April 3, 2020
Nestlé: 150 Years of Food Industry Dominance

Nestlé: 150 Years of Food Industry Dominance

We live in the most plentiful times known
to mankind. Whereas in the past our ancestors had to spend
most of their waking hours tirelessly working for their food, today we are just one click
away from an endless slew of delicious goodness. It might seem strange, then, to discover that
today, when the choice of brands couldn’t be higher, the companies behind the food industry
have never been so few. That’s why today we’ll be taking a look
at the world’s largest food company, Nestle. The year is 1866, and two entrepreneurs on
the opposite sides of Switzerland were getting ready to start their own companies. The man on the right was Charles Page, a former
US consul who had fallen in love with Switzerland’s green meadows and fat cows. His dream was to build a condensed milk factory,
hoping to mimic the success of the first such factory in the world built ten years earlier
by Gail Borden in the US. Charles had previously sent his brother George
to that factory to try to learn more about Borden’s method, which involved evaporating
the water in the milk and adding sugar. Together the brothers founded the Anglo-Swiss
Condensed Milk Company, with the hope of becoming the British Empire’s primary supplier of
canned milk. At the same time, 100 miles southwest of the
Page brothers lived Henri Nestle, a German immigrant with an equally fervent passion
for dairy products. As one of fourteen children in the Nestle
family, Henri was painfully aware of the high infant mortality rate across Europe. To help solve the problem, Henri spent several
years developing an affordable breast milk substitute by combining milk with grain and
sugar. From 1867 onwards, Henri’s Farine Lactée
became indispensable to Swiss society. By 1871, his infant formula was sold throughout
Western Europe, with his factory churning out over 1,000 cans every day. Just two years later, Henri was selling over
2,000. In 1877, however, a new competitor rose up
to challenge Nestle. While Henri was earning pennies selling his
infant formula in Western Europe, the Page brothers had made a fortune selling their
condensed milk across the world. They had become the primary supplier of the
British Empire, as they had originally intended, but by 1877 they had also spread to the US
and Continental Europe. Eager to expand their business, the Page brothers
started selling their own infant formula. To Henri, this was declaration of war, and
so he promptly released Nestle-branded condensed milk in retaliation, starting a relentless
price war that would rage on for almost 30 years. Although both companies grew during this period,
competition hurt their bottom line immensely. Henri and the Page brothers were proud men
and were unwilling to concede, but by 1905, when all three of them were dead, the directors
of the two companies agreed to a merger. The newly created company had a total of 20
factories and over the next decade Nestle would spread to every inhabited continent. The advent of World War 1 seemed advantageous
at first, since the world’s militaries knew how valuable canned milk would be. Pretty soon, however, Nestle realized that
they would have no way to service this new demand:
Raw material shortages and international embargoes left Nestle’s 20 factories empty. In response, Nestle started buying factories
in the US, drastically expanding their production and cozying up to Uncle Sam. By 1917 Nestle’s capacity had doubled to
40 factories, and by 1921 it had doubled again to 80. World War 1 had taught Nestle a valuable lesson:
don’t keep your eggs in one basket. Throughout the thirties, Nestle opened factories
in Asia and Latin America, so that when the next war came around they’d be ready. Coincidentally, this decentralization kept
Nestle safe from the Great Depression and allowed them to develop one of their most
renowned products: Nescafe. The idea for Nescafe came from the Brazilian
government, which wanted Nestle to find a use for their immense coffee surplus. The Brazilians had suggested making coffee
cubes, but Nestle eventually decided to make a soluble powder instead. Nescafe hit the US shelves in 1938 with minimal
advertising, and yet one year later it had become one of the most popular coffee products
in the country. To Nestle, the outbreak of World War 2 felt
like a deja vu. At first demand grew rapidly, but the sheer
scale of the global destruction left Nestle with huge supply shortages. Nestle’s saving grace came in 1941, when
the US formally entered the war. Nescafe became a staple of the armed forces
and government contracts propelled Nestle to record profits. World War 2 ended up being so profitable for
Nestle that they immediately started buying up the smaller European companies that weren’t
so lucky. Their best purchase by far came in 1947, when
they acquired Maggi, the manufacturer of various soups and seasonings. One year later, Nestle unveil two other brilliant
products: Nestea and Nesquik, which quickly reach Nescafe levels of popularity. Throughout the next decades Nestle expanded
mainly through acquisitions, entering various new markets, from frozen food to pharmaceuticals. One of their most successful moves came in
1974, when they acquired a 30% stake in the French cosmetics firm L’Oreal. Just three years later, however, Nestle were
faced with their first major controversy. US activists accused Nestle of using predatory
marketing tactics to promote their breastfeeding substitutes in the developing world. The boycott quickly spread to Europe, and
although Nestle eventually complied with the demands set forth by the World Health Organization,
the boycott has been intermittently active to this day. Nestle’s expansion continued throughout
the 1980s, buying up brands like Friskies, KitKat and After Eight. During this time they also created Nespresso
system. In 1992 Nestle decided to go all in on mineral
water, establishing what eventually became the world’s largest bottled water company. Since then their brand ownership has grown
exponentially, but so too have their controversies. In 2002 Nestle demanded debt repayment from
Ethiopia during one of the harshest famines in recent memory, eventually backing down
after over 8,000 angry email complaints. In 2005 the CEO of Nestle claimed that people
shouldn’t have a right to water, a claim that backfired so profusely that Nestle have
a Q&A webpage dedicated to his apologies and backtracking. Last but not least is the cocoa industry,
which is the bedrock of Nestle’s chocolate products and is also, coincidentally, one
of the global centers of child labor, slavery and human trafficking. Despite the numerous lawsuits and calls for
boycott, however, Nestle has become bigger than ever, owning over 2,000 different brands
across the world. Since people are unlikely to give up on Nestle’s
delicious goodies any time soon, it’s safe to say that Nestle will continue expanding
in the future. Thanks for watching and a big thank you to
all of our supporters on Patreon! If you liked Nestle’s story feel free to
subscribe for more and to check out the full Behind the Business playlist for the interesting
stories of other companies. Once again, thanks a lot for watching, and
as always: stay smart.

