Introduction of Nestle

 

Introduction of Nestle  NESTLE, is one of the top class & leading products manufacturing company in worlds, which starts its operation in 1866 by Henri Nestlé and is today the world's biggest food and beverage company. Nestlé employs around 250,000 people from more than 86 countries and has factories or operations in almost every country in the world. The history of Nestlé began in Switzerland in 1867. Henry Nestle, a chemist from Frankfurt who had settled in Vevey, became interested in infant feeding. feeding. To satis satisfy fy a clear need, he developed developed and produced produced a milk-based food for babies whose mothers could not nurse them. The new product soon became well-known worldwide under the name of “Farine Lactee Nestle ( Nestle Milk Food )”.In order to expand into a broader  category and meet more people’s needs, the Nestle Company’s first diversification occurred in 1905 1905 wh when en it me merg rged ed wi with th th thee Angl Anglo-S o-Swi wiss ss Co Conde ndense nsedd Milk Milk Comp Compan anyy (1 (1866 866). ). Today Today,,  processing milk food is still the company’s chief activity together with the other products of   Nestle family such as chocolates, instant milk-based drinks culinary products, frozen foods, ice cream, dairy products, and infant foods. Nestle is still primarily concerned with the field of  nutrition, but it has also acquired an interest in pharmaceuticals and cosmetics industries. As a result of the company’s initiative and bold activity, it has grown into a huge organization, nearly 500 factories worldwide. Nestle products are now widely distributed on all continents and sold in more than 100 countries. Evolution of Nestlé: 1867: Henri Nestle founded the company in Vevey, Switzerland. 1898: Nestle purchases its first factory outside of Switzerland- Viking Milk factory in Norway. 1905: Nestle merges with Anglo-Swiss Condensed Milk company. 1929: Nestle merges with Peter-Cailler Kohler chocolates Suisse S.A. 1938: Nestle launches Nescafe – the world’s first instant coffee. 1947: Nestle merges with Alimentana S.A. with the brand Maggi. 1962: Nestle purchases Findus. 1974: Nestle becomes a significant shareholder in the cosmetics company L’Oreal. 1977: Nestle purchases Alcon, manufacture of eye care products and kits. 1985: Nestle purchases the food company carnation. 1988: Nestle purchases the confectionary company Rowntree Mackintosh and pasta company Buitoni –Perugina. 1992: Nestle purchases the mineral water company, Perrier. 1998: Nestle purchases Spillers pet foods business. 2000: Nestle sells the find us brand in all countries except for Switzerland. 2001: Nestle merges with Ralston Purina, the premier pet food company in North America, and with unique expertise in the dry dog food area.

 

NESTLE IN India NESTLÉ's relationship with India dates back to 1912, when it began trading as The NESTLÉ AngloAng lo-Swi Swiss ss Con Condens densed ed Milk Milk Compan Companyy (Exp (Export ort)) Limite Limited, d, import importing ing and sellin sellingg finish finished ed  products in the Indian market. After India's independence in 1947, the economic policies of the Indian Government emphasized the need for local production. NESTLÉ responded to India's aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted  NESTLÉ to develop the milk economy. Progress in Moga required the introduction of   NESTLÉ's Agricultural Services to educate advice and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans.  NESTLÉ set up milk collection centers that would not only ensure prompt collection and pay fair   prices, but also instill amongst the community, confidence in the dairy business. Progress involved invol ved the creati creation on of prosperity prosperity on an on-going and sustainable sustainable basis that has resulted in not  just the transformation of Moga into a prosperous and vibrant milk district today, but b ut a thriving hub of industrial activity, as well.  NESTLÉ has been a partner in India's growth for over a century now and has built a very special relationship of trust and commitment with the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million  people including farmers, suppliers of packaging packa ging materials, services and other goods. The Company continuously focuses its efforts to better understand the changing lifestyles of  India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings. The culture of innovation and renovation within the Company and access acc ess to the NES NESTLÉ TLÉ Gro Group' up'ss prop proprie rietar taryy techno technolog logy/B y/Brand randss experti expertise se and the extensi extensive ve centralized centra lized Research and Develo Development pment facilit facilities ies gives it a distinct distinct advantage in these efforts. It helps the Company to create value that can be sustained over the long term by offering consumers a wide variety of high quality, safe food products at affordable prices.  NESTLÉ India manufactures produ products cts of truly international quality under internationally famous  brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and and NE NEST STEA EA and and in re rece cent nt year yearss th thee Comp Compan anyy ha hass al also so in intr trod oduc uced ed pr prod oduc ucts ts of da dail ilyy consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi, and  NESTLÉ  NESTLÉ Jeera India Raita. is a responsible organization and facilitates initiatives that help to improve the quality of life in the communities where it operates.

