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
- Its a part of snack industry and belongs to food
industry.
History of candy industry
- Can be dated back to mid 1800s.

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 Analysis
STRENGTHS
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--Nestl'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 candy
Countries 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

Hersheys Company
Largest North American candy company
Headquartered in Hershey, Pennsylvania
Largest chocolate factory in the world
Twizzlers, Reeses, 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&Ms, Snickers
Recently purchased Wrigley Jr. Company

Pearsons 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 Hersheys

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.