PROFILE OF THE COMPANY
Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by
Henri Nestlé and is today the world's biggest food and beverage company.
Sales at the end of 2004 were CHF 87 bn, with a net profit of CHF 6.7 bn.
We employ around 247,000 people and have factories or operations in
almost every country in the world.
The Company's strategy is guided by several fundamental principles.
Nestlé's existing products grow through innovation and renovation while
maintaining a balance in geographic activities and product lines. Long-term
potential is never sacrificed for short-term performance. The Company's
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priority is to bring the best and most relevant products to people, wherever
they are, whatever their needs, throughout their lives.
Nestle was promoted by Nestle Alimentana, Switzerland, a wholly owned
subsidiary of Nestle Holdings Ltd., Nassau, Bahama Islands. Nestle is one of
the oldest food MNC operating in India, with a presence of over a century.
For a long time, Nestle India’s operations were restricted to importing and
trading of condensed milk and infant food. Over the years, the Company
expanded its product range with new products in instant coffee, noodles,
sauces, pickles, culinary aids, chocolates and confectionery, dairy products
and mineral water.
Nestle was incorporated as a limited company in 1959. In 1978, the
Company issued shares to the Indian public to reduce its foreign holdings to
40%. Its name was changed from Foods Specialties Ltd. to the current name
in 1981.The parent held 51% stake in the company as at 2000 end. It has
FIPB approval to hike stake by 10% and has been gradually acquiring shares
from the open market. Parent stake in the company as at 2001 end stood at
53.8%. The parent plans to continue hiking stake through open market
Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading
branded food player in the country. It has a broad based presence in the
foods sector with leading market shares in instant coffee, infant foods, milk
products and noodles. It has also strengthened its presence in chocolates,
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confectioneries and other semi processed food products during the last few
years. The company has launched Dairy Products like UHT Milk, Butter and
Curd and also ventured into the mineral water segment in 2001. Nestle’s
leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch
and Pure Life.
Nestle started its manufacturing operations with Milkmaid in 1962 at Moga
factory. Manufacturing of Nescafe started in 1964 at the same factory. The
company set up another factory at Cherambadi in Tamil Nadu, for
manufacture of infant foods, coffee etc. For almost two decades there were
no new additions of manufacturing facilities due to restrictive policy
environment. The company set up its Nanjangad (Karnataka) factory in 1989
and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory
started operations in 1995. The Company set up its sixth manufacturing unit
in 1997 at Bicholim in Goa
Since Henri Nestlé developed the first milk food for infants in 1867, and
saved the life of a neighbor’s child, the Nestlé Company has aimed to build
a business based on sound human values and principles.
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While our Nestlé Corporate Business Principles will continue to evolve and
adapt to a changing world, our basic foundation is unchanged from the time
of the origins of the Company, and reflects the basic ideas of fairness,
honesty, and a general concern for people.
Employees, people and products are more important at Nestlé than systems.
Systems and methods, while necessary and valuable in running a complex
organization, should remain managerial and operational aids but should not
become ends in themselves. It is a question of priorities. A strong orientation
toward human beings, employees and executives is a decisive, if not the
decisive, component of long-term success.
Our focus is on products. The ultimate justification for a company is its
ability to offer products that are appealing because of their quality,
convenience, variety and price -- products that can stand their ground even
in the face of fierce competition.
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Nestlé makes clear a distinction between strategy and tactics. It gives
priority to the long-range view. Long-term thinking defuses many of the
conflicts and contentions among groups -- this applies to employment
conditions and relations with employees as well as to the conflicts and
opposing interests of the trade and the industry. Of course, our ability to
focus on long-term considerations is only possible if the company is
successful in the struggle for short-term survival. This is why Nestlé strives
to maintain a satisfactory level of profits every year.
Switzerland is home to Nestlé's Swiss subsidiary, its international
headquarters and the registered office of Nestlé's holding company, but
Nestlé does not regard its Swiss headquarters as the center of the universe.