 

Presence Across India

  After more than a century-old association with the country, today, NESTLÉ India has a presence across India with 8 manufacturing facilities and 4 branch offices.NESTLÉ India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1992; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh). The 4 Branch Offices located at Delhi, Mumbai, Chennai, and Kolkata help facilitate the sales and marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana.

Brands & Products of through Nestle:there brands. Their portfolio covers almost every food and Most people know Nestle  beverage category – giving consumers tastier and healthier products to enjoy at every eating occasion and throughout life’s stages including times of special nutritional need. Here is a sample of some of our brands.    

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Baby food: Cerelac, Gerber, Gerber Graduates, NaturNes, Nestum Bottled water: Nestlé Pure Life, Perrier, Poland Spring, S.Pellegrino Cereals: Chocapic, Cini Minis, Cookie Crisp, Estrelitas, Fitness, Nesquik Cereal Chocolate & confectionery: Aero, Butterfinger, Cailler, Crunch, KitKat, Orion, Smarties, Wonka Coffee: Nescafé, Nescafé 3 in 1, Nescafé Cappuccino, Cappuccino, Nescafé Nescafé Classic, Classic, Nescafé Decaff,  Nescafé Dolce Gusto, Nescafé Gold, Nespresso Nespress o

 

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Culinary, chilled and frozen food: Buitoni, Herta, HotPockets, LeanCuisine, Maggi, Stouffer's, Thomy Dairy: Carnation, Coffee-Mate, La Laitière, Nido Drinks: Juicy Juice, Milo, Nesquik, Nestea Foodservice: Chef, Chef-Mate, Maggi, Milo, Minor’s, Nescafé, Nestea, Sjora, Lean Cuisine, Stouffer's Healthcare nutrition: Boost, Nutren Junior, Peptamen, Resource Ice cream: Dreyer’s, Extrême, Häagen-Dazs, Mövenpick, Nestlé Ice Cream Petcare: Alpo, Bakers Complete, Beneful, Cat Chow, Chef Michael’s Canine Creations, Dog Chow, Fancy Feast, Felix, Friskies, Gourmet, Purina, Purina ONE, Pro Plan

NESTLE ENERGY DRINKS

Product name

Milo

Product type

Malted dairy milk 

Owner

Nestle

Introduced

1934 (85 years ago)

Markets

Worldw Worl dwid ide; e; most most no nota tabl blyy th thee re regi gion onss of  South-east Asia and Asia and certain parts of Africa

 

Tagline

MILO EVERYDAY!

