Nestlé On Top Again

February 12, 2008
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When it comes to the food industry, Nestlé S.A. is the equivalent of the Yankees-except Nestlé wins more consistently.

For the fourth year in a row-that is, since our first Top 200 issue-Nestlé is the No. 1 food company on the Food & Drug Packaging list of the top food processors operating in the United States. The Swiss-based food giant, producer of such familiar brands as Nestlé chocolate, Buitoni pasta and Stouffer’s frozen food, racked up global food sales of $53.7 billion in 2006, more than twice the total of No. 2 company Kraft Foods, and an increase of 14% over 2005.

Nestlé’s size stems from its diversity. The company makes candy, frozen food, pet food, pasta, coffee, baby formula (its original product, developed in the 1860s by company founder Henri Nestlé), ice cream and more. It operates in more than 80 countries across the world.

Food growth was a top driver for Nestlé in 2006. Sales grew 9.3% in milk/nutrition/ice cream (to $20.7 billion), 5.8% in frozen foods and prepared dishes (to $14.4 billion), 5.6% in chocolate, confectionery and biscuits (to $9.3 billion), and 8% in pet food (to $9.3 billion). Some of its fastest-growing brands include Stouffer’s Lean Cuisine, which enjoyed a sales rise of about 18%; Purina pet food, about 9%; and Dreyer’s/Edy’s ice cream, about 6%.

Nestlé made a couple of recent key acquisitions in the food sector. It bought Jenny Craig Inc., a franchised chain of weight-loss centers, in a $600 million deal that will include production of the packaged food that Jenny Craig provides to clients. This is part of a health and wellness strategy that CFO Paul Polman announced to investors in June, when he predicted that the company would increase sales of “health, wellness and nutrition” products by up to 6% over the next 10 years. And Nestlé bought Gerber, which makes baby food (as well as non-food items for infants), from Novartis for an estimated $5.5 billion.

Nestlé’s packaging is as diverse as its products, using virtually every kind of material available: flexible film, glass and plastic bottles, other rigid containers, paperboard, tubes and more. The company has an ongoing source-reduction program that, it claims, has saved 315,000 tons of packaging materials since 1991, for a total savings of $456 million.

Some of Nestlé’s most notable new packages include:

• WonkaZoids, a container for Nerds and SweeTarts candy (under Nestlé’s Willy Wonka brand) that doubles as a video-game controller. The packages, shaped like game controllers, are working video games with LCD screens, powered by small lithium batteries.

• Beneful Prepared Meals dog food in a self-contained, portable bowl that allows owners to feed their dogs anywhere, anytime. This package won the most votes from attendees in the Select Awards contest at last year’s Pack Expo.

• A package for Buitoni rolled refrigerated pizza dough, distributed in Europe, that features a one-way valve to release carbon dioxide generated by the dough’s yeast.

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