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Jacob Jenott
Dr. Bolschied
Food Science 110
December 7, 2010
Nestle Company
INTRODUCTION: Nestle is one of the biggest companies in the world today. Its rich history
has given them great opportunities to expand and become a common house-hold name. Nestle
can be found in the grocery store, the pet isle, in the make-up department and even in hospitals.
Nestle competitors are always try to find a way to one-up this company. Luckily, Nestle is
always in the top three, in terms of sales, in whatever they sell. Its executive, Paul Bulcke, is
continually trying to find ways to dominate the sales across the world. That is why a great effort
is being put in to expanding to every country in the world. Nestle continues to make strides as
they have already patented several technological advances such as wafer technology, which is
used in Kit Kats.
HISTORY:
In 1866, Henri Nestle started a company to help mothers who were unable to
breastfeed their children (Nestle). He created a formula comparable to breast milk; it was
nutritious yet easy to digest for babies (Nestle). His product was an instant success and within
forty years, this small company expanded to Britain, Germany, Spain, Singapore, Hong Kong
and India. In 1899, Nestle came out with evaporated milk. The first milk chocolate bar was
created with the evaporated milk made by Nestle. By the early 1920’s, Nestle was making
chocolate and malted milk. WWI was the direct cause of this. Nestle was selling powdered milk
to the government for the soldiers during the war and when they came home; the need for
powdered milk drastically went down. Nestle had to act fast, and chocolate was the next
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commodity produced. During WWII, instant coffee was invented by Nestle for the soldiers at
war. Around the same time, chocolate chips were created revolutionizing baking at the time.
Nestle quickly took advantage of this.
PRODUCTS:
After the war, Nestle merged with several big companies including Libby’s
fruit juices and Stouffer’s frozen foods. Their success was unparalleled and eventually bought
outside of the food industry. In the 1970’s Nestle bought L’Oreal, a cosmetics company and
Alcon company, a pharmaceutical company. In 1985, Nestle purchased Carnation company for
just over three billion dollars (Nestle’s). Later, Nestle bought Dreyer’s ice cream company in
2002. Nestle purchased Eventually Purina, a pet food company, merged with Nestle. In 2010,
Nestle bought Tombstone pizza from Kraft. Today, Nestle’s name is on over 6,000 brands
producing products such as coffee (Nescafe), ice cream (Haagen-Dazs), baby formula(Gerber),
cereal (Cheerios), water (Milo), pet food (Purina) and pharmaceuticals (Novartis) (Brands).
Many of these brands are not known by the American public as brands associated with the Nestle
company.
COMPETITORS:
Nestle has competitors in each division they are in. Kraft is a major
competitor of most of the items Nestle sells. Both companies are trying to expand to the global
market and both are dominating the market in the United States. Orijen is the biggest competitor
to the pet care division of Nestle. Hershey is the biggest competitor to the candy division of
Nestle. Nestle and Hershey are the biggest companies in The United States. General Mills has
the biggest competition in the breakfast cereals division of Nestle. With all these competitors,
Nestle has been in the top three in sales in every division they are in for the last ten years. This
shows great consistency for a company.
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EXECUTIVES:
Many of Nestle’s executives are currently located in Stamford,
Connecticut (Nestle’s History) The CEO of Nestle company is Paul Bulcke. Nestle has an
additional twelve Vice Presidents, each covering a specific area of the world. Bulcke became
CEO in April of 2008. He previously was VP and zone director of the Americas. He has been
with Nestle company since 1979. It’s important to Nestle to get executives from inside the
company. This means less training is involved when their is a change in executive. Yet another
way Nestle works in saving money.
WHERE SOLD:
Nestle products can be found in nearly every country in the world. Nestle
currently employs over 280,000 people; manufacturing over 10,000 different products. Many of
the people are spread across Nestle’s 456 factories. They market to over 130 countries and sell to
84 of them. Nestle supports nearly 540,000 farmers across the world with their frequent raw
material purchases The majority of people employed are young with the average age being 32.
Many of the people are having short stints with Nestle. The average tenure is 2.5 years with the
company. Nestle needs to improve keeping their employees longer because training is expensive
and 2.5 years is not a long time.
FINANCIAL:
Nestle sells over one billion products every day and in 2009, recording
over $107 billion dollars in sales. This was down nearly 2% from the year before. Nearly 10
billion of of the money earned was profit and over 2 billion was used for product research. The
profit was down from 18 billion in 2008 but is nonetheless making money. 2010 outlook is
expected to be up because of the expanding business in Europe. So far in 2010, revenue is up
6.5% compared to the same time the previous year. In the next ten years, Nestle wants 45% of
revenues to come from out of the United States. Over two billion dollars is to be invested in
Brazil, Russia and India, three large countries on three different continents, for advertisements
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and the takeover of smaller companies in these areas. Nestle wants to be in the large countries of
the major continents of the world.
