We live in the most plentiful times known to mankind. Whereas in the past our ancestors had to spend most of their waking hours tirelessly working for their food, today we are just one click away from an endless slew of delicious goodness.
It might seem strange, then, to discover that today, when the choice of brands couldn’t be higher, the companies behind the food industry have never been so few.
That’s why today we’ll be taking a look at the world’s largest food company, Nestle. The year is 1866, and two entrepreneurs on the opposite sides of Switzerland were getting ready to start their own companies. The man on the right was Charles Page, a former USA consul who had fallen in love with Switzerland’s green meadows and fat cows. His dream was to build a condensed milk factory, hoping to mimic the success of the first such factory in the world built ten years earlier by Gail Borden in the USA. Charles had previously sent his brother George to that factory to try to learn more about Borden’s method, which involved evaporating the water in the milk and adding sugar. Together the brothers founded the Anglo-Swiss Condensed Milk Company, with the hope of becoming the British Empire’s primary supplier of canned milk.
At the same time, 100 miles southwest of the Page brothers lived Henri Nestle, a German immigrant with an equally fervent passion for dairy products. As one of fourteen children in the Nestle family, Henri was painfully aware of the high infant mortality rate across Europe. To help solve the problem, Henri spent several years developing an affordable breast milk substitute by combining milk with grain and sugar. From 1867 onwards, Henri’s Farine Lactée became indispensable to Swiss society. By 1871, his infant formula was sold throughout Western Europe, with his factory churning out over 1,000 cans every day. Just two years later, Henri was selling over2,000.
In 1877, however, a new competitor rose up to challenge Nestle. While Henri was earning pennies selling his infant formula in Western Europe, the Page brothers had made a fortune selling their condensed milk across the world. They had become the primary supplier of the British Empire, as they had originally intended, but by 1877 they had also spread to the USA and Continental Europe. Eager to expand their business, the Page brothers started selling their infant formula. To Henri, this was a declaration of war, and so he promptly released Nestle-branded condensed milk in retaliation, starting a relentless price war that would rage on for almost 30 years. Although both companies grew during this period, competition hurt their bottom line immensely.
Henri and the Page brothers were proud men and were unwilling to concede, but by 1905, when all three of them were dead, the directors of the two companies agreed to a merger. The newly created company had a total of 20 factories and over the next decade, Nestle would spread to every inhabited continent. The advent of World War 1 seemed advantageous at first since the world’s militaries knew how valuable canned milk would be. Pretty soon, however, Nestle realized that they would have no way to service this new demand: Raw material shortages and international embargoes left Nestle’s 20 factories empty. In response, Nestle started buying factories in the USA, drastically expanding their production and cozying up to Uncle Sam. By 1917 Nestle’s capacity had doubled to 40 factories, and by 1921 it had doubled again to 80.
World War 1 had taught Nestle a valuable lesson: don’t keep your eggs in one basket. Throughout the thirties, Nestle opened factories in Asia and Latin America, so that when the next war came around they’d be ready. Coincidentally, this decentralization kept Nestle safe from the Great Depression and allowed them to develop one of their most renowned products:
Nescafe: The idea for Nescafe came from the Brazilian government, which wanted Nestle to find a use for their immense coffee surplus. The Brazilians had suggested making coffee cubes, but Nestle eventually decided to make a soluble powder instead. Nescafe hit the USA shelves in 1938 with minimal advertising, and yet one year later it had become one of the most popular coffee products in the country. To Nestle, the outbreak of World War 2 felt like a deja vu. At first, demand grew rapidly, but the sheer scale of the global destruction left Nestle with huge supply shortages.
Nestle’s saving grace came in 1941 when the USA formally entered the war. Nescafe became a staple of the armed forces and government contracts propelled Nestle to record profits. World War 2 ended up being so profitable for Nestle that they immediately started buying up the smaller European companies that weren’t so lucky.
Their best purchase by far came in 1947 when they acquired Maggi, the manufacturer of various soups and seasonings. One year later, Nestle unveils two other brilliant products: Nestea and Nesquik, which quickly reach Nescafe levels of popularity. Throughout the next decade's Nestle expanded mainly through acquisitions, entering various new markets, from frozen food to pharmaceuticals.
One of their most successful moves came in 1974 when they acquired a 30% stake in the French cosmetics firm L’Oreal. Just three years later, however, Nestle was faced with its first major controversy. USA activists accused Nestle of using predatory marketing tactics to promote their breastfeeding substitutes in the developing world. The boycott quickly spread to Europe, and although Nestle eventually complied with the demands set forth by the World Health Organization, the boycott has been intermittently active to this day.
Nestle’s expansion continued throughout the 1980s, buying up brands like Friskies, KitKat, and After Eight. During this time they also created the Nespresso system. In 1992 Nestle decided to go all-in on mineral water, establishing what eventually became the world’s largest bottled water company. Since then their brand ownership has grown exponentially, but so too have their controversies.
In 2002 Nestle demanded debt repayment from Ethiopia during one of the harshest famines in recent memory, eventually backing down after over 8,000 angry email complaints. In 2005 the CEO of Nestle claimed that people shouldn’t have a right to water, a claim that backfired so profusely that Nestle has a Q&A webpage dedicated to his apologies and backtracking.
Last but not least is the cocoa industry, which is the bedrock of Nestle’s chocolate products and is also, coincidentally, one of the global centers of child labor, slavery, and human trafficking. Despite the numerous lawsuits and calls for boycott, however, Nestle has become bigger than ever, owning over 2,000 different brands across the world. Since people are unlikely to give up on Nestle’s delicious goodies any time soon, it’s safe to say that Nestle will continue expanding in the future.
-Nestlé is a Swiss transnational food and drink company headquartered in Vevey, Switzerland. It is the largest food company in the world. Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestlé's brands have annual sales of over $1 billion, including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi.
-Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products.
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