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. To satisfy a clear need, he developed and 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 when it merged with the Anglo-Swiss Condensed Milk Company (1866). 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
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
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 the creation of prosperity on an on-going and sustainable basis that has resulted in not
just the transformation of Moga into a prosperous and vibrant milk district today, but 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 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 to the NESTLÉ Group's proprietary technology/Brands expertise and the extensive
centralized Research and Development facilities gives it a 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 products of truly international quality under internationally famous
brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID
and NESTEA and in recent years the Company has also introduced products of daily
consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi, and
NESTLÉ Jeera Raita.
NESTLÉ India 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 Nestle:

Most people know Nestle through there brands. Their portfolio covers almost every food and
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.

 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, Nescafé Classic, Nescafé Decaff,
Nescafé Dolce Gusto, Nescafé Gold, Nespresso
  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)

Worldwide; most notably the regions of

Markets South-east 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
milk or water, produced b y Nestle and originating from Australia. i t w a s developed 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 of territories, including Malaysia, Singapore, Brunei, Philippines, Indonesia, Chile,
Colombia, Sri Lanka, Peru and Central and West Africa. Most commonly sold 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
added to the milo beverage, but many people enjoy it without the addition of sweeteners,
appreciating it for its subtle chocolate flavor. Another possible use is making a
normal cup of cold Milo and microwaving it for approximately 40–60 s e c o n d s .
This gives the milo drink a biscuit cover on top. Another popular use is to
sprinkle it on ice-cream, especially vanilla ice-cream. Milo can also be
s p r i n k l e d o n breakfast cereals. Milo is often the favored beverage for the Tim Tam 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 , thereby doubling it in size. Then one adds small amounts of hot water and
milk in layers s t i r r i n g e a c h n e w l a y e r v i g o r o u s l y t o m a i n t a i n i t s l i g h t n e s s . A
f i n a l l a y e r o f w h i p p e d 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 a for healthy eyesight
 Vitamins B1 and B2 to help release energy from foods
  Vitamin C to keep skin and gums in good shape

History
In 1934, Australian industrial chemist and inventor Thomas Mayne developed Milo and launched it at the
Sydney Royal Easter Show. Milo began production at the plant located in Smithtown, near Kempsey on
the North Coast of New South Wales. The name was derived from the famous ancient athlete Milo of
Croton, after his legendary strength.
Manufacture
Milo is manufactured by evaporating the water content from thick syrup at reduced pressure. The thick
opaque syrup is obtained from malted wheat or barley 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.
Consumption
Milo is consumed all around the world in different forms and ways. Milo manufactured outside
Australia i s c u s t o m i z e d f o r t h e l o c a l m e t h o d o f   preparation. It often consumed as a
flavored beverage with Tim Tam Slam, sprinkled on ice-cream, breakfast cereals. Milo
manufactured outside Australia is customized for local methods of preparation. In some parts of Asia like
Malaysia, Singapore, Brunei, etc. it is served with ice added to it and is known as "Iced Milo" or "Milo
Ais"). Iced milo is even available at fast food restaurants such as KFC and McDonald's. It is also served
locally in versions such as "Milo Dinosaur" (a cup of Milo with an extra spoonful of undissolved Milo
powder added on top of it), "Milo Godzilla" (a cup of Milo with ice cream and/or topped with whipped
cream)"Neslo" (combined with Nescafé powdered coffee) and "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 of Batik cake. It
is also sometimes used as an alternative to jam and spread on bread or also as an ingredient in Roti Canai,
and is usually called "Roti Milo".

Market Trend and Competitor Analysis

In India, health food drink market was a USD 860 Million markets in 2017, which makes it one
of the world’s largest health food drink market. The HFD market going 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 increasing demand for health drinks,
owing to growing consumer preference for milk with dairy additives such as malt. 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 per-
capita 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 malted 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 non-
cocoa 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 category in India, with an estimated market
share of 65% by volume and 56.3% by value as of March 2017.
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
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
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
  Nesquik

HIGH LOW

STAR Question Marks HIGH

Nescafe
Ceralac Nescafe decaf
Nestle Nestum
Market Growth Rate Smarties
Nesquik
Milo

Cash Cows Dogs

Nestea
Maggie Noodles Milky Bar
Kit Kat Nestle Dahi
Nestle Crunch
LOW
Nestle Munch

Relative Market Share

1) Star
It represents a 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
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
 Nesquik
 Milo
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
 Nestle Munch

SWOT ANALYSIS:

 Strengths

 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.  
 Corporate Social Responsibility: The company is capable of addressing 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.

 Weaknesses
 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.
  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

 Competition: Milo still faces immense competition from sister companies and it is
thus important for the company to liberalize its trade and investment policies,
which will enable it to operate in a globalized economy (Palmer, 2008). 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 discounts in India and heavy push marketing used by Nestle company for their
brand in Milo. Nestle have to pull up their brand Milo in the year 2009. Dropping 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 significant brand in the category is Cadbury's Bournvita. While Horlicks is a 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
Horlicks have been repositioned, and Cadbury and GSK are pushing their brands
 aggressively," said an analyst. Nestle has withdrawn another product, chocolate-coffee
blend Nescafe Choc Cafe.
2. Nestle Milo, 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 energy type drink that we carried. Whereas other products use caffeine to
give you that extra boost. And they all contain a lot of sugar(since it is a natural[sic]
energy booster). Some have other added ingredients like ginseng and taurine(amino acid)
and added vitamins. But they all are basically the same.
3. The distribution strategy and the supply chain used by Nestle is not so wide as compared
to the major players used by bournvita, complain and Horlicks.