Decentralization is a basic principle of Nestlé. Our policy is to adapt as
much as possible to regional circumstances, mentalities and situations. By
decentralizing operational responsibility, we create strength and flexibility
and are able to make decisions that are better attuned to specific situations in
a given country. Policies and decisions concerning personnel, marketing and
products are largely determined locally. This policy creates stronger
motivation for Nestlé's executives and employees and a greater sense of
identification with Nestlé's business. It is not Nestlé's policy to generate
most of its sales in Switzerland, supplemented by a few satellite subsidiaries
abroad. Nestlé strives to be an "insider" in every country in which it
operates, not an "outsider."
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A very important concern at Nestlé has to do with uniformity: how
consistent Nestlé's principles, policies, rules of conduct and strategies should
be, and to what extent they should differ depending on the country,
subsidiary, region, branch or group of products. In general, Nestlé tries to
limit the uniformity of its policy to a requisite minimum. This minimum is
then systematically enforced, unless there are compelling reasons in a given
market that justify deviation from policy.
Nestlé does not want to become either a conglomerate or a portfolio
manager. Nestlé wants to operate only those businesses about which it has
some special knowledge and expertise. Nestlé is a global company, not a
conglomerate hodgepodge. We regard acquisitions and efforts at
diversification as logical ways to supplement our business, but only in the
context of a carefully considered corporate marketing policy.
Nestlé is committed to the following Business Principles in all countries,
taking into account local legislation, cultural and religious practices:
• Nestlé's business objective is to manufacture and market the
Company's products in such a way as to create value that can be
sustained over the long term for shareholders, employees,
consumers, and business partners.
• Nestlé does not favor short-term profit at the expense of successful
long-term business development.
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• Nestlé recognizes that its consumers have a sincere and legitimate
interest in the behavior, beliefs and actions of the Company behind
brands in which they place their trust and that without its consumers
the Company would not exist.
• Nestlé believes that, as a general rule, legislation is the most effective
safeguard of responsible conduct, although in certain areas, additional
guidance to staff in the form of voluntary business principles is
beneficial in order to ensure that the highest standards are met
throughout the organization.
• Nestlé is conscious of the fact that the success of a corporation is a
reflection of the professionalism, conduct and the responsible attitude
of its management and employees. Therefore recruitment of the right
people and ongoing training and development are crucial.
• Nestlé continues to maintain its commitment to follow and respect all
applicable local laws in each of its
Research and development
The Nestlé research and development centers have two main tasks: to create
new products and manufacturing processes and to improve those that already
exist. These centers play a key role in product safety and quality and also
have their role in conserving resources and protecting the environment.
Environmental concerns are an integral part of any development process to
ensure that our future commercial operations meet the desired criteria.
The Nestlé Research Center provides the scientific support needed to
prevent and solve environmental problems arising in the development
groups as well as manufacturing. In addition, studies are carried out to find
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new ways of using industrial residues to create valueadded byproducts. This
will reduce total emissions and effluents.
The Nestlé development centers prepare environmental impact studies for
new products and manufacturing processes. These cover all aspects, from
raw materials, through processing, to the final packed product. These
analyses provide additional elements for use in deciding whether to
commercialize a new product, or to introduce a new or modified process.
At present, the world faces daunting questions about its ability to provide
enough wholesome food for everyone. Malnutrition and poor eating habits
are still serious problems in many developing countries. By 2100, the
world's population will double. Will it be possible to feed a world with so
many inhabitants? At Nestlé, the big picture is all about feeding the world
and providing food and nutrition for an ever-growing population. Our
response to this situation is to intensify research, strive for innovations and
Flexibility and simplicity
The public's sense of the power and size of a corporation is often inaccurate,
for a company's power is limited by a host of factors including legislation,
competition, regulatory bodies and publicity. From a business point of view,
it is desirable for a firm to achieve the size best suited to a specific industry
or mode of production. To be competitive internationally and make
significant investments in research and technology, a larger company has an
advantage. From a strictly organizational point of view, flexible, simple
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structures work best and excessively large units should be avoided whenever
possible. In both respects Nestlé has a natural advantage: Although it is a big
company, it is spread out over many countries and each of Nestlé's factories
has its own management and responsibility.
Handling of raw materials
The Nestlé Group is in principle not directly involved in primary production
of raw materials and other food ingredients. In general we use locally
available raw materials and purchase them either directly from producers or
through existing trade channels.