Introduction to Milo Milo brand is the world’s leading chocolate malt beverage that can be prepared with hot or cold mi milk lk or w wat ater er,, ppro rodu duce cedd b y Ne Nest stle le an andd origin ating fro from m Aust Austra rali lia.i a.i t w a s de deve velo lope pedd by Thomas Mayne in 1934. Milo has got its name from the famous Greek athlete MILO of Crotona, after his legendary strength. It offers essential vitamins and minerals to meet the nutrition and energy demands of young bodies and minds. It has long been known as an energy beverage strongly associated with sports and good health.   Initially launched in Australia in the early 1930s, now it is marketed and sold in many countries Milo maintains significant popularity in a diverse range territories, including Malaysia Malaysia, , Singapore Singapore, , Brunei Brunei, , Philippines, Philippines Indonesia , Chile, Chile Colombia, Colombia , SriofLanka Lanka, , Peru Peru and  and Central Central and  and West Africa Africa.. Most commonly sold, Indonesia, as a powder in a, green tin, often depicting various sporting activities, Milo is available as a premixed beverage in some countries, and has been subsequently developed into a snack. Milo is added to hot or cold milk to give it a malted chocolate flavor and extra texture. When combined with cold milk, it retains the gritty texture of its raw state. Milo can be stirred into steamed milk or hot water to create something similar to hot chocolate or cocoa, sugar can be adde addedd to the mi milo lo beve bevera rage ge,, but many many peopl peoplee en enjo joyy it witho without ut the ad addi diti tion on of swe ete ner s, appreciating it for its subtle chocolate flavor. Another possible use is making a normal nor mal cup of col coldd Milo Milo and microw microwavi aving ng it for approx approxim imate ately ly 40–60 40–60 se co nd s. This gives the milo drink a biscuit cover on top. Another popular use is to ss pp rr ii nn kk ll ee d i to no nbre i cakfas efast - c rt ecerea m ,ls.e. sMi p eloc iis l ytennv the a ne i favore l l aored i cdebever - cverag r e age a me .for M the l o Tim c a nTam a l s Slam. o b e. break cea reals Milo isa lofte of th fav be tihe Slam Also very popular is the "Magic Milo" which involves adding Milo to a small amount of milk with sugar and whipping it to increase the amount of  a i r i n t h e m i l k , th there ereby by ddou oubl blin ingg it in siz size. e. Then Then on onee ad adds ds sma small ll amou amount ntss of hhot ot w wat ater er and and milk in layers st i rri n g e a c h ne w l a ye r vi gor ousl y t o m a i nt a i n i t s l i ght ne ss. A final layer of whipped cream topped with extra Milo or chocolate sprinkles. This is more of a 'warm' beverage rather than a 'hot' one and is a more popular version of hot Milo for  children. Essential vitamins and minerals in Milo products include:    

Calcium for strong teeth and bones Iron to carry oxygen to the body’s cells Vitamin forand healthy VitaminsaB1 B2 toeyesight help release energy from foods

 

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Vitamin C to keep skin and gums in good shape

History In 1934, Australian industrial chemist and inventor Thomas Mayne developed Mayne developed Milo and launched it at the Sydney Royal Easter Show Show.. Milo began production at the plant located in Smithtown Smithtown,, near Kempsey Kempsey on  on the North Coast of New of  New South Wales Wales.. The name was derived from the famous ancient athlete Milo of  Croton,, after his legendary strength. Croton

Manufacture Milo is manufactured by evaporating the water content from thick syrup at reduced pressure. The thick  opaque syrup is obtained from malted malted wheat  wheat or or barley  barley that  that is sourced from companies that produce these raw products. In 2016, Nestle Philippines stated that it will begin to produce Milo using its "protomalt" formulation sometime in 2017. The protomalt is composed of carbohydrates derived from barley and cassava.. cassava

Consumption Milo is consumed all around the world in different different forms and ways. Milo manufactured manufactured outside Australia is c ust omiz ed for the loca l me tho d o f   preparation. It often consumed as a flav flavore oredd bever beverage age wi with th Ti Tim m Tam Tam Sl Slam am,, sp spri rinkl nkled ed on ic icee-cre cream am,, break breakfa fast st ce cerea reals ls.. Milo manufactured outside Australia is customized for local methods of preparation. In some parts of Asia like Malaysia, Brunei, etc. at it is served ice added and isand known as "IcedItMilo" "Milo Ais"). IcedSingapore, milo is even available fast food with restaurants suchtoasitKFC McDonald's. is alsoorserved locally in versions such as "Milo " Milo Dinosaur " (a cup of Milo with an extra spoonful of undissolved Milo  powder added on top of it), "Milo Godzilla Godzilla"" (a cup of Milo with ice cream and/or topped with whipped cream)"Neslo" (combined with Nescafé with Nescafé powdered  powdered coffee) and ""Milo Milo Mangkuk " (Iced Milo that is served with plastic and put it inside a bowl). The Milo powder is also usually used in the making m aking of Batik cake cake.. It is also sometimes used as an alternative to jam and spread on bread or also as an ingredient in Roti Canai Canai,, and is usually called "Roti Milo".

