From Infant Formula to Global Giant: The Untold Story Behind Nestlé

In October 1867, in the Swiss lakeside town of Vevey, a baby born a month premature had been vomiting for two weeks and could keep down neither mother's milk nor any of the usual substitutes. He had been given up for lost. A local scientist, Jean Balthasar Schnetzler, asked his friend Henri Nestlé to try a new milk and flour food he had been developing. Nestlé took the baby home and fed him a strongly diluted version of it. Within a few days the child had recovered, and word spread quickly among local mothers, midwives and doctors¹.

Quick Summary

Nestlé is a Swiss company. Its history begins in 1866, when the American brothers Charles and George Page founded the Anglo-Swiss Condensed Milk Company in Cham, and in 1867, when the German-born pharmacist Henri Nestlé launched Farine Lactée, an infant food of cow's milk, wheat flour and sugar, in Vevey². Nestlé sold his company in 1875 for one million francs¹, and in 1905 it merged with Anglo-Swiss². Acquisitions and new products such as Nescafé (1938) made it the world's largest food and beverage company². Its marketing of infant formula in developing countries led to a boycott from 1977 to 1984 and to the WHO's 1981 marketing code⁵,⁶.

That food became the start of Nestlé, a Swiss company that grew into the world's largest food and beverage company². Its history has two founding stories, one in Vevey and one in Cham, a merger in 1905, and some of the best-known controversies in business.

The Birth of a Global Food Giant

Nestlé's company history begins in 1866, when the American brothers Charles and George Page founded the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Using the country's plentiful fresh milk, they opened Europe's first condensed milk factory and sold the product under the Milkmaid brand as a safe, long-life alternative to fresh milk²,¹. A year later, in Vevey, Henri Nestlé launched his infant food, Farine Lactée².

Henri Nestlé's Vision and Early Years

Heinrich Nestle was born in Frankfurt am Main on August 10, 1814, the eleventh of fourteen children¹. He trained as a pharmacist in Frankfurt, and Nestlé's own history says he worked as a pharmacist's assistant in Vevey from 1839 to 1843¹,³. In 1843 he bought a property in Vevey and began making mineral water and lemonade¹.

The property, called En Rouvenaz and later No. 17 Rue des Bosquets, cost 19,000 francs, and came with an oil mill, a press, a small sawmill, a distillery, stables and meadows. Nestlé used the distillery for liqueurs, rum and absinthe, made vinegar, and turned bones into fertilizer in the press, but the reason he bought it was to pipe in water for mineral water and lemonade. Vevey signed the building permit on May 12, 1843¹.

Two changes he saw as a boy in Frankfurt stayed with him: the city's new municipal water system, built between 1828 and 1834, and the arrival of gas lighting. In Vevey he later developed a form of liquid gas for street lighting and persuaded the town to adopt it¹. His biographer also rejects a popular explanation for his later work. Half of the fourteen children in his family died before adulthood, and it is often said that this drove him to fight infant mortality, but the biography calls a direct link "unlikely"¹.

Over the next two decades he tried many products. His company biography lists mineral water, liqueurs, vinegar, fertilizers, liquefied gas and Portland cement, and notes that not all of these projects succeeded¹. He was 53 when his infant food came to market¹.

In 1860 he married Clémentine Ehemant in Frankfurt¹. Nestlé credits her with an important role in the infant food business: as the daughter of a charity doctor, she recognized the potential of the invention, and her commitment helped take the family business beyond Switzerland's borders³.

The Revolutionary Infant Formula

Infant mortality rose in most European countries during the 19th century, and 15 to 25 percent of infants died in their first year, depending on the country. Whether a newborn was breastfed was a major factor¹. Scientists were already looking for substitutes. The German chemist Justus von Liebig, two of whose grandchildren could not be breastfed, published instructions for a "baby soup" in 1865, and several firms produced imitations of it¹. Nestlé's product combined cow's milk, wheat flour and sugar, and was designed for infants who could not be breastfed². He condensed sweetened milk under vacuum, baked wheat flour into rusks, ground the rusks to powder and mixed the two¹. He wrote that it was "a discovery of major importance with an enormous future"¹.

After the premature baby survived, sales took off with very little advertising¹. By the summer of 1869, buying milk each morning was no longer practical, so Nestlé began taking supplies from a milk collection center in a village near Vevey, delivered to the factory by horse and cart³. His biography records sales rising from about 8,600 tins in 1868 to 670,000 in 1874, passing a million in 1875. By 1874 the product was sold in 18 countries on all five continents¹.

Nestlé also built the brand. His logo of baby birds being fed in a nest was based on his family's crest³.