Raw materials have to meet clearly established quality criteria and are
checked for possible contaminants including environmental contaminants.
Our purchasing specifications comply not only with legal requirements but
go further to ensure highest safety and wholesomeness of our products.
Whenever possible we give preference to those goods for which
environmental aspects have been taken into consideration. In those cases
where the required agricultural raw materials are not available locally, but
the natural production conditions exist, we encourage local production and
provide assistance for cultivation and dairy farm management.
We support plant growing and livestock husbandry methods which:
• preserve and improve natural soil productivity and economize and
protect water resources
• allow the lowest, most appropriate and safe use of agro-chemicals
• use the least energy.
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Manufacturing comprises all unit operations necessary to transform
perishable raw materials into finished products, with the aim to make them
safe and convenient for the consumers. The manufacturing activities of the
• respect natural resources by efficient use of raw materials and energy
• minimize waste generation and emissions
• ensure environmentally safe disposal of all waste which cannot be
Regular assessments of processing practices are carried out. These
• evaluation of individual plant performance with regard to operations
which have an impact on the environment
• definition of targets for improvement
• review of plant compliance with local government regulations,
company environmental standards, as well as results achieved in
comparison with targets for improvement
• full investigation of incidents which may affect the environment.
Information on developments in environmental protection technology and
practices is disseminated as required to ensure that all plants are using the
most effective environmental practices for their type of processing. This
applies also for co packers.
Marketing and distribution
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Marketing is based on the principle of satisfying consumer needs. This is the
foundation also for the environmental marketing approach of Nestlé.
Environmental product claims in advertising, promotional material and on
packaging are in accordance with legal requirements, based on solid
scientific evidence and used in a serious and reasonable manner.
Our aim is to minimize wastage in communication, publicity and
promotional material, in particular through more precise targeting of
Consumer promotions and merchandising material such as consumer offers,
instore promotions, display material, leaflets, printed matter, etc. take
environmental aspects into account.
This means due consideration of environmental impact in selecting both
materials and printing methods.
In distribution, energy efficient and pollution controlled methods are
encouraged wherever possible.
Information, communication and education
Nestlé's policy is designed to provide correct and coherent information on
the activities of the Group.
Activities related to the environment benefit from the same treatment and
their communication is secured through all currently available means inside
and outside the Group.
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It is furthermore Nestlé's duty to create awareness, to train and motivate
employees on their personal responsibility with regard to the protection of
Legislation and regulations
It is the policy of the Nestlé Group to strictly comply with all laws and
regulations relevant to our activities. We participate in discussions on food
legislation and regulations between international organizations, government
representatives, industry, the scientific world and consumer associations. We
also apply this policy to environment related matters.
In doing so, we cooperate with legislators through local industry
associations in order to promote laws and regulations in the field of
environment which are reasonable, rational, realistic, applicable and
enforceable. We oppose unjustified bans and any other discriminatory
We favor the harmonization of food regulations in order to remove existing
trade barriers and to avoid the creation of new ones. This applies also to
environmental issues. We favor the exchange of information, of experience
and of knowledge between the various interested parties.
Thanks to all these synergies, we can contribute to valuable discussions and
be recognized as an active partner in helping authorities to formulate
comprehensive strategies in the field of the environment.
THE NESTLÉ POLICY ON THE ENVIRONMENT
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Nestlé respects the environment and is committed to environmentally sound
business practices throughout the world, thus taking into account the need to
preserve natural resources and save energy.
This commitment is put into practice by considering local legal requirements
as a minimum standard. If these do not exist, our internal rules, adjusted to
local conditions, apply. Research and Development and new investments
include an evaluation to ensure environmentally appropriate products,
packaging and processes.
Management and personnel within the Nestlé organization worldwide are
encouraged to help resolve environmental problems within their own sphere
Quality and nutritional value are the essential ingredients in all of the
nestle’s brands. Millions of people prefer Nestlé products every day, happy
with the addition to their wellness that they bring. If you are looking for a
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specific brand our product, just use the alphabetical index below to jump
straight to a listing. Or you can explore by category.
