his is Nestlé S.A. mission statement overview in 2013.

For more
information on how to write a mission statement, please refer to our
article.

Company Background

Name Nestlé S.A.

Logo

Industries served Food processing

Geographic areas Worldwide

served

Headquarters Switzerland

Current CEO Paul Bulcke

Revenue CHF 92.2 billion (2012)

Profit CHF 10.6 billion (2012)

Employees 328,000 (2012)

Main Competitors Unilever NV, Hershey Foods, Kraft Foods, Cadbury Schweppes, GROUPE DANONE
and many other companies.
 Evaluation

Does it include…?

Customers Products/ Services Markets

No Yes Yes

Technology Concern for survival Philosophy

No No No

Self-concept Concern for public image Employees

Yes No No

Does it mention values like…? Customer or product-

oriented?

Citizenship Teamwork Customer-oriented

No No Score

Excellence Integrity
 No No 1.5/4.5

Nestlé is the world’s leading nutrition, health and wellness company

based in Switzerland. It is the largest food company in the world
measured by revenues. Nestlé’s sells baby food, breakfast cereals, coffee,
confectionery, dairy products, frozen food, pet foods, yoghurt and
snacks. It owns several major consumer brands such as Stouffers,
Nescafe, Kit-Kat, Carnation, Nestlé Water, and many others.

Mission

Nestle mission statement 2013

“Nestlé is…
…the world’s leading nutrition, health and wellness company. Our mission of
“Good Food, Good Life” is to provide consumers with the best tasting, most
nutritious choices in a wide range of food and beverage categories and eating
occasions, from morning to night.”

(This evaluation framework is composed of the guidelines listed in our

article: Mission Statement for Success)

Nestle’s mission has scored 1.5 points out of 4.5, which is a very low
score compared to other companies’ missions. The statement includes
products and services, markets and self-concept concepts but lacks other
6 essential components. The company doesn’t mention any values, which
guides its actions, in the statement but provides them in addition to their
vision:

“To be a leading, competitive, Nutrition, Health and Wellness

Company delivering improved shareholder value by being a
 preferred corporate citizen, preferred employer, preferred supplier
selling preferred products.”

Nestle’s vision and values address more stakeholders than the original
mission and should be combined into it to provide more information
about the business. The vision and values statement additionally includes
concern for survival, public image and employees’ components that the
official statement lacks. The combined statement would better
communicate Nestle’s ‘reason for being’ in the business to its
stakeholders.

SWOT

Strengths Weaknesses

1. Unmatched research and development 1. Criticism over high water usage, selling contaminated
capability food, anti-unionism, forced child labor and using other
2. Strong geographic presence, with one of the unethical practices
best geographically diversified revenue 2. Contaminated food recalls
sources
3. Unrivaled product and brand portfolio
4. Environmental sustainability efforts
5. Ownership of some of the most recognizable
brands in the world
 Opportunities Threats

1. Clear and accurate labelling indicating of any
harmful products
2. Transparency in material sourcing
3. Growing number of small Silicon Valley
based food startups
4. Growing ready-to-drink (RTD) tea and RTD
coffee markets
1. Poor quality water and its scarcity
2. Increased competition in the beverage and food
industries
3. The price of coffee beans could significantly rise due to
major weather disasters

Strengths

1. Unmatched research and development

capability
According to Nestlé, one of its key competitive advantages is research
and development (R&D) capabilities.[1] The company spent CHF1.678
billion or US$1.697 billion on R&D in 2015. This accounted for 1.89% of
the total revenue. In comparison, The Coca Cola Company spent 0% of
its revenue on R&D and PepsiCo, Nestlé’s chief rival, spent only 1.2% or
just US$754 million of its revenue on R&D.

R&D expenditure Revenue % of revenue

Nestlé S.A. 1,697 89.772 billion 1.89%

PepsiCo 0.754 63.056 billion 1.20%

Mondelēz 0.409 29.636 billion 1.38%

 R&D expenditure Revenue % of revenue

Coca-Cola 0 44.294 billion 0%

Figure 1. R&D spending by the largest food and beverage companies (in
US$ billions)

Source: PepsiCo SWOT analysis[2]

Nestlé’s R&D capabilities also stem from its R&D network. The company
has the largest R&D centers’ network of any food or beverage company
in the world, with 34 R&D facilities and over 5000 people working in
them.