INNOVATIONS:
Nestle’s first innovation made it who they are today. Their baby formula
for mothers who could not breastfeed was the first thing they produced on a massive scale; this
product started the entire Nestle company. In 1904, a similar beverage was create for the adult
population. In 1934, Nestle developed wafer technology. They found the perfect recipe and is
now used in items such as KitKats. Nestle is also working on low fat options for those on a diet.
They are also working diligently on pet food for overweight animals. Nestle is working everyday
trying to reduce the overall salt content in all their food. Nestle currently won’t report if they are
working on any new food innovation for the future. Reducing packaging and improving the
health of their food are their future priorities. If packaging is reduced, cost of production will go
down. If the nutrition of their products improves, this becomes marketable and consumers will
buy more. They are also working hard to develop food that fits into the nutritional differences of
the elderly and people with special nutritional needs of infants and others.
SCANDALS:
Like all companies, Nestle has had its share of controversy. During the
1970’s, Nestle promoted its baby formula to poor developing countries. Mothers of these
countries could barely afford to take care of themselves, yet Nestle encouraged them to buy baby
formula because it was “better”. Many countries boycotted Nestle for their unnecessary
promotion to these poor developing countries. Because of this, Nestle later stated breast milk is
the best food for infants, however women who don’t breast feed their infants need an alternative
to ensure the babies are getting the nutrition they need. Recently, Nestle has been accused of
buying dairy products from Zimbabwe supporting dictator Robert Mugabe. They have also been
accused of cutting down the forests in Indonesia to make room for palm oil plantations. Several
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recalls of products have taken place throughout the years. In June of 2009, Nestle recalled 30,000
cases of cookie dough. These were contaminated with E. Coli and affected over 70 people in 29
states. This action was voluntary to prevent further illnesses across the US. Most recently Nestle
recalled its famous fudge kits due to incomplete allergen labeling. The labeling didn’t contain all
the allergen information, particularly for peanuts and other tree nuts (Burge).
COMPANY REPORT:
After all research done on Nestle Co., I’ve come to the conclusion
that this would be a good company to invest in. They have a well based history of helping the
United States in the time of need during WWII. Nestle sells a variety of products in several
different areas. With all the different categories, it would nearly be impossible for this company
not to be an intricate part of the world in the next fifty years. Even with all these categories they
sell product in, Nestle is continuing on developing and creating new product. This shows they
are not satisfied with where they are now, and are trying to improve. Nestle plans for several new
products within the next five years. A few can be found on their website, most of which are
making current products healthier and more economically friendly. Nestle is one step ahead of
other countries, knowing what’s going to sell in the future. Nestle is looking toward the future
and that is hard to find in companies now a days. It’s promising that even in the global recession,
Nestle still made over ten billion dollars in profit. Nestle is also expanding as fast as they can in
Russia, Brazil and India. They are not only trying to be the biggest company in North America
but also in Europe, South America and Asia. In the next twenty years, expect Nestle products to
be a household name in every country in the world. The CEO clearly knows how to run the
business being there for over thirty years. Like most major corporations of the world, Nestle has
had its share of scandals. This shouldn’t scare investors from investing money into this company.
Even with the voluntary recall of cookie dough in 2009, Nestle managed to make over ten billion
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dollars in profit. I would recommend investing money into the company of Nestle. They use an
array of ingredients and don’t depend on any one product to make a profit. This makes the
company nearly recession proof.
Peanuts
INTRODUCTION:
The peanut is part of the legume family and is primarily grown in
the southern United States. It has never been as popular as it is today. Most people didn’t know
how to use it so peanuts were generally eaten only by the poor. The Aztecs were the first known
to consume peanuts. It wasn’t until the early 20th century when Washington Carver found other
ways to use peanuts besides food. Technology increased and peanut production spiked during
WWI and WWII. This had been the case throughout history; peanuts were used only out of
desperation in times of war. Today, peanuts are widely used in the world. The United States is
the leader in peanut consumption (in terms of food). The world uses peanuts for its oil. The
majority of peanuts grown today are in China. Several issues are associated with peanuts;
allergies and constant product recalls are just a few of them. The FDA closely regulates peanuts
and recalls can be found on their website.