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The production of infant food goes right back to the origins of the Nestlé
Company. Henri Nestlé's 'Farine Lactée' was the first product to bear the
In 1867 a physician persuaded Henri Nestlé to give his product to an infant
who was very ill — he had been born prematurely and was refusing his
mother's milk and all other types of nourishment. Nestlé's new food worked,
and the boy survived. From the very beginning, Nestlé's product was never
intended as a competitor for mother's milk. In 1869, he wrote: "During the
first months, the mother's milk will always be the most natural nutrient, and
every mother able to do so should herself suckle her children."
The factors that made baby foods success in the early days of the Nestlé
company — quality and superior nutritional value — are still as valid today
for the wide range of infant formula, cereals and baby food made by Nestlé.
The World Health Organization (WHO) recognizes that there is a legitimate
market for infant formula, when a mother cannot or chooses not to breast
feed her child. Nestlé markets infant formula according to the principles and
aims of the WHO International Code of Marketing Breast Milk Substitutes,
and seeks dialogue and cooperation with the international health community
and in particular with the WHO and UNICEF, to identify problems and their
solution. Nestlé's expertise as the world's leading infant food manufacturer,
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gained over more than 125 years, is put at the disposal of health authorities,
the medical profession and mothers and children everywhere.
Chocolate & Confectionery
The story of chocolate began in the New World with the Mayans, who drank
a dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua
and used the cocoa bean for currency. In 1523, they offered cocoa beans to
Cortez, who introduced chocolate to the Old World, where it swiftly became
a favorite food among the rich and noble of Europe. Nestle forayed into
chocolates & confectionery in 1990 and has cornered a fourth share of the
chocolate market in the country.. It has expanded its products range to all
segments of the market The Kitkat brand is the largest selling chocolate
brand in the world. Other brands include Milky Bar, Marbles, Crunch,
Nestle Rich Dark, Bar-One, Munch etc. The sugar confectionery portfolio
consists of Polo, Soothers, Frootos and Milkybar Eclairs. All sugar
confectionery products are sold under the umbrella brand Allen's. Nestle has
also markets some of its imported brands like Quality Street, Lions and After
Eight. New launches such as Nestle Choco Stick and Milky Bar Choo at
attractive price points to woo new consumers. Chocolate confectionery sales
registered a strong 21.5% yoy growth in 2001 aided by good volume growth
in Munch, Kitkat and Classic sales. Nestle relaunched Bar-One during the
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From the beginning, turning raw, bitter cocoa beans into what one 17th
century writer called "the only true food of the gods" has been a fine art, a
delicate mixture of alchemy and science.
There are many myths and stories as to the invention of ice cream: was it
Marco Polo who brought it back from China (along with pasta)? Probably
not, considering he most likely never visited China.
The story of its popularity is however connected with the invention of
technology to make it on an industrial scale, and to keep it cold once made.
Before refrigeration techniques, food was frozen with the aid of ice, mixed
with salt, which was either stored in ice houses or shipped from cold
countries. But then at the end of the 19th century, both making and freezing
it became easier, and together with the invention of the ice cream cone,
made the product boom.
Today, the United States is the absolute leader in terms of volume
consumed, but the highest per head consumers are in New Zealand. Flavors
you'd never have thought of and yet they're commercially available:
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• Sorbets - Smoked Salmon, Tomato, Cucumber
• Ice Creams - Garlic, Avocado, Sweet corn.
The ice cream cone is the most environmentally friendly form of packaging.
A Syrian from Damascus, Ernest E Hamwi is credited with its invention.
Apparently, during the 1904 St Louis World's Fair, his waffle booth was
next to an ice cream vendor who ran short of dishes. Hamwi rolled a waffle
to contain ice cream and the cone was born.
Convenience foods — packaged soups, frozen meals, prepared sauces and
flavorings —date back more than a century. With the Industrial Revolution
came factory jobs for women and less time to prepare meals.
The problem was so widespread that it became the object of intense study in
1882 by the Swiss Public Welfare Society, which offered a series of
recommendations, including an increase in the consumption of vegetables.