Nestlé’s superiority in R&D against its rivals provides a sustainable

competitive advantage and long-term success.

2. Strong geographic presence, with one of the

best geographically diversified revenue sources
Nestlé operates and sells its products in 189 countries, reaching almost
the entire world. The company has divided its operating segments into 3
geographic areas: The Americas (AMS), Europe, Middle East and North
Africa (EMENA) and Asia, Oceania and sub-Saharan Africa (AOA). None
of the regions earn over 50% of the total revenue.

Nestlé, unlike most of its rivals, does not rely on any single country or a
few different countries to generate most of its revenue. The U.S., which is
the single largest company’s market only generates CHF25.293 billion or
28.5% of the total revenue. The next largest market, China, generates
CHF7.06 billion or 8% of the total revenue.[1]

In comparison, PepsiCo and The Coca Cola Company earn 56% and 46%
of their revenue from the U.S. alone, respectively. [2] This proves that
Nestlé’s strong and diverse geographic presence, gives it a competitive
advantage over its rivals, especially when the U.S. market is negatively
affected.

Figure 2. Nestlé’s main markets

Country Percentage Revenue

United States 28.5%

China 8%

France 5.5%

Brasil 4.4%

United Kingdom 3.4%

Other 50.3%

Source: Nestlé’s annual report[1]

3. Unrivaled product and brand portfolio
Nestlé’s product portfolio is wider than any of its rivals in the industry.
The company offers over 2000 different product choices in 7 main
categories:[3]

 Powdered and liquid beverages. Brands include: Nescafé, Nescafé

Dolce Gusto, Nespresso, Nestea.
 Milk products and ice cream. Brands include: Nestlé, Dreyer’s,
Movenpick.
 Prepared dishes and cooking aids. Brands include: Maggi, Chef,
Buitoni, Stouffer’s, Wagner.
 Nestlé Nutrition. Brands include: Wyeth, Nan, S-26 Gold, Beba,
Lactogen.
 PetCare. Brands include: Purina, Friskies, Pro Plan, Felix, Gourmet.
 Confectionary. Brands include: Nestlé, KitKat, Cailler.
 Water. Brands include: Pure Life, S.Pellegrino, Vittel, Perrier.

Wide product portfolio allows Nestlé to better satisfy various consumers’

needs and target wider consumer segment. The company is also less
affected by the changing consumer tastes or consumer backlash against
one of its brands.

4. Environmental sustainability efforts

Nestlé prides itself on company’s sustainability efforts. The company’s
environmental initiatives have helped to reduce waste, packaging
material usage and to keep the environment cleaner.

Since 1991, the company has saved 500 million kg of packaging material
by redesigning its packages. Nestlé uses recycled materials and chooses
materials from renewable source whenever possible.
By 2016, 105 of Nestlé’s factories have reached zero waste in production,
one of the best results in the industry.

Few of the company’s rivals could match the company’s efforts in

sustainability, which result in lower production costs, cleaner
environment and happier communities.

5. Ownership of some of the most recognizable brands

in the world
Nestlé owns and markets a few well recognized brands, such as Nestlé,
Nescafé, Maggi, Purina, KitKat and Nan. According to Forbes [4] and
Interbrand[5], Nescafé brand is the 32nd and 36th most valuable brand in
the world, and is worth US$16.3 billion and US$12.5 billion, respectively.
Nestlé brand also ranks as the 49th and 56th most valuable brand in the
world in Forbes’ and Interbrand’s lists.

Brand value is closely related to brand recognition. Nestlé’s brand

recognition is also increased by its presence in 189 countries.

Brand awareness helps the company to introduce new products and sell
the current products more easily.

