sales and Marketing in the company.

Contact:

Nestle India Ltd.
DLF Centre, Sansad Marg
New Delhi 110001
Phone: 3320379
Fax: 3314812