He refused to change it for local markets. Asked in 1868 to swap the nest for a Swiss cross, Nestlé wrote: "I absolutely insist that my labels must be identical everywhere; the external appearance must be the same, only the text being translated into the language of the country. People must be able to identify my product at first glance"¹. For scientific credibility he agreed with the French chemist J. A. Barral that every tin would carry a seal of approval with Barral's name, at 5 centimes a tin. The Franco-Prussian War of 1870-71 cut off the seals, and from 1872 Nestlé's own name was the only guarantee on the tins¹. In the late 1860s he wrote pamphlets for doctors and pharmacists explaining the science behind the product, and, according to Nestlé, they said breastfeeding should always be the natural choice, with infant cereal as an option if needed³.

Building the Nestlé Empire

In early 1875 Nestlé sold the business. A group of local businessmen, with his flour supplier Pierre-Samuel Roussy leading the negotiations, bought it for one million francs, and the sale took effect on March 1, 1875¹. Nestlé described the trade as swapping "his handsome business, which had brought him so much honour and money, for dirty banknotes, at the same time taking a substantial cut in income"¹. He lived on in Glion and Montreux, and died at home on July 7, 1890³.

The sale made him rich. In May 1875 he moved with Clémentine into a house in Glion, above Montreux, later known as Villa Nestlé, and he lent 125,000 francs, a quarter of his cash from the sale, to the owner of the hotel next door to expand it¹. "I do not believe one could easily find a finer place on Earth in which to enjoy one's life in peace," he wrote of Glion that year¹. He put 45,000 francs toward piping a new water supply to the village and had a public fountain built in 1878, paid for a gas street lamp, and contributed to a covered market in Montreux¹.

His successors moved quickly. On March 8, 1875, the business became a joint stock company, Farine Lactée Henri Nestlé, with Pierre-Samuel Roussy, Jules Monnerat as chairman and Gustave Marquis on the board, and before the year was out they had doubled production capacity¹. They also dropped the founder's dislike of publicity: the advertising budget rose from 11,000 francs to more than 100,000 francs between 1875 and 1876¹. By 1890 the Vevey plant was making about 2.8 million tins of infant cereal and 2.2 million tins of condensed milk a year, and the company employed 470 people¹.

Key Acquisitions and Expansions

The new owners and Anglo-Swiss soon became rivals. By 1878 each was selling a version of the other's original product, condensed milk and infant cereal, and both expanded abroad². According to the biography, Anglo-Swiss launched its own infant cereal first, and many retailers who wanted both products from one supplier dropped Nestlé's. At Monnerat's suggestion the Vevey company went into condensed milk, hired a former foreman from Cham, and by 1879 was turning 1,072 tonnes of fresh milk into condensed milk¹. It opened condensed milk plants at Bercher and Payerne in Switzerland and in 1883 its first factory abroad, at Edlitz-Grimmenstein in Austria, built there because of rising import tariffs¹. Anglo-Swiss moved into the United States in 1882, sold its U.S. operations in 1902, and in 1905 the two companies merged to form the Nestlé & Anglo-Swiss Milk Company, with head offices in Vevey and Cham and a third office in London².

By 1905 the combined company had more than 20 factories and sold in Africa, Asia, Latin America and Australia². In 1929 it bought Peter-Cailler-Kohler, Switzerland's largest chocolate company, and chocolate became a large part of the business². In 1947 it merged with Alimentana, the maker of Maggi soups and seasonings, and took the name Nestlé Alimentana².

Surviving World Wars and Economic Crises

The First World War disrupted production but raised demand for condensed milk from armies. In 1915 the British Army began giving Nestlé canned milk to soldiers in emergency rations. To get around shortages of raw materials, the company bought processing plants in the United States and Australia, and by the end of the war it had 40 factories².

The war also brought new technology. In 1916 the company bought the Norwegian dairy company Egron, which had patented a spray-drying process for milk powder, and began selling powdered milk².

Peace brought a crisis. Military demand fell away, and in 1921 falling prices and high stocks produced the company's first and only financial loss. The banker Louis Dapples was brought in, professional managers were appointed for the first time, and research was centralized in a laboratory in Vevey².

In 1939, fearing that the Axis powers might occupy Switzerland, the company moved some managers to a new office in the United States, which became a second headquarters during the war. With exports from Europe cut off, it supplied Africa and Asia from the United States and Australia².

Product development continued between the wars. The malted chocolate drink Milo launched in Australia in 1934, the same year the company introduced Pelargon, a full-milk powder for babies enriched with lactic acid bacteria. In 1936 it became a holding company with a dual structure, Nesthold in Vevey and Unilac in Panama².