Weaknesses
1. Criticism over high water usage, selling contaminated
food, anti-unionism, forced child labor and using other
unethical practices
Being the largest food company in the world attracts lots of attention.
Most of that attention is criticism over the companies’ practices and
Nestlé is no exception to that.
Over the years, the company has been criticized for a number of its
practices:

 Unethical marketing of baby formula;

 Claims that water should be privatized;
 Asking for a debt payment from a famine struck country;
 Misleading labeling;
 Sourcing materials from suppliers using child and forced labor;
 Anti-unionism.
The latest criticism is over the company’s uncontrolled water usage in
California, where prolonged drought is hurting the state. California state
has experienced water shortages over the last few years and many
restrictions have been placed on businesses and residents to reduce their
water consumption. On the other hand, Nestlé, which drains the water
from aquifers in reservations’ areas, isn’t controlled by state laws and
does not have to restrict its water usage.[6] Nestlé’s inability to address
the communities’ needs and problems in California, but instead
increasing the problems even more, draws lots of criticism.

Negative publicity results in damaged brand reputation, lost consumer

confidence and declined sales. Few of the company’s rivals receive as
much criticism as Nestlé.

2. Contaminated food recalls

Nestlé is a huge food company selling tens of thousands of different
food products daily. Even with strict quality control measures the
company often has to recall its products in various markets due to some
form of contamination. In 2014, Nestlé recalled and destroyed 37,000
tons of contaminated Maggi noodles in India. This resulted in hundreds
of millions in lost sales and damaged brand reputation. Recently, the
company had to recall various prepared dishes in the U.S., which may
have contained pieces of glass. The company has to recall some of its
products almost monthly. Such negative publicity heavily affects Nestlé’s
business.

Opportunities
1. Clear and accurate labelling indicating of any
harmful products
According to the study done by Delloitte,[7] consumers are more likely to
buy products that are clearly and accurately labeled. Almost 62%
consumers are more likely to choose products that are free of any
harmful products. 51% of the surveyed said that their decisions will be
influenced by clear and accurate labelling and 47% would like to see
clearly displayed information.

Nestlé, which has a history of providing misleading nutritional

information on its labels should improve its practices and clearly label
the products and include all the necessary information in addition to
nutritional values.

2. Transparency in material sourcing

Consumers are becoming more and more conscious of where the food
came from and how it was grown or made. Many young consumers are
placing sustainability as an important decision making factor when
buying their food. Social responsibility of buying ethically grown,
sustainable foods is often more important that price.

Nestlé could start sourcing all of its materials from sustainably grown
plantations and farms.
3. Growing number of small food startups
There is a growing number of food startups that are looking for ways on
how to disrupt the food industry. According to CB Insights, [8] food
startups raised nearly US$5.5 billion in 2015, indicating a significant
support for the food startups. These new startups are developing the
next generation foods and drinks, provide various solutions on food
delivery, new meal kits, specialty foods and introduce new ways to grow
and sell the food.

In the current situation, where the established brands are losing sales
and the capital is still very cheap, Nestlé could increase its investments in
startups that will help the company to meet the future challenges and
increase the sales.

4. Growing ready-to-drink (RTD) tea and RTD coffee

markets
According to the Beverage Marketing Corporation Report, [9] RTD coffees
is the fastest growing liquid beverage sector in the U.S. for the last 3
years. While the whole beverage industry grew only slightly, RTD coffees
grew by a staggering 37%. Healthy beverages, such as RTD teas were
also growing over 4% annually.

Even though Nestlé is one of the biggest coffee sellers in the world, the
company doesn’t have any significant brands in RTD coffee or RTD tea
markets. The are many smaller brands that could be acquired in the
industry or the company could push its own RTD brands to the U.S.
market to take the advantage of the growing RTD sectors.
Threats
1. Poor quality water and its scarcity

Beverages, make over 25% of the total Nestlé’s sales and water is used in
all of their production. Bottled water products alone generate 8% of the
total company’s revenue.

Water is scarce and is becoming even more scarce due to the factors
such as climate change, growing populations, overexploitation of
resources, the increasing demand for food products, increasing pollution
and the poor management of waste water. Demand for water is
increasing, and it will likely become more difficult for Nestlé to access
both clean and inexpensive supplies of drinking water, resulting in
potentially increased production costs and therefore lower profitability.

The company also currently receives lots of criticism and negative

publicity over its high use of drinking water near the communities
suffering from droughts. In the future, water scarcity will likely become a
more significant problem that will negatively impact company’s
operations.