Market Trend and Competitor Analysis In healthlargest food drink was amarket. USD 860 Million marketsgoing in 2017, which makes it one of India, the world’s healthmarket food drink TheMillio HFDnmarket through a curious phase of change in market dynamics. The category has grown at a good pace of 10% year over a year  till 2015-16, since then the volumes have remained stagnant. But on the other hand, it is  projected to reach $ 1.76 billion by 2023, backed by increa increasing sing demand for health drinks, owing owi ng to grow growing ing cons consume umerr pref preferen erence ce for milk with dairy additives such as malt. Rising Rising standard of living has resulted in changing consumers mindset, with people moving from savings to spending on lifestyle, healthcare food products, and services. Rapid urbanization is driving consumerism in Tier-II & Tier-III cities and this is expected to propel growth in the market for  malted food drinks across the country. The spending power of consumers is projected to surge, leading to premiumization of the consumer goods market in India due to continuously rising percapita income. Growing awareness about health benefits of malted food drinks, increase in working population, and growing organized retail & e-commerce sectors are some of the other  factors that are expected to boost sales of malt malted ed food drinks in the coming years. Moreover,

 

increasing penetration in rural areas and the rising demand for innovative flavors are also expected to aid the country’s malted food drinks market over the course of the next five years. The current market for HFD can be segmented broadly into two parts i.e cocoa and noncocoa products. The popular flavors are chocolate, plain malted and vanilla. Chocolate, by far  dominates the market is a hot favorite among children of all age groups.

The main players in the market are :       

Glaxo SmithKline Consumer Healthcare ( GSK) – Horlicks and Boost

Mondelez International – Bournvita, H.J Heinz – Complan Abbott Nutrition – Pediasure. Recently Nestle has relaunched its brand Milo in ready to drink format Danone –Protinex. Several other brands are Enfagrow, Viva, Amul Pro, Powervita

Horlicks is the leader in the Rs5,500 crore health food food   catego category ry in Ind India, ia, with an est estima imated ted market share of 65% by volume and 56.3% by value as of March 2017. share of

 

Distribution of the health food drinks market across India in 2017

NESTLE BCG MATRIX The BCG matrix, also known as Boston consulting group matrix is used to determine the priority that needs be given to various products of Nestle. The matrix assumes that an increase in market share will increase the revenue generation for the company. The matrix is divided into four boxes with two axis. The four units in the matrix are: Dog Cash cow Star Question The two axis in the matrix are: Market Growth Rate Relative Market Share    

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1) Star It represents high market share and high market growth, having high revenue generation and investment. Thus the net revenue nullifies. The products of nestle included in this category are:  Nescafe Ceralac 

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2) Question Marks This part of the matrix stands for high market growth and low market share. The products included in this  part are:  Nescafe decaf  Nestle nestum Smarties 

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 Nesquik  HIGH

LOW

STAR   Nescafe

Question Marks

Ceralac

 Nescafe decaf   Nestle Nestum Smarties  Nesquik  Milo

Market Growth Rate

Cash Cows Maggie Noodles Kit Kat

Dogs  Nestea Milky Bar   Nestle Dahi  Nestle Crunch  Nestle Munch

HIGH

LOW

Relave Market Share

1) Star It rep repres resent entss a hig highh mar market ket sha share re and hig highh mar market ket gro growth wth,, hav having ing high high rev revenu enuee gen genera eratio tionn and investment. Thus the net revenue nullifies. The products of nestle included in this category are:  Nescafe Ceralac 

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2) Question Marks Thisare: part of the matrix stands for high market growth and low market share. The products included in this  part  Nescafe decaf  Nestle nestum Smarties  Nesquik Milo 

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3) Cash Cows It represents a high market share and low market growth. The products included in this category are: Maggie noodles Kit Kat  

4) Dogs

 

This is the part of the matrix that has a low market share as well as low market growth. This part includes the following products:  Nestea Milky Bar  Nestle Dahi  Nestle Crunch 

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 Nestle Munch

SWOT ANALYSIS:  

Streng Str engths ths 

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Strong Brand Equity: Milo has strong brand equity, which has been achieved through the selling healthy products. Milo is also a well-known product due to a variety of product items under its brand referred to as Milo. Some of these  product items include the original Milo brand, Milo Zuze, Milo wafer bar among others. Unique Chocolate Flavors: Since the company focuses on producing chocolate energy drinks, this has allowed it to gain a good reputation (Palmer, 2009). Its unique flavors make it attractive to more customers all over the world. As a result of the unique selling points, Milo has been profitable and assured the success of  the company. Strong geographical advantage (Nestle): Milo is sold in many countries all over  the world. This has enabled Milo to attain big sales in different countries. Corporat Corp oratee Social Social Res Respons ponsibi ibilit lity: y: The compan companyy is capabl capablee of address addressing ing its challenges in an ethical manner. These challenges have attributed to the sharp increase in the price of the commodity in 2007. Nestle-Milo has maintained its strong market share because its ubiquitous beverage taste is desired by consumers in Malaysia, Australia and globally (Nestlé Oceania, 2008). Promotion/Advertisement: Promotion of Milo products is done through various ways in different countries and this has helped it achieve immense growth. This has also made its products be widely available in every market. Ads and sales  promotion via their website accompanied by good quality products have assured the clientele to earn value for their money.

