China Food

Nestle Empire: subverting breastfeeding and taking advantage of World War II

“ 
has more than 2000 brands in 186 countries. How was Nestle’s food and beverage Empire born?
 ”

Author: Liu Yimin; Editor: Zhou Xueling

Source: Yuanchuan Sea Research Institute (ID: aotekuaitan)

 
When you see this logo, do you think of milk powder, coffee, ice cream, mineral water, chocolate… I can give you this list for one day.
Because in fact, Nestle group has more than 2000 brands, from coffee to condiments, from baby milk powder to pet food, Nestle is producing. Even we always think that Taitaile chicken essence and xufuji candy are local brands, and now they are also a member of Nestle.
Nestle is one of the largest FMCG companies in the world, with more than 500 factories around the world. In 2020, the net sales far exceeded that of PepsiCo, Unilever and other big FMCG brands, and has always been the first in the food and beverage market, ranking the top three in the Forbes comprehensive list of the world’s largest listed companies in 2017.
▲ in 2020, Nestle ranked first among FMCG brands in terms of sales
However, the founder of such a food and beverage giant also tried to produce all kinds of drinks in the initial stage, and finally became popular with one product. In the following more than 100 years, it participated in two world wars, which can be said to have been weathered.
So how did Nestle fire its first shot in Europe, and how did it avoid or even take advantage of the risk of war and finally become a multinational giant?
Make a fortune with baby milk powder
Let’s talk about going to sea. Just talking about going to sea. Hello, everyone. I’m Zhou Xueling. I’ll accompany you across the river by touching the giant on the way to sea.
Nestle’s products now cover seven major fields, such as beverages, sugar and dairy products, but we still start with the first product at the beginning of its birth, that is baby milk powder.
In the 19th century, the infant mortality rate in Europe was high, and one in five children lived less than their first birthday. Nestle’s founder Henri Nestle was born in the early 19th century. Five of his 13 brothers and sisters died in childhood, which made Nestle pay attention to the problem of infant mortality very early.
Later, he found that there were many treasure mothers in Europe who were unwilling to breastfeed, but could not afford a nanny, so they would feed their babies adult food, such as porridge and animal milk.
But now we know that babies can’t drink porridge, which will cause serious intestinal diseases. For dairy products, at that time, most dairy factories were built in the countryside and it was troublesome to transport them to the city, so many of the babies drank were not fresh or even mixed with fake milk.
As a result, European infants are vulnerable to tuberculosis and typhoid fever, and the infant mortality rate remains high.
Therefore, after finding the root cause of the disease, Nestle decided to produce a nutritional product instead of breast milk and fresh milk. When he was a teenager, he worked as a pharmacy apprentice. In his twenties, he became a pharmacist and accumulated professional knowledge.
So a formula was developed, including milk, fructose and wheat flour, and special technology was used to remove starch and acids in the flour that babies can’t digest.
Thus, the first generation of infant formula was born in Europe in 1867.
▲ Henri Nestle, founder of Nestle infant formula
However, products alone are not enough. We are still debating whether to have confinement. It is not easy for people more than 100 years ago to subvert their cognition of past feeding methods.
Therefore, in order to make Baoma accept this bold baby milk powder at that time, Nestle began to put a hard core booklet on newspapers, medical journals and packaging bags in 1872.
▲ it looks quite authoritative, but it’s actually advertising
In the form of academic papers, it first demonstrates that food allergy is one of the main causes of infant death. Next, it says that Nestle’s products can meet all the physiological needs of infants. Finally, it quotes the original words of an authoritative professor and says that this milk powder is self tested and approved, which is trustworthy.
Ah, it is typical that you are ill, I have medicine, and experts guarantee me.
In this way, after implanting authoritative views into consumers, Nestle infant formula was sold to most parts of Europe. From 1867 to 1875, the annual sales of infant formula climbed from 8600 cans to more than 1 million cans.
But then again, products and marketing are just icing on the cake. In fact, before making milk powder, Nestle also tried mineral water, lemonade, rum and other drinks without too much water spray. The root of Nestle milk powder’s popularity is to grasp the impact of changes in the times on social life.
In the 1860s, the first industrial revolution started in Britain and spread to Europe until the 1930s and 1940s, when Nestle was in his twenties and thirties.
During this period, the proportion of women participating in employment increased rapidly, and their social status gradually increased. More and more European mothers pursuing career chose to give up breastfeeding. Therefore, the phenomenon of a sharp increase in infant mortality in Europe under the feeding of artificial food.
This phenomenon was observed by Nestle and found a solution. Coupled with persuasive publicity means, Nestle naturally achieved success.
By condensed milk, we captured World War I
However, when Nestle sold baby grain to the world, there were competitors who also robbed the cake of baby food. This process of loving and killing each other has laid an important foreshadowing for Nestle’s second take-off.
The competitor’s product is condensed milk, that is, concentrated milk with sugar, which also focuses on the function of breast milk substitute.
▲ condensed milk advertising of competitors
So Nestle and it just got up, and the two sides began to develop new overseas markets at the same time.