2. Increased competition in the beverage and food industries

According to Nestlé, competitive rivalry is one of the key threats

affecting the company. The beverage and food industries are highly
competitive and consist of numerous small, large and multinational
companies. Beverage, food and snack products compete primarily on the
basis of brand recognition, taste, price, quality, product variety,
distribution, advertising, packaging, convenience, service, marketing and
promotional activity, as well as the ability to anticipate and respond to
consumer trends.[1]
Food and beverage markets are growing very slowly and with so many
new startups, Nestlé will find it hard to compete in the future.

3. The price of coffee beans could significantly rise due to major

weather disasters

Coffee generates over 10% of the company’s total sales and coffee beans
are the major raw material used in its production. Therefore, Nestlé’s
profit margins are dependent, to some extent, on the price of coffee
beans, which over the past several years has been very volatile.

The major reasons for such price volatility are droughts, unusually high
or low temperatures and many other weather disasters in Brazil and
other coffee-growing countries. In addition to those factors, growing
demand has increased competition for the best quality coffee beans and
has pushed the prices up significantly.

Sources

1. Nestlé (2017). Annual report 2015. Available at:

http://www.nestle.com/asset-library/documents/library/documents
/annual_reports/2015-annual-review-en.pdf Accessed 6th January,
2017
2. Strategic Management Insight (2017). PepsiCo SWOT analysis 2017.
Available at: https://strategicmanagementinsight.com/swot-
analyses/pepsico-swot-analysis/ Accessed 6th January, 2017
3. Nestlé (2017). Brands. Available at: http://www.nestle.com/brands
Accessed 6th January, 2017
4. Forbes (2017). The World’s Most Valuable Brands. Available at:
http://www.forbes.com/powerful-brands/ Accessed 6th January,
2017
 5. Interbrand (2017). Best Global Brands 2016. Available at:
http://interbrand.com/best-brands/best-global-brands/2016/rankin
g/ Accessed 6th January, 2017
6. Smith, S. E. (2015). 5 shocking scandals that prove it’s time to
boycott Nestlé. Available at: http://www.dailydot.com/via/nestle-
california-bottled-water/ Accessed 6th January, 2017
7. Renner, B., Ringquist, J. (2016). Consumer Trends in The Food
Industry. Available
at:https://www2.deloitte.com/us/en/pages/consumer-business/arti
cles/us-food-industry-consumer-trends-report.html Accessed 6th
January, 2017
8. CB Insights (2016). The Periodic Table of Food Tech. Available
at:https://www.cbinsights.com/blog/periodic-table-food-tech-
startups/ Accessed 6th January, 2017
9. Beverage Marketing Corporation (2016). Press Release: The U.S.
Liquid Refreshment Beverage Marketing Accelerated in 2015,
Reports Beverage Marketing Corporation. Available at:
http://www.beveragemarketing.com/news-detail.asp?id=335
Accessed 6th January, 2017
191365880

Last updated: Aug 01, 2022

 Company: Nestle AG
 CEO: Ulf Mark Schneider
 Year founded: 1905
 Headquarter: Vevey, Switzerland
 Number of Employees (FY21): 276,000
 Public or Private: Public
 Ticker Symbol: NESN | NSRGY
 Market Cap (Jul 2022): $337.86 Billion
 Annual Revenue (FY21): $ 87.47 Billion 
 Profit | Net income (FY21): $16.91 Billion

 Products & Services: Ambient Dairy | Chilled Dairy | Coffee | Bottled Water | Juices |
Culinary and Foods | Confectionary | Baby Food | Breakfast Cereals
 Competitors: Mars | Mondelez | Hershey | Ferrero | Godiva | Pepsi co | Lindt | Kelloggs

Fun Fact:
 Did you know that Nestle is one of the largest food companies in the world
that sells its product in 186 countries ?

Table of Contents

 An Overview of Nestle
 SWOT Analysis of Nestle
 Nestle’s Strengths
 Nestle – Revenue by product segments
 Nestle – Revenue by Regions
 Nestle’s Weaknesses
 Nestle’s Opportunities
 Nestle’s Threats
 Recommendations
o Related posts:

An Overview of Nestle
Founded in 1905 as a result of a merger of Anglo-Swiss Milk Company, Nestle was first
formed by Henri Nestlé in 1866. Nestle became the worlds’ largest Swiss packaged food
company in a short span of time. With more than 150 years of stability in the market, Nestle
has marked its strong position as top nutrition, health, and Wellness Company. Ulf Mark
Schneider currently holds the position of CEO at Nestle.