HISTORY:
Ancient civilizations such as the Incas and Aztecs grew and consumed
peanuts before others knew about them. They can also be traced back to the fifteenth century
when Europeans had nothing else to eat due to war. Europeans acquired peanuts when they
explored the New World and later traded them to Asia and Africa. In America, peanuts were
used in the early 19th century; where they were grown in South Carolina. They were very
difficult to grow and harvest at the time. While difficult to grow, peanuts were first consumed by
the poverty-stricken and livestock. It wasn’t until the civil war that the consumption of peanuts
went up. Even so, peanuts were not very good quality at the time. They still had to be picked by
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hand and most of them had cracked or broken shells. Nonetheless, soldiers from the North and
South turned to peanuts for food. At the turn of the century, technological advances in harvesting
and cleaning greatly increased the demand for peanuts. Peanut production also greatly increased
during both WWI and WWII. Throughout history, the use of peanuts spiked during the times of
war (USA-Grown).
ORIGINAL USES:
The original use of the peanut was similar to how it is used today.
Americans used them as a cocoa substitute, for peanut oil and as food for the poor (American).
Even with the help of slavery, peanuts weren’t grown that much in the America until after the
Civil War. After the Civil War, peanuts were sold at the circus, at baseball games and on the side
of the street by vendors. George Washington Carver is know as “the father of the peanut
industry”. He developed over 300 more uses for the peanut. These uses included peanut flour,
peanut milk (an alternative for those who are lactose intolerant), paint, and insecticides. Peanuts
have been an important cash crop to the south for last 200 years. They were grown side-by-side
with cotton and tobacco. Peanuts were particularly important to the states of Georgia and Texas.
They had loose soil with hot and humid air, all conditions in which peanuts thrive in. Georgia
and Texas were the only two states of the south that continued to grow peanuts when they
weren’t popular. Other southern states stopped the production of peanuts, and only grew them
when they were needed in the Civil War (American).
CURRENT USES:
Over half of the peanuts grown today are used the make peanut
butter and other peanut spreads (American). In making peanut butter, peanuts are ground very
fine and cooked at 170 degrees Fahrenheit while salt and sweeteners are added (American). The
rest of the peanut can be used as well. For larger corporations, the shells are ground up to make
fireplace logs, livestock feed and kitty litter (American). The skins can be used to make paper but
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most companies do not do this. Peanuts themselves are used in many everyday items. They can
be found in detergents, bleach, pen ink, creams, make-up, shampoo and even explosives such as
TNT (American). The majority of peanuts grown are used as food. They can be roasted and sold
in wholesale or in grocery stores. Many companies use peanuts, as food, in their products. A lot
of which are used as confectionery (American).
IMPACT ON HUMAN HISTORY:
Peanuts have only had a substantial impact
in the last 100 years of human history. Wars have never broken due to conflicts over peanut
raising ground. It has never been exactly known how the peanut should be used. The quality of
them was very poor previous to the 20th century. Because of this, peanuts were widely regarded
as food for the poor. The history is short but peanuts have never been as popular as today, where
they can be used for food, oil, flour or as topping.
PRODUCTION:
The world grows over 29 million metric tons of peanuts a year,
most of it being in China and India. Although these countries grow the most peanuts, most of it is
used for peanut oil. Americans spend over $800 million dollars on peanuts and peanut products
(American). Georgia and Texas account for more than 75% of the peanut production in the
United States (American). Other states such as Oklahoma, Mississippi, North Carolina, South
Carolina, and Virginia account for the rest. Interestingly, the United States is the only 1st world
country where peanuts are grown. Nestle owns the farms and companies who produce its
peanuts (USA-GrownBrands). The majority of peanuts,grown for Nestle, are in California yearround.
ISSUES:
The biggest issue with peanuts is people having allergies to them. Over three
million Americans have an allergy to peanuts. Companies have to publish on their product if they
contain peanuts or peanut products. They also have to tell their customer if the product was
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manufactured in a factory where peanuts are present. The biggest scare for the peanut industry
was in early 2009 when large amounts of peanut butter were recalled due to the threat of
salmonella. Nestle does not buy peanuts from the Peanut Corporation of America due to poor
sanitation(Layton). The PCA had massive recalls of peanut products in 2009 but no Nestle
product was affected. That same company had another recall in 2007 so the one in 2009 wasn’t a
shock to very many people. The recall plants had reports of rat droppings, live beetles, and rats
crawling around. The PCA is working to improve their image and eventually gain the trust of the
public again.
Soy Lecithin
INTRODUCTION: Soy Lecithin is a soy based product that has several functional properties
used in the food world. It was found in the mid 19th century by frenchman Gobley (USAGrown). Soy lecithin is currently produced in Western Europe, Japan and the United States.
These countries are also the biggest consumers of soy lecithin. In general, soy lecithin is mainly
composed of phospholipids, although different grades of soy lecithin may have other compounds
present. Lecithin is used as a emulsifier, which prevents the separation of oil and water. It has
many other uses including making the surface of an object non-stick (USA-Grown). Lecithin
needs to be stored in a cool, dry place otherwise rancidity may take place because of the high oil
content. It’s important to know how soy lecithin is made and used in our food today.