However, in the year when the opponent opened the factory to the United States, one of the two founders of the other party suddenly died, and the remaining one has been unable to do well. Finally, it agreed to merge in the early 20th century, so Nestle took advantage of the situation to buy the opponent’s factory in the United States and won the top position in the condensed milk industry.
This time, the merger of the two giants and the global expansion in the following years happened to be stuck at a critical point in time. Because immediately, in 1914, World War I broke out.
The front line needs a lot of energy supply. At this time, condensed milk with long shelf life and convenient transportation has changed from baby food to military supplies. The British army began to purchase a large amount from Nestle. But at that time, factories in Europe were affected by the shortage of raw materials and had to go to sea to find production capacity in other parts of the world.
Nestle’s experience and network in the United States and around the world have played a key role. Nestle has rapidly acquired a condensed milk factory in the United States, a dairy company in Norway, signed a supply agreement in Australia, kept up with the production capacity, and the military orders are constantly produced from energy sources.
If Nestle baby milk powder took the initiative to seize the opportunity of the times, then Nestle’s take-off during World War I should be said to have accidentally boarded the express of the times. Originally, it was just seizing the market with its opponent. One careless opponent hung up and another careless, the whole Europe began to fight, which can be said to have been pushed away by the opportunity.
This thrilling express experience made Nestle realize that going to sea is not only to strive for a larger market in good times, but also to disperse risks and obtain stronger resilience in adversity, so as to seize the opportunities given by the times.
Therefore, throughout the 1930s, Nestle began its global expansion and opened factories in Asia and Latin America to prepare for the next turmoil. Next, Nestle produced the most important fruit in the category of instant coffee.
Coffee took advantage of World War II
In 1929, Nestle got a proposal to process coffee beans into soluble powder to replace fresh boiled coffee. In fact, this kind of thing was born more than 200 years ago, but the technology was immature at that time, and the drying process would greatly reduce the aroma and taste of coffee.
Therefore, Nestle spent nine years to improve this process. Finally, in 1938, it found that the secret to maintaining the aroma of coffee was carbohydrates, so it launched instant coffee containing milk and sugar.
▲ 1938 Nestle instant coffee with milk and sugar
I don’t know if this is an excuse for fat house to drink happy water, but in short, in April that year, Nestle coffee was listed in Switzerland and achieved great success. Within two years, it was promoted to more than 30 countries and regions around the world.
This time point can be said to be a prophet level accuracy, because just one year after the advent of Nestle instant coffee, World War II broke out in 1939, repeating the script of World War I.
Nestle was affected at the beginning, but because the battle front needs coffee to refresh, instant coffee has strong portability and long shelf life, and Nestle has factories in the United States and around the world.
Therefore, when the United States announced its participation in the war, Nestle coffee immediately became popular in the U.S. Army and became a supplement for the U.S. Army. The sales volume doubled and pushed the profit to the highest point.
After World War II, Nestle had a lot of cash and began to expand its business empire. It acquired Meiji soup in 1947 and became the second largest shareholder of L’Oreal in 1974. It acquired Taile chicken essence in 1999 and Xu Fuji in 2011. It can be said that it is an emotional acquisition machine.
Nestle’s Modern Enlightenment
In fact, looking back on Nestle’s experience in the two world wars, it can be said that it not only avoided the risk of war, but also took advantage of the opportunities brought by war.
The decentralization of production capacity brought about by the global layout prevents Nestle from being greatly hindered by the war or depression in a certain region, and can provide the output required by orders, thus saving considerable wealth in each crisis.
Such a crisis existed equally for every enterprise at that time.
Therefore, when the crisis ended, some enterprises with weak anti risk ability began to seek to sell, which was an excellent opportunity for Nestle, which withstood the risk. Meiji, acquired by Nestle after World War II, became one of its best-selling brands.
▲ best selling Meiji seasoning for many years
And it now has more than 2000 brands, but also by living better and longer than its competitors, so little saved.
In fact, the epidemic situation is the same shuffle process for the whole market. During the epidemic last year, the catering and leisure entertainment industry was hit hard, but some of them were stealing music.
Caesars, the largest casino chain in the United States, acquired William Hill, the largest gambling company in Britain. Inspirebrands, an American catering group, acquired Dunkin’s brands, another group. The former owns famous fast-food chains such as Buffalo wild wings, and the latter is the evil doughnut brand.
It is only at this time that the enemies who are not in contact with each other can be included in the bag.
Therefore, for those enterprises with high anti risk ability, although the crisis has brought more or less blows, as long as they lose less and resist longer than their competitors, the post crisis is a good opportunity.
reference material
[1]Menof Yore: Henri Nestle, Another Androsphere Blog
[2]HenriNestlé turns 200, Nestlé
[3]MajorMedical Explanations for High Infant morality in Nineteenth-CenturyEurope, Vincent J. Knapp
[4]The Nestlé company history, Nestlé
[5]Originand History of Instant Coffee, History of Coffee
[6]CorporateGiant Nestlé Remains Top Of the Food And Beverages Market, TheBusiness Research company
[7]Nestle ́’ sCorporate Reputation and the Long History of Infant Formula, OxfordCentre for Global History
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