Whether its dairy products, chocolates or juices, Nestle is always there in our everyday
purchases. It’s “Good Food, Good Life” slogan has served it right, touching millions of
people worldwide, both physically and literally.

It makes more than $1.1 billion of revenues a single day. Now you can imagine how big this
company really is!

Find out more interesting facts about Nestle in this article and get some insights about the
company through its SWOT analysis.
Key facts about Nestle

SWOT Analysis of Nestle

The following is the SWOT analysis of Nestle:

Nestle’s Strengths
1. Largest Food Company

With a market capitalization of $330+ Billion, Nestle has been one of the largest food
companies in the world with the sales of its Hot Pockets, Stouffer’s, DiGiorno, and
Nespresso etc. 

2. Reputed brand name

 Nestle is the most renowned brand in the world. It has developed a respected reputation
in the food and beverages sector offering high-quality products for everyday use across the
globe.

3. Brand valuation

Nestle is well positioned for growth. In 2021, Nestle ranked at #62 position by Interbrand –
with a brand value of $10.6 billion, moved up 1 place compared with 2020. [1]

Nestle is preceded by 

 #28 – Pepsi (Brand value: $19.4 billion) 

 #51 – Starbucks (Brand value: $13.0 billion)
 #65 – Danoe (Brand value: $9.8 billion) 
 #72 – Kellogg’s (Brand value $8.6 billion)
4. Highly diversified portfolio

Nestle owns more than 2000 brands globally and renovated over 8000 products. It is one of
the worlds’ biggest companies with the broadest and diverse product portfolio.

Nestle divides its products into 7 different categories:

 Powdered and Liquid Beverages—this is the largest segment of Nestle and represents
about 28% of total revenue. This segment sells soluble coffee and other beverages such as
tea and chocolate powder. Signature brands include Nescafe, Nespresso, Starbucks
coffee (license deal), Blue Bottle Coffee, Milo, and Nestea.

Image source: Nestle

 Petcare – second largest segment of Nestle and represents about 18% of total revenue.
This segment sells pet food & toy brands Purina, Lily’s Kitchen, Tails, and Merrick.
 I
mage source: Nestle
 Nutrition and Health Science – represents about 15% of total revenue. This segment sells
products such as vitamins, minerals and supplements that help to promote health and
wellness. Signature brands include Illuma, Gerber, Nestum, Cerelac, Beba, Lactogen,
Garden of Life, Pure, and Vital Proteins.

I
mage source: Nestle

 Prepared dishes and cooking aids – represents 14% of total revenue. This segment sells
frozen food, chilled prepared food, culinary and cooking aids. Signature brands include
Maggi, Original Waggner, Lean Cuisine, Chef, Sweet Earth and Freshly.

I
mage source: Nestle
 Milk products and ice cream – represents 12% of total revenue. This segment sells milk
products and ice cream products under the brand names of Nido, Nesvita, Carnation,
Lattiere, Coffee Mate, Hagen Dazs, and Movenpick.
 I
mage source: Nestle
 Confectionery – represents 9% of total revenue. This segment sells chocolate, sugar,
candies, snacks and biscuits. Signature brands include KitKat, Cailler, and Garoto.

I
mage source: Nestle
 Water products -represents 5% of total revenue. Signature brands include Pure Life,
S.Pellegrino, Vittel and Perrier.

Segments Revenue (CHF billion) % Share

Powdered and Liquid Beverages 24 28%

PetCare 16 18%

Nutrition and Health Science 13 15%

Prepared dishes and cooking aids 12 14%

Milk products and Ice cream 11 12%

Confectionery 8 9%

Water 4 5%

Total 87 100%
 Segments Revenue (CHF billion) % Share

Image source: Nestle

Nestle - Revenue by product segments

5. Global presence

Nestle has a strong global presence, and its products are sold in almost everywhere in the
world. Nestle sells its products in 186 countries Instead of relying on a few markets, it has
captured the sizeable market in a lot of developed and developing countries to earn most of
its revenue. [2]