Evolution of Iconic Products

Two of the products that carried Nestlé beyond milk were coffee and chocolate.

The Coffee Revolution

Nescafé launched in 1938 as a "powdered extract of pure coffee" that needed only hot water. It was developed by Max Morgenthaler after the Brazilian government asked the company to find an outlet for its large coffee surplus².

Sales slowed at first during the Second World War, then picked up. After the United States entered the war, Nestlé brands became popular with American service personnel, and at the end of the war Nescafé went into CARE aid supplies in Japan and Europe². Nestea followed in 1948, and in 1986 Nespresso launched in Japan, Italy and Switzerland².

Other convenience products followed the same pattern of dissolving in water or milk. Nesquik, launched in the United States in 1948, dissolved easily in cold milk and became a top seller. In 1954 Nestlé's infant cereal was rebranded Cerelac, and in 1957 the success of canned Maggi ravioli pushed the company further into prepared foods².

From Milk Chocolate to Global Confectionery

Nestlé's link to chocolate starts with a neighbor. In 1875 the company supplied condensed milk to Daniel Peter in Vevey, who used it in his trials to create the first milk chocolate to eat². In 1904 Nestlé began selling chocolate for the first time, after taking over export sales for Peter & Kohler².

The 1929 purchase of Peter-Cailler-Kohler brought in a chocolate brand, Cailler, that dated back to 1819. In 1937 the company launched Galak white chocolate and Rayon, a chocolate with honey and air bubbles². In 1988 it bought the British confectioner Rowntree Mackintosh, adding KitKat, After Eight and Smarties².

Business Transformation

After the Second World War, Nestlé grew mostly by acquisition, moving into frozen food, canned food, water, cosmetics, pharmaceuticals and pet food.

Mergers and Acquisitions

In 1960 Nestlé bought the German ice cream maker Jopa and the French company Heudebert-Gervais and the UK canned food company Crosse & Blackwell. It bought Findus frozen foods in 1962, took a stake in the French water brand Vittel in 1969, took over the U.S. frozen food company Stouffer in 1973, and bought Libby, McNeill & Libby in 1976².

Later deals were larger. In 1985 Nestlé bought Carnation for USD 3 billion, and in 1992 it acquired France's Perrier Group². In 2012 it bought Wyeth Nutrition for USD 11.9 billion².

Along the way, Nestlé bought the Italian pasta and confectionery group Buitoni-Perugina in 1988 and the Italian mineral water company Sanpellegrino in 1998, the year it launched Nestlé Pure Life in developing countries. In 1991 it formed Cereal Partners Worldwide with General Mills and Beverage Partners Worldwide with The Coca-Cola Company². In the 2000s it bought the frozen food business Chef America for USD 2.6 billion, acquired the rights to Häagen-Dazs ice cream in the United States and Canada, bought Dreyer's Grand Ice Cream and Mövenpick, and in 2007 bought the baby food company Gerber and Novartis Medical Nutrition².

Nestlé has also sold or spun off businesses. In 2016, its 150th year, it moved part of its ice cream, frozen food and chilled dairy business into Froneri, a joint venture with the UK ice cream manufacturer R+R. In 2019 it sold Nestlé Skin Health and its U.S. ice cream business, and in 2021 it reduced its stake in L'Oréal².

Diversification Beyond Food

In 1974 Nestlé went beyond food and drink for the first time when it became a minority shareholder in the cosmetics company L'Oréal. In 1977 it bought the U.S. eye care company Alcon Laboratories².

The Carnation purchase in 1985 also brought Nestlé into pet food through the Friskies brand. After buying Ralston Purina in 2001, it merged the business with Friskies to form Nestlé Purina Petcare². In 2011 the company set up Nestlé Health Science to work on nutritional products for chronic medical conditions².

It moved into other areas beyond food at the same time. In 1981 Nestlé and L'Oréal set up Galderma, a dermatology joint venture, and in 2014 Nestlé took full control of it as Nestlé Skin Health². In 2006 it bought the weight management company Jenny Craig, which it sold in America and Oceania in 2013, and in 2013 Nestlé Health Science bought Pamlab, a medical foods company².

Controversial Chapters

Nestlé's size has made it a target for criticism, and some of the criticism has been borne out by courts, regulators and reports the company commissioned itself.

Marketing of Infant Formula

The product that founded Nestlé became the center of its biggest controversy. Physicians had known since the 1930s that bottle-feeding in places with poor sanitation and no refrigeration could be dangerous: the water used to make formula was often contaminated, and because formula was expensive, parents often watered it down⁴. Formula companies still promoted it heavily in developing countries, and some hired "milk nurses" who wore nurses' uniforms in maternity wards and encouraged mothers to use formula⁴.