The Society commissioned Julius Maggi, a miller with a reputation as an
inventive and capable businessman, to create a vegetable food product that
would be quick to prepare and easy to digest. The results — two instant pea
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soups and an instant bean soup — helped launch one of the best known
brands in the history of the food industry. By the turn of the century, Maggi
& Company was producing not only powdered soups, but bouillon cubes,
sauces and flavorings.
.Maggi merged with Nestlé in 1947. Buitoni, the authentic Italian brand,
which has been producing pasta and sauces in Italy since 1827, became part
of the Nestlé Group in 1988.
Beverages like coffee, tea and health drinks contribute to about 30% of
Nestle’s turnover. Beverage sales registered a 15% yoy growth during 2001.
While about 14% of sales come from domestic market, exports contribute to
about 16% of sales.
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Nestle's Nescafe dominates the premium instant coffee segment. Nestle’s
other coffee brand Sunrise has also been relaunched under the Nescafe
franchise to leverage on the existing equity of the brand. Nestle has focused
on expanding the domestic market through price cuts and product
repositioning. However it has been losing share in the domestic market,
where it has a 37% market share. Milo, a brown-malted beverage was
launched in 1996. It has an estimated volume share of about 3% in the
malted food drink segment. Nestle has launched non-carbonated cold
beverages such as Nestea Iced Tea and Nescafe Frappe during 2001.
Nestle is one of the largest coffee exporter in the country. Key export market
is Russia, besides Hungary, Poland and Taiwan. Nestle has received an
award for highest export of instant coffee and highest export of coffee to
Russia and CIS for FY00 and FY01. Turnover contribution from exports
registered a 17.5% volume growth in F12/01. Nescafe sales to Russia
accounts for 80% (Rs2.5bn) of Nestlé’s Rs3bn export turnover.
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Everyday, millions of people all over the world show their confidence in us
by choosing Nestlé products. This confidence is based on our quality image
and a reputation for high standards that has been built up over many years.
Quality is the cornerstone of our success
Every product on the shelf, every service and every customer contact helps
to shape this image. A Nestlé brand name on a product is a promise to the
customer that it is safe to consume, that it complies with all regulations and
that it meets high standards of quality. Customers expect us to keep this
promise every time.
Under no circumstances will we compromise on the safety of a product and
every effort must be made to avoid hazards to health. Likewise, compliance
with all relevant laws and regulations is a must and is not negotiable. People,
equipment and instruments are made available to ensure safety and
conformity of Nestlé products at all times. The effort is worth it. Companies
with huge quality standards make fewer mistakes, waste less time and
money and are more productive. They also make higher profits. Quality is
their most successful product. It is the key to their success, today and
The customer comes first
Nestle want to win and keep customers: distributors, supermarkets, hotels,
shopkeepers and the final consumers. They have very different requirements.
Trade customers expect excellent service, correct information and timely
delivery. Consumers consider taste, appearance and price when they make
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their choice. Its task is to understand what customers want and respond to
their expectations rapidly and effectively. We serve various groups of
consumers and there is demand for products at different levels of perceived
quality and price. All customers, however, expect value for their money –
good quality at a reasonable price.
When offering quality to customers we also mean environmental quality.
Nestlé shares society’s concern for the environment and is committed to
environmentally sound business practices throughout the world.
Customers are central to their business and they always respect their needs
Baby food and Instant coffee are categories where brand loyalties are very
strong and Nestle is the market leader. HLL is a significant competitor to
Nestle in instant coffee; while Heinz is the main competitor in the baby
foods market. The market for culinary products, semi-processed foods such
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as noodles, ready mixes for Indian ethnic breakfast and sweets, is largely an
urban market. HLL and Indo Nissin Foods are the main competitors in these
product segments. Nestle has also achieved a significant 25% share in the
chocolate/confectionery market. The company has recently expanded its
dairy products portfolio to include, milk, curd and butter. The company also
forayed into the bottled water segment with the launch of its Perrier brand
in the premium mineral segment and Pure Life in the purified water
Quality is a competitive advantage
We live in a competitive world and must never forget that their customers
have a choice. If they are not satisfied with a Nestlé product, they will
switch to another brand. Their goal, therefore, is to provide superior value in
every product category and market sector in which we compete. The pursuit
of highest quality at any price is no guarantee for success, nor is a single-
minded cost-cutting approach. Lasting competitive advantage is gained from
a balanced search for optimal value to customers, by simultaneous
improvement of quality and reduction cost. Success can never be taken for
granted. We must watch and learn from our competitors. If they do
something better, we must improve our own performance. We can achieve
competitive advantage through Quality.