 Americas is Nestle’s largest market and represents about 44.9% of total sales. The United
States and Canada account for 70% of sales in this region, while Latin America and the
Caribbean account for the other 30%.
 Europe, Middle East & North Africa (EMENA) is the second largest market and accounts
for about 29.6% of total revenue. 64% of regional revenues are from Western Europe, 18%
are from Eastern and Central Europe, and 18% are from the Middle East and North Africa.
 Asia, Oceania, and sub-Saharan Africa (AOA) represent the rest 25.5% of its total
revenue of Nestle. ASEAN markets (The Association of Southeast Asian Nations) account
for 34% of regional sales, Oceania and Japan account for 15% of regional sales, Other
Asian markets account for 39% of regional sales, and Sub-Saharan Africa accounts for 12%
of regional sales.
Looking at individual countries, the United States is the largest market for Nestle and
represents about 30% of total revenue, followed by the Greater China Region (#2 largest
market, representing about 6% of total revenue), France (#3 largest market, represents
about 4% of total revenue), United Kingdom (#4 largest market, represents about 4% of
total revenue), and Mexico (#5 largest market, representing about 3% of total revenue).
 Nestle - Revenue by Regions
Regions Revenue (CHF billion) % Share

Americas 39 45%

Europe, Middle East and North Africa (EMENA) 26 30%

Asia, Oceania and sub-Saharan Africa (AOA) 22 25%

Total 87 100%

6. World’s largest corporation

According to the Forbes Global 2000, Nestle is among the world’s largest

corporations and is ranked at 46th position in 2022 list.[3]

7. Health focused Breakfast

The world’s leading food conglomerate, Nestle, has reduced the amount of sugars (by
25%) used to produce its beloved Carnation Breakfast Essentials. Moreover, the company
is also incorporating a completely new and environment-friendly paper packaging for the
product line to enhance its sustainability.

The company is undoubtedly checking all the right boxes when it comes to things most
important for shoppers. Plus, it’s also a fact that a lot of these shoppers have grown up
enjoying the Carnation Breakfast Essentials line of products and want their kids to enjoy
them too. [4]

8. License deal with Starbucks & strong relationship with other brands

Nestle has entered into a perpetual license deal with Starbucks to market its products
globally. The deal strengthens Nestle’s coffee portfolio and provides Starbucks an
opportunity to use Nestle’s network for global expansion. In addition, Nestle has well-
established relationships with other trusted and powerful brands like Colgate
Palmolive, Coca Cola, General Mills, and L’Oréal. 

9. Efficient R&D system

Nestle has the world’s largest food and nutrition research organization with 21 R&D centers
Its research and development capability is one of its key competitive advantages.
There are more than 5000 employees involved in R&D operations. Recently, Nestle
expanded its operations in the Greater China region to 3 R&D centers and 4 product
innovation centers.[5]

10. Environmental sustainability practices

Nestle puts substantial efforts in environmental sustainability practices and take innovative

initiatives in improving its quality of products. It optimizes advanced solutions to reduce
waste, water usage, non-renewable energy use, and packaging material usage.

The company pledged to net zero greenhouse gas emissions by 2050. Also,

deforestation free supply chain and aims to cut virgin plastics by one-third (by 2025). [6]

11. Large distribution system

Nestle owns an extensive and diversified distribution system that is not only penetrated in
urban areas but also rural regions. It has adapted local distribution methods
and decentralized approach to run the business efficiently in respective countries. Nestle
has strong relationships with suppliers, retailers, vendors, and distributors.

Nestle’s Weaknesses
1. Increase in prices

Nestle has increased prices by 6.5% on a certain category of their consumer goods. The
price increase is due to an increase in raw material and transportation costs, supply chain
constraints, and an overall inflationary environment.

2. Span of control and organizational structure

Nestlé is organized in a matrix structure. That means a large number of brands are under
the same umbrella group which makes it somewhat challenging to manage a large number
of individual brands, which can often result in discord and conflict of interest.

3. Water controversy

Nestle was accused of pumping millions of liters of water from the Canada reserve, where
residents are deprived of drinking water.

4. Social criticisms

Nestle has become a target of media attention many times. The claim to privatize water,
misleading labeling, and a lawsuit for chocolate making using child and slave labor are
some of the examples that have to weaken its market reputation.
5. Maggi Noodles controversy

In 2017, Nestle failed to clear a laboratory test in India. This created a publicity hype as
people boycotted Nestle, leading to the loss of 80% of market share in the country. Nestle
claimed ‘No added MSG’ in the Noodles packets. However, 1000 times more lead was
found in the product after testing.