In 1974 the British charity War on Want published "The Baby Killer." On July 4, 1977, the Infant Formula Action Coalition (INFACT) launched a boycott of Nestlé in Minneapolis, and it spread to other countries⁵. Nestlé's own history acknowledges the boycott and the concerns over its marketing of baby food².

In May 1981 the World Health Assembly adopted the International Code of Marketing of Breast-milk Substitutes, by 118 votes⁶. Nestlé says it applied the code across its business². On January 24, 1984, Nestlé announced it would abide by the code in developing countries, and the boycott was called off on October 4, 1984⁵.

Water Rights and Environmental Concerns

Nestlé's bottled water business in North America drew criticism during California's drought. In 2015 The Desert Sun reported that Nestlé's permit to transport water across the San Bernardino National Forest for bottling had expired in 1988⁷. LAist reported that the company pumped 28.3 million gallons from the forest the year before, under an arrangement that let it continue while paying an annual permit fee of $534, and that environmental groups sued the U.S. Forest Service over it⁸.

In Michigan, a 2018 state permit allowed Nestlé to withdraw up to 400 gallons a minute, or 576,000 gallons a day, for its Ice Mountain bottling operation, in exchange for a $200 annual fee. State regulators dismissed a challenge to the permit in November 2020⁹.

Nestlé no longer owns that business. It sold Nestlé Waters North America to One Rock Capital Partners, in partnership with Metropoulos & Co., on March 31, 2021, and the company became BlueTriton Brands¹⁰,².

Labor Practices and Ethical Challenges

Child labor in cocoa has followed the whole chocolate industry. A 2020 report by NORC at the University of Chicago, funded by the U.S. Department of Labor, found that hazardous child labor in cocoa production in the cocoa-growing areas of Côte d'Ivoire and Ghana rose by 13 percentage points between 2008-09 and 2018-19, while cocoa production grew 62 percent. It found no significant increase between 2013-14 and 2018-19¹¹.

Six people from Mali sued Nestlé USA and Cargill in the United States, alleging they had been trafficked into Ivory Coast as children to work on cocoa farms, and that the companies aided and abetted child slavery by buying cocoa from those farms and supporting them. In June 2021 the Supreme Court reversed the lower court and ruled that the suit could not proceed under the Alien Tort Statute, because nearly all the conduct alleged had taken place in Ivory Coast¹².

In Thailand, Nestlé commissioned the nonprofit Verité to investigate its seafood supply chain. The report, released in November 2015, found "indicators of forced labour, trafficking, and child labour to be present among sea-based and land-based workers"¹³. Nestlé's seafood business in Thailand is mainly for its Purina brand Fancy Feast cat food. The company said it would publish the reports and impose new requirements on potential suppliers¹⁴. "Forced labour and human rights abuses have no place in our supply chain," said Magdi Batato, Nestlé's executive vice-president in charge of operations¹⁴.

Corporate Social Responsibility

Nestlé's own framing of its responsibilities has changed over the decades, from sustainable agriculture programs to formal climate and packaging targets.

Creating Shared Value Initiative

In 2000 Nestlé set up the Sustainable Agricultural Initiative Nestlé to work with local farmers. In 2006 it published its Creating Shared Value approach, which says any action for shareholders must also create value for local communities and wider society, and in 2009 it held the first Creating Shared Value Forum in New York².

Nestlé's timeline places the launch of the Nestlé Cocoa Plan and the Nescafé Plan in 2010, to develop more sustainable supply chains for cocoa and coffee. In 2011 Nestlé became the first food company to work with the Fair Labor Association on child labor in its cocoa supply chain².

Sustainability Efforts

In 2018 Nestlé set out its ambition to make 100% of its packaging recyclable or reusable, and in 2019 it opened the Nestlé Institute of Packaging Sciences². In 2020 it published its Net Zero Roadmap, committing to net zero emissions by 2050 at the latest, and in 2021 it launched "Generation Regeneration" and published its climate roadmap².

Nestlé in the Modern Era

Nestlé today is a Swiss company headquartered in Vevey, the town where Henri Nestlé started³. In 2024 its sales were CHF 91.4 billion¹⁵.

Adapting to Changing Consumer Preferences

From the 1980s Nestlé sold unprofitable brands and began promoting products for more health-conscious consumers under a "Nutrition, Health and Wellness" strategy². In 2016 the company said its scientists had found a way to change the structure of sugar so it dissolves faster, which could let it use 40 percent less sugar in chocolate, and that it would start using the process in 2018¹⁶.