Weakne Wea kness sses es Lack of diverse flavors: Not enough diversity of flavors is an area that needs to be looked into for Milo products to beat its competitors. Packaging: The design of tin and labeling are some of the areas that have really affected the desire of most consumers. Their packaging must be improved in order to achieve competitive advantage. 

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Opportunities Expansion: The company still has the potential of reaching small towns and other  geographical areas. This is because the existing markets are not fully tapped and in order to increase its presence in other areas; it can still penetrate further. Due to geographical changes and the rise of the consumer class in many countries, the  per capita consumption of Milo products can potentially grow. Renovation of available products: Milo still has the potential of developing more new products and introducing them to the market. This will likely increase its  profitability and help in gaining competitive advantage. Increased awareness of health and fitness: Nestle-Milo still has the potential of  making its customers be aware of its new products and of how healthy they are. This has to be done via the internet or through ads. Products such as Milo Gold nutritious chocolate malt drinks, which were launched in 2007, can still be used to strengthen the brand’s nutritional image. Sponsorship: Nestle-Milo can increase its profitability by offering sponsorship in sporting events, which will, in turn, expand its product folio. Threats 

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Competition: Milo still faces immense competition from sister companies and it is thus foritthe liberalize its trade and investment whichimportant will enable to company operate intoa globalized economy (Palmer, 2008).policies, It must also produce plenty of hot chocolate and energy drinks in order to win the already intensified battle. Competitors are also using aggressive marketing stratagems aimed at cutting the prices and this is likely to deepen the competition. Diversity in packaging: sister companies or competitors have diverse packaging whereby they use: bottles, cans, and pouches in order to attain competitive advantage. Lack of diversity in packaging has created a change in the trends of  consumers and this is likely to affect the company’s yield. Creation of similar products: competitors have also opted to bring out more similar products to fight the company. Sectoral woes: increased prices of raw material, packaging, and manufacturing costs, fuel prices among others. This is because the company is not likely to pass on the burden to its customers.

Why did milo fail in India? Inspite of heavy discount Inspite discountss in India and heavy push marketing marketing used by Nestle company company for their   brand in Milo. Nestle have to pull up their brand Milo in the year 2009. Dropping Dropp ing sales force of  Milo has led Nestle to stop production of milo in India. The reason why Milo failed in India are as follows:1. The sign signifi ifican cantt brand in the catego category ry is Cadbury Cadbury's 's Bournvit Bournvita. a. Whil Whilee Horlic Horlicks ks is a white white  beverage, Milo directly competes with Bournvita and Boost -- both of which are brown  beverages. Nestle had launched Milo in India in 1996. According to FMCG analysts, Milo has been losing market share to competition from Boost and Bournvita. "While the category itself is not growing Milo has been lacking a distinct positioning. Bournvita and Horl Ho rlic icks ks ha have ve be been en re repos posit itio ione ned, d, and Ca Cadb dbury ury and GS GSK K ar aree pu pushi shing ng th thei eirr brand brandss

 

aggressively," said an analyst. Nestle has withdrawn another product, chocolate-coffee  blend Nescafe Choc Cafe. 2. Nestl stle M Miilo, It is absolutely vile! It is overly sweet to a point where it tastes sour and  bitter. Literally bitter to where it makes you purse your lips into a pucker. It was the lowest selling selling energy ttype ype drink that we carried. carried. Whereas Whereas other products use caffeine caffeine to give you that extra boost. And they all contain a lot of sugar(since it is a natural[sic] energy booster). Some added ingredients like ginseng and taurine(amino acid) and added vitamins. Buthave theyother all are basically the same. 3. The dist distributi ribution on strate strategy gy and the su supply pply chain chain used by Nestle Nestle is not not so wide as compared compared to the major players used by bournvita, complain and Horlicks.