Nestlé is the world’s largest food company by market value: Over 1.25 billion of its products are consumed every day. Headquartered in Switzerland and operating in over 80 countries, it employs nearly 300,000 people and sells a huge range of products. With over 6000 brands including Nespresso, Perrier, Kit-Kat, Häagen-Dazs, Cheerios, Buitoni, and Felix, chances are that pretty much every Western household is a customer. Twenty brands each have sales of over CHF 1 billion a year. Tracing its history back to 1867, Nestlé now also owns around a quarter of L’Oréal, the world’s largest cosmetics company, and is part of major joint ventures including Cereal Partners with General Mills, Beverage Partners with Coca-Cola and Dairy Partners with Fronterra.
Foremost amongst all of the major food and drink companies, Nestlé aims to be ‘the world’s leading nutrition, health and wellness company and the industry reference for financial performance.’ Judging by the past few years, it has been doing a good job of this. It has clearly positioned itself as the company that marries nutrition and taste across the range, has topped $100 billion in sales, and has increased profits by over 400% in the past five years.
The health focus for Nestlé has been a long-standing platform, and one that, over the past decade, has become more prominent. Through education, improved ingredients, and the launch of new products, the company is seeking to shift consumers away from obesity-fuelling foods and beverages towards healthier products. Sanjay Sehgal, head of Nestlé’s Corporate Wellness Unit, sees that its global R&D infrastructure and closeness to markets have positioned the company at the center of a contemporary drive for increased nutrition: ‘From 2003 onwards, Nestlé was the first company in the food industry to put comprehensive policies in place for the systematic reduction of specific nutrients that are considered to be detrimental to health when consumed in excess, and also to offer consumers more essential nutrients or nutritious ingredients.’
And the focus on Nestle is not just about nutrition but also about the sustainability of the communities within which it operates. Starting in 1995 with environmental reporting, in 2001 Nestlé began reporting on issues related to rural development and particularly farmers, employees, and economic development in Africa and Latin America. Since 2007, under the ‘Creating Shared Value’ banner, Nestlé has made a big push toward creating value not just for its shareholders, but also for ‘the societies in which it operates.’ The focus is on creating shared value across three linked areas of risk and opportunity: water, nutrition, and rural development.
The proximity to the consumer of R&D, manufacturing and distribution, helps the company deliver global platform products with high local relevance. Through its close collaboration with local farmers, manufacturers and distribution mechanisms, Nestlé demonstrates a unique and vertically integrated view on developing ethical, nutrition-rich products that competitors find difficult to match.
Nestle provides a leading example of how a focus on sustainability and nutrition can create value both for its shareholders and for the communities within which it operates at the local level.