Nestle Corp.

• Brent Hanson• Justin Chen

• Lance Rambousek• Randee Birkeland

History

• Founded in Vevey, Switzerland by Henri Nestle

• Combination of two companies

• Popular during WWI and WWII

Industry Analysis

• Brief for candy industry

• Health Issues

• Challenges • Future Trends

Definition and History

• Definition of candy industry

- It’s a part of snack industry and belongs to food industry.

• History of candy industry

- Can be dated back to mid 1800’s.

Health Issues

• As a part of food industry, Candy industry is also facing health issues mainly as followings:

• - Tooth Decay

• - Obesity

Challenges

• Substitutes to candy in snacks risk the profit of candy industry.

• - Chips and crisp

• - Biscuits and cookies

• - Popcorn

Future Trends

• -Improved technology

• -High profit

• -Fierce competition in market

Global Analysis

• Nestle and Ethiopian Government

• Nestle and Infant Formula

• Nestle and Kit Kat

Kit-Kat Commercial

Company AnalysisSTRENGTHS• Strong brand name recognition

some of the most recognized brands in the candy and chocolate industry:

-Nestle Crunch-Pixy Stix-Wonka Products-Butterfinger-Baby Ruth

STRENGTHS Cont.

• Internationalization throughout the industry

• Very recognizable in nearly every country

• Chocolate and Candy are popular worldwide

• Very low operating costs– Allows Nestle to undercut pricing stategies of competitors

WEAKNESSES

• Candy division is small portion of company revenue----only 11% of annual sales---Nestlé's revenues

• Company interests are more targeted toward other industries, not candy

• Dependence on Foreign production-many Nestle products are made overseas for low costs

OPPORTUNITIES

• Healthier approach to candyCountries including U.S. are becoming more health conscious

• Strong opportunity to join bubble gum market

THREATS

• Competitors

• U.S. market slump

• Foreign Labor

• Tainted ingredients (Melamine)

Competitor Analysis

Hershey’s Company

• Largest North American candy company

• Headquartered in Hershey, Pennsylvania

• Largest chocolate factory in the world

• Twizzler’s, Reese’s, Milk Duds, Jolly Ranchers

• Produces Kit Kat for Nestle

Mars Incorporated

• One of the largest private owned companies in the United States

• Headquartered in Hackettstown, New Jersey

• International Headquarters is Brussels, Belgium

• Skittles, Starburst, M&M’s, Snickers

• Recently purchased Wrigley Jr. Company

Pearson’s Candy Company

• St. Paul, Minnesota headquarters

• Salted Nut Roll, Mint Patty, Nut Goodie

• Very centralized – 80% of revenue from Salted Nut Roll and Mint Patty

• Several ownership changes

Cadbury plc

• Worlds largest candy company

• Based in London, England

• Cadbury Cream Eggs, Trident Gum, and Halls cough drops

• 60 countries, 50,000 employees

• Sold United States subdivision to Hershey’s

Recommendations

• Short Term

– Find more efficient and labor friendly production practices

– Create even more low cost products to match the budgets of homes.

– Produce environmentally friendly packages

Recommendations Cont.

• Long Term

– New product lines• Health?

– Expansion into untapped markets

– Combine candy segment with another competitor

Conclusion

Nestle is one of the top producers of candy in the world. They share just a small share in the global market as well as just 11% of their own companies revenue, but their ability to transition into foreign markets and produce top brands lets them compete with all other companies worldwide.