6. Racially Insensitive Product Names

Nestle has been criticized for perpetuating racism using racially insensitive names on its
products. In Australia, Nestle has been under pressure to stop advancing racism with its
sweets named Red Skins and Chicos and recently announced that it will change the name
of two confectionery products. [7]

7. Unhealthy Products

Nestle’s history consists of a long list of products that threatened consumers, such as China
Milk Scandal and tainted cookie dough. Consumers distrust companies that have sold
unhealthy products in the past. [8]

Nestle’s Opportunities
1. Venturing small food start-ups

Nestle has a fantastic opportunity to grow the number of small food start-ups under its
popular brand name. Nestle can also collaborate with the new start-ups to promote its brand
name.

2. Online shopping

Nestle has a remarkable opportunity to boost its e-commerce sites and online shopping

platform. A very few CPGs are offering online services to make the shopping experience
more comfortable and pleasant. Although, Nestle has its online stores in a few countries,
expanding its online services to more areas will prove a rewarding decision for the
company.

3. Market penetration for breakfast cereals

Nestlé’s cereals and oats market have shown fast growth in recent years. Thus, penetrating
this market more would be highly lucrative for the company.

4. Expanding ready-to-drink tea and coffee market

The demand for tea and coffee is continuously on the rise, rendering a profitable opportunity
for Nestle to groom this market more.
5. Partnerships

Strategic alliances with other food and beverage giants are also a great opportunity for the
company to increase its revenues and profits.

6. Authentic labeling

Nestle has already been criticized for giving misleading nutritional information on its labels.
So, there’s an opportunity to improve its practices by giving trustworthy information and
accurately labeling its products.

7. Expand through Acquisitions

In 2019, Nestle offloaded several low-performing brands like Herta Charcuterie and is
switching to acquisitions. The company has acquired gastrointestinal medication brand
Zenpep and the better health company recently. Expanding portfolio with high performing
SMB acquisitions offers immense opportunities for Nestle to grow. [9]

8. Refocus on Profitable Ventures

Having too many brands can stretch a company’s resources to the limit and undermine
overall performance. Nestle has been grappling under the weight of too many unprofitable
brands and is seeking to sell its North American water brands like Pure Life and shift focus
on strengthening the best and highly profitable brands in its portfolio. [10]

9. Nestle introduces “Vuna” a vegan substitute for Tuna

After being under fire for producing unhealthy foods, Nestle seems to be gravitating towards
healthier and plant based food categories targeting a more health and environment-
conscious target audience. Nestle claims that Vuna is the result of the futuristic food
technology the company is working on.

After the successful launch of Vuna, Nestle also stated that it will work on bringing more
vegan-based food items, especially in the protein sector. For example, Nestle will soon
launch vegan alternatives for dairy products such as eggs and other seafood items such as
shrimps.

Nestle’s Threats
1. Price fluctuations by retail giants

Nestlé’s grocery sales are achieved majorly through huge retail giants
like Walmart, Tesco, Target and Kroger. Any reduction or increase in prices by these
retailers can affect Nestlé’s sales and its profitability. 
2. Illegal rainforest destruction controversy

In 2017, Nestle was alleged of involvement in the illegal destruction of Sumatra’s last tract

of rainforest. It faced severe criticisms from NGOs and environmentalists in this regard.

3. Water scarcity

Nestlé’s production is highly dependent on water usage. Accessing the clean water through
less costly sources has become difficult for the company due to many reasons. These
include increasing population, climate change, growing demand for food and water,
increasing pollution, water wastage, and overexploitation of resources.

4. Rising competition

Many CPG companies like Mondelez and Unilever offer similar food and beverage

products. It is hard for Nestle to compete in such a situation where the substitute
products are easily accessible.

5. Government regulations

Government regulations can affect the business operations of Nestle. Additionally, the

increasing prices of commodities force the company to increase the prices of its products. It
will lead to sales reduction as consumers can switch to other brands which are available at
low costs.