DEVELOPMENT/HISTORY:
Lecithin was found by a french scientist named Gobley. He
did experiments with eggs where he isolated the lecithin in the yolk (USA-Grown). Gobley then
made an emulsion using the lecithin to prove he had found the correct substance. In 1889,
german scientist Schulze and Steiger found lecithin in soybeans. Schulze and Steiger also
determined lecithin content in other plants as well as determining the amount of lecithin based on
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the protein and starch content of the plant. Technological advancements in the early 1900’s made
extracting the lecithin out of soy beans much easier. “Germany led the way in the development
of lecithin recovery in large part because the country also pioneered solvent extraction” (USAGrown). When extracting lecithin in the early 20th century involved the use of flour, however
specifics on how this was done has never been found (USA-Grown). Germany had always been
the leader of lecithin and knowing how to use this product. In 1941, a german scientist named
Kunze published a book on how lecithin can be used (History). That year alone, 500 tons of
lecithin was used in the production of margarine in Germany (USA-Grown). The United States
began using lecithin in the early 1940’s as well. Their production dramatically grew in the next
ten years, from 907 tons in 1941 to 36,280 tons in 1947 (USA-Grown). The United States
continued to find ways to use soy lecithin in its products. Paint companies and the margarine
companies are just two examples of this.
SALES:
Soy lecithin can either be purchased by large companies or by individuals.
Individuals may buy it at nutritional stores as it supposedly has health benefits. Large companies
will buy soy lecithin to use in their products. It is relatively cheap because of the enormous use
of soybeans. The general public can buy it for around $10 for a two pounds worth of capsules.
Corporations will pay around $1.60 per kilogram for food grade quality soy lecithin (Lecithin
information).
COMPOSITION:
Soy lecithin is derived from soy beans and is mainly composed of
phospholipids. These phospholipids are further composed of phosphatidylcholine,
phosphatidylethanolamine, and phosphatidylinositol. These three compounds are know to exist
in cell membranes and the backs of cholesterol and glycerides (Soya). Some of the soy lecithin
may be hydrolysed. In this case, enzymes or alcohol are added to remove part of the fatty acid
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chain. Hydrolysed lecithin modifies the performance and changes the way it reacts to certain
compounds (Lecithin). These modifications are used for non-food substances such as paint
emulsification.
PURPOSE:
Soy lecithin serves many purposes in the world. Perhaps the most known, is its
use as an emulsifier in water-oil solutions (USA-Grown). Lecithin can also be used as a
solubility medium. Flavors and colors can be dissolved in lecithin and added to food. It can be
used in powders to help the powder dissolve quickly in water. Lecithin can be put on equipment,
in the food industry, to make the equipment non-stick and allow the food to fall right off.
Because of this, you will find it in non-stick sprays. In Chocolate, lecithin is used to make the
sugar crystals as small as possible. This gives chocolate its smooth and creamy texture. Lecithin
is used in chewing gum to keep the gum soft and to control the release of flavor. Not all uses of
soy lecithin are for the food industries. Research has been done and lecithin is associated with
the lowering of cholesterol and used for weight loss. Further research needs to be done but
research suggests the lecithin to bind the fat molecules in your body (USA-Grown). It has been
found that lecithin can be applied to metals to slow rust from forming (Lecithin). It is approved
by the FDA and is considered to be “generally recognized as safe”. Lecithin is also considered to
be a food additive.
MEANS OF PRODUCTION:
Soy lecithin is manufactured by extracting the lecithin out
of soybean oil. When the soybean is produced, the gum left over has water added to it and it is
spun in a centrifuge (Bush). The lecithin will go to the bottom and is then collected. Lecithin was
once extracted out of flour but it is unknown how it was done. It is thought that water was added
to the flour which made a paste-like substance. This paste-like substance was then treated
similarly to the soybean oil.
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PACKAGING/STORAGE REQUIREMENTS: Soy lecithin is no different than other most
other additives. It needs to be stored in a cool, dry place. Storage also needs to be in a dark place
to prevent lipid rancidity. Lipid rancidity will severally impact the quality of lecithin. If stored
properly, lecithin can be kept for several years without any negative consequences to the quality
of the lecithin.
SITES OF PRODUCTION:
Soy lecithin is primarily produced in the United States,
Japan, and in parts of Western Europe. These countries are also the primary consumers of soy
lecithin (USA-Grown). Western Europe and the United States grow their own soybeans while
Japan has to import most of its soybeans. United States production alone surpasses 110 thousand
tons per year. (Lecithin information).