100 thoughts on “Nestlé: 150 Years of Food Industry Dominance

  1. OMG NESTLE SO SMART! By building factories around the world after taking a hit because of the inability to make or sell products due to war they became decentralized o.O like da Bitcoin

  2. I'm confused can anyone help? So Nestle was advertising sub milk for developing contries that could real use it but activist found it bad? Can anyone clear it up for me

  3. Nestlé have actually said they don't think water is a human right and are buying up water supplies…..they are literally evil!


  5. Nestle are cannibals. They add HEK 293 (kidneys of aborted babies) to their 'products'. Thе staff of Nestle will be executed after the collapse of dollar

  6. I'm never buying anything from Nestle. They are just too ruthless without any care for customers welfare at all. They sold shoddy infant formulas resulted in many deaths in developing nations and even worse is they bought out a bollywood movie about that scandal and took it off from theatres. Now that movie is released via streaming platform but the name of the company had been changed in it. Such ruthlessness made me feel disgusted about the company.

  7. Wow, thank you, this video is very interesting, and it helped me a lot with a school project! everything is explained so well

  8. I want to feedback about Malaysia nestle made Maggi noodles poor quality. Chicken n curry flavour. They should listen on consumers concern Improve the quality of noodles.

  9. Why the food industry always dominated by evil multinational companies which are exist for more than 100 years ?……….how could the people beat them if they commit horrible act…..??

  10. Blaming a company for child labor? Doesn't get dumber than that. If you think child labor's wrong, you need to blame the child's parents, nobody else.

  11. @Business Casual, could you maybe add your sources to the videos? Where did you get the information? How can we verify that what you are telling us is true?

  12. One thing to note: nobody has the "right" to water. You certainly have the right to get it yourself, whether it be buying it or collecting it, but you don't have an inherent "right" to anything.

  13. Nestle is a horrible company that does horrible things for profit. In Canada, they literally steal fresh water (ok not literally they pay 1 dollar for one million liters) then they sell it back for 3 bucks. Yes, consumers have to take some accountability but the CEO of Nestle did say that water wasn't a human right. STOP BUYING NESTLE BOTTLED WATER!!!!!

  14. Nestle was about to start an evaporated milk plant in india in early 1950s.The then chief of National dairy development board ,Dr varghese kurien told the company to take indian workers in the factory.They objected saying that it is not a job for locals as it needs skill and precision.

  15. When they're not too busy stealing water from communities or killing babies, they also like to promote discrimination against sexual minorities. But I guess all the idiots out there will continue to reward evil creeps like those at Nestle, Google, Facebook, etc. for their bad behavior while good people are treated like shit.

  16. The high cause of diabetes epidemic is due to companies like Nestle. Other fast food joints get flagged for sugar and carbohydrate contents in their products, but not Nestle. They are selling bad food and labeling it as health product for children and adults

  17. The only reason nestle survived and thrived: Switzerland, a country with no war for the whole 20th century.

  18. Dr Olav Sopp was the first in the world that successfully canned unsweeten condensed milk. 1889 came the product out called viking melk. It was a Norwegian man and company. Nestlé bought it first factory abroad in 1898 and it was viking melks factory in Kapp, Norway.

  19. Nestle is a horrible company. Killed so many with warning labels and blames the consumers. Nestle also raping many city’s and by taking their water for fractions of 1 percent of it worth and selling it back for many millions in profit. Leaving lands dry and fish free. They own the scientist and courts. No change because they’ve become too powerful. Switzerland 🇨🇭


  21. and stupid people keep eating packed processed absurd food. That's why Nestle is bigger than ever, because people are stupid and in best cases ignorant.

  22. in 50s they "influenced " many govts against breast feeding ..caused massive suffering in third world due to poverty ignorance unavailable clean water babies dying and suffering . First world countries now have immunity diseases like excema asthma etc as no antibodies passed on from breast milk.has become a generational issue. BOYCOTT ALL NESTLE PRODUCTS

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