6. Economic Uncertainty

Even though, Nestlé’s sales were not drastically impacted during the pandemic due to panic
buying catalyzed by recent events. The company’s revenue is still threatened by economic
uncertainty and recession in the global markets. [11]

7. Haunting Dark Past

The US Supreme Court is reviewing whether to open human rights probe against Nestle
subsidiary for knowingly helping to perpetuate slavery in cocoa farms in the African nation
of Ivory Coast. Even though the events occurred over a century ago, Nestlé’s racist past
can haunt the company and affect its sales, profitability, and growth for years to come. [12]

8. Under Fire for Printing Hindu God Image on Wrapper

In a flurry of heated emotions and complaints, Netizens accused Nestle India of playing with
citizens’ religious sentiments. The company came under fire after printing the photograph
of different Hindu gods on wrapper.  Citizens also stated that the wrappers will ultimately be
disposed off in trash cans, which is blatant and utter disrespect of their gods. Nestle has
since apologized for the controversy, claiming that it was never their attention to disrespect
the Hindu religion.
 Swot analysis of Nestle

Recommendations
Nestle is quite successful in the CPG market. However, there are still some areas where it
can improve to strengthen its market standing.

Some recommendations are:

1. Bringing innovation in the company’s offerings.

2. Growing the number of start-ups in the food and beverage industry.
3. Upgrading its online services to create a unique competitive advantage in the CPG
4. Improving its production and operational procedures.
5. Using authentic raw material to avoid outcry from environmental and social activists.
6. Settling the media scandals and controversies to stand by with a positive reputation.
7. Participating in CSR activities and upholding its sustainability practices.

 References & more information

1. Nestle. Interbrand
2. Nestle. At a glance
3. Forbes Ranking. Company Profiles: Nestle S.A. Forbes
4. Christopher Doering. (2022, Jan 13). Nestlé cuts sugar, adopts more sustainable packaging
for Carnation Breakfast Essentials. Food Dive  
5. Nestle S.A. (2020, April 24). Nestlé reports three-month sales for 2020, provides COVID-19
update. Globe Newswire
6. Barbiroglio, E. (2020, January 16). Nestlé Wants To Take A Break From Virgin Plastics.
Forbes
7. Pandey, S. (2020, June). Nestle to rename Aussie candies amid race debate. Reuters
8. Andrei, M. (2020, January 28).  Why Nestle is one of the most hated companies in the
world. ZME Science
9. Gelski, J. (2020, Feb. 2). Nestle shifts focus to acquisitions in 2020. Food Business News
10. Koltrowitz, S. (2020, June 11). Nestle explores the sale of Pure Life in an overhaul of the
water business. Reuters
11. Ryan, C. (2020, April 24). Nestlé Can Weather Economic Storm Even After Panic Buying
Stops. The Wall Street Journal
12. White, L. (2020, July 2). U.S. Supreme Court takes up Nestle, Cargill appeals over human
rights claims. Reuters

Choosing the best alternative

The best alternative is not by implementing one solution but a list of
solution according to their category or division. The following categories need
to be addressed in order to provide the best possible
solution:
Product
:

Meeting consumer expectations

Ensuring an affordable yet healthy product

Maintain a consistent standard

Improve quality control
Marketing
:

Invest more in advertising

Invest more in public relations especially for bad publicity

Should become more actively involved in fund raisers and charitable
institutions

Be more transparent with product values

Discussion questions

What have been the key success factors for Nestlé?

Global brand strategy
:
Nestlé has products that resonate all over the world under a unified brand.
These brands have the reputation of a "global food company" and the
products have their own specific attributes.
Best quality at the lowest cost
:
The quality standard of Nestlé made it a differentiator. Nestlé goes to great
lengths to enhance their relevance to consumers when considering the taste,
appearance and price of their products. Nestlé's existing products grow and
succeed through renovation while maintaining a balance of quality in
geographic activities and product lines.
Highly developed HR (Human Resource) department
:
Nestlé regards its personnel as its most valuable asset. The HR department of
Nestlé takes great care and precaution when hiring personnel. Management
of Nestlé believes in open door policy and highly discourages bureaucracy in
the operational process and believes that a happy employee is a productive
employee.
Localization amidst globalization
:
Nestlé has successfully achieved localization in the increasingly globalized
food industry. (Product planning, production, marketing and services form a
strategy of localization)
Need the answer?