
According to CNNMoney, Nestlé, the world's largest food company, reported profits of $9.6 billion in 2009. Given the state of the economy in 2009, what is it that contributed to this company's (relative) success? Do they provide superior products than its competitors? Does Nestlé have the best marketing team or business tactics in its industry?
Here are my thoughts – A poor economy leads to businesses suffering. When businesses suffer, the people working for those businesses aren't making as much money, and are therefore stretching their budgets to make ends meet. This leads to stress. What do many typical Americans turn to when they get stressed?..FOOD! And even more specifically, junk food: candy, baked goods, etc... Among other things, Nestlé is the number one provider of chocolate, ice cream, frozen foods, and coffee (Nescafé). And beyond the junk food aspect of stress, how about people being forced to work longer hours than usual? If you've ever worked a day in your life then you are aware that a large portion of our work force rely on coffee as a stimulant source to keep themselves awake and alert in the work place. The public's consumption of store-bought coffee (not a $5 latté from Starbuck's)has probably increased as well.
Although Nestlé reported $9.6 billion in profits in 2009, sales were still down from the previous years. Nestlé attributes this primarily to a decrease in sales of bottled water, probably because the general public has to stretch their budgets and have finally realized that purchasing bottles is the most cost ineffective way to obtain water. On the bright side, Nestlé predicts that sales will increase in 2010.
What do you believe contributed to Nestlé's success in 2009?