Quality is a joint effort
Operating companies are fully responsible for maintaining agreed quality
standards. Not only Production units, but also Marketing, Purchasing,
Distribution and Sales have a vital role to play in providing quality to
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customers. This implies a thorough knowledge of the products and services
Quality units at different levels of the organization provide specific support,
promote quality awareness, assume guardianship and audit the system.
Quality departments monitor operations against agreed standards and must
intervene in case of non-conformity. Quality policy and principles, the
mandatory standards and the recommended tools for implementation are laid
down in the Nestlé Quality System which is applicable throughout the
group. Further directions are given through instructions, norms and
guidelines, often specific to a product.
Our business products, such as raw material producers, packaging suppliers,
contract manufacturers and distributors are expected to share our concern for
Quality. They too must set up an adequate quality system, so as to meet our
requirements consistently. The quality efforts must be shared by every
function and department in the company as well as our business partners.
Quality is made by people
Adequate equipment, procedures and systems are needed to make Quality;
so are involved and dedicated people. Each and every Nestlé employee must
do his best to provide quality products and services. Training and teamwork
are crucial to the successful implementation of high quality standards.
Continuous training ensures that everyone understands his tasks and has the
necessary skills to carry them out. Teamwork allows us to achieve results
that are greater than the sum of individual efforts. We motivate employees
by demonstrating management commitment to Quality, by setting
challenging goals and by giving them responsibility and recognition. It is
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through employee involvement that goals and targets can be achieved in the
shortest time. Quality must be a way of life for everyone in the company.
Quality is action
Quality is the result of deliberate action. It is the responsibility of senior
managers to communicate the quality objectives and to provide the resources
necessary for their implementation. It is then up to all employees to make
Quality happen throughout the company. Progress is followed by listening to
our customers and by measuring our performance. Shortcomings and
mistakes must be analyzed and corrected. Problems must be anticipated and
prevented before they occur. We also must identify and take advantage of
opportunities.To stand still is to fall behind. So we must strive for
continuous improvement in every area. It is through many small
improvements as well as through major breakthroughs that we will achieve
excellence. At Nestlé, Quality is our first priority. Let us practice it every
At Nestlé, we are committed to offering consumers high-quality food
products that are safe, tasty and affordable. The Nestlé Seal of Guarantee is a
symbol of this commitment.
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We also believe in maintaining regular contact with our consumers. This
applies both to how we present our products and to how we address our
consumers' questions and concerns. When Henri Nestlé prepared his first
boxes of infant formula for sale, he put his address on the packages so
people would know where to go if they had questions. Today, our Consumer
Relationship Panel with the words "Talk to Nestlé" expresses the same
This is why we have a worldwide Nestlé Consumer Services network
devoted to caring for our consumers. Our people have expertise in a wide
range of areas such as nutrition, food science, food safety and culinary
expertise. They provide the prompt, efficient and high quality service that
consumers expect from Nestlé.
In addition, we teach them talk with consumers and above all, to listen.
Listening helps us to understand what people want. Nestlé uses the insights
gained from relationships with consumers to drive product development.
At Nestlé, we care for our consumers because our success depends on
meeting their needs and expectations. Through listening and understanding,
we can make products that they will want to use all through their lives.
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Nestle is focused on product expansion and improvement of distribution
efficiency. The Dairy business is being expanded and is expected to drive
growth in the long run, although short-term profitability may be impacted in
the investment stage. The company’s entry into the mineral water segment is
a concern, as the segment is already overcrowded and the company faces
stiff competition especially from the Cola manufacturers. Acquisition of an
established brand could catapult Nestlé’s position in the segment. In
categories like beverages, culinary products and chocolate confectionery, the
company is looking at driving growth through launch of smaller SKU’s, thus
enabling affordability to a wide section of the population.
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