In December 2017 Nestlé bought Atrium Innovations, the owner of the supplement brand Garden of Life, for USD 2.3 billion¹⁷. The same year it invested in Blue Bottle Coffee, Sweet Earth and Freshly in the United States². In 2018 it gained the rights to sell Starbucks products worldwide outside Starbucks coffee shops, and in 2020 Nestlé Health Science bought Zenpep, Vital Proteins and Aimmune².

Digital Transformation and Innovation

Much of Nestlé's recent change has come through science and new institutes. It set up the Nestlé Institute of Health Sciences in 2011, the Institute of Packaging Sciences in 2019 and the Nestlé Institute of Agricultural Sciences in 2022². In 2022 it also announced further plans to tackle child labor risk and took a majority stake in the plant-based nutrition company Orgain².

Leadership changed several times in this period. Peter Brabeck-Letmathe became CEO in 1997 and built the "Nutrition, Health and Wellness" strategy; Paul Bulcke was appointed CEO effective April 2008, with Brabeck-Letmathe as chairman; and Mark Schneider became CEO in 2017, with Bulcke as chairman². In 2021 the company also bought the functional hydration brands Essentia and Nuun and part of The Bountiful Company².

Conclusion

Nestlé is the product of two Swiss businesses founded a year apart: an American-run condensed milk company in Cham and a German-born pharmacist's infant food in Vevey. They competed, merged in 1905, and grew through two world wars and dozens of acquisitions into the world's largest food and beverage company².

The history also carries the costs of that size. The company's infant formula marketing led to a seven-year boycott and an international marketing code, and its supply chains and water business have drawn lawsuits and investigations⁵,⁶,¹². According to Nestlé, its founder told doctors that breastfeeding should always come first and that his food was an option when it was needed³.

Frequently Asked Questions

When was Nestlé founded?

Nestlé traces its history to 1866, when Charles and George Page founded the Anglo-Swiss Condensed Milk Company in Cham, Switzerland. Henri Nestlé launched his infant food, Farine Lactée, in Vevey in 1867, and the two companies merged in 1905 to form the Nestlé & Anglo-Swiss Milk Company².

Who was Henri Nestlé?

Henri Nestlé was a German-born pharmacist, born in Frankfurt in 1814, who settled in Vevey, Switzerland. After trying products from mineral water to cement, he developed an infant food in 1867. He sold his company in 1875 for one million francs and died in 1890¹,³.

What was Nestlé's breakthrough product?

Farine Lactée, launched in 1867, a combination of cow's milk, wheat flour and sugar designed for infants who could not be breastfed². Its reputation grew after it saved a premature baby who could not tolerate mother's milk or other substitutes¹.

How did Nescafé change the coffee industry?

Nescafé, launched in 1938, was a powdered coffee extract that needed only hot water. It was developed by Max Morgenthaler after Brazil asked Nestlé to help use its coffee surplus, became popular with American service personnel during the Second World War, and was included in CARE aid supplies after the war².

What controversies has Nestlé faced?

The best known is its marketing of infant formula in developing countries, which led to a boycott from 1977 to 1984 and to the WHO's 1981 marketing code⁵,⁶. Nestlé has also faced criticism over its former North American water business, a U.S. lawsuit over child slavery on cocoa farms that the Supreme Court ruled could not proceed in 2021, and forced labor found in its Thai seafood supply chain by a report it commissioned⁸,¹²,¹⁴.

How large is Nestlé today?

Nestlé describes itself as the world's largest food and beverage company². Its sales in 2024 were CHF 91.4 billion¹⁵.

What is Nestlé's approach to corporate social responsibility?

Nestlé calls its approach Creating Shared Value, published in 2006, which says actions for shareholders must also create value for communities and society. Its programs include the Nestlé Cocoa Plan and Nescafé Plan and work with the Fair Labor Association on child labor in cocoa².

How did Nestlé expand into chocolate production?

Nestlé supplied condensed milk to Daniel Peter for his milk chocolate trials in 1875, began selling chocolate in 1904 through export sales for Peter & Kohler, and bought Peter-Cailler-Kohler in 1929 and Rowntree Mackintosh in 1988².

How has Nestlé adapted to modern consumer preferences?

Nestlé adopted a "Nutrition, Health and Wellness" strategy, created Nestlé Health Science in 2011 and has bought health and nutrition businesses such as Atrium Innovations and Vital Proteins²,¹⁷. In 2016 it announced a way to restructure sugar that could cut sugar in chocolate by up to 40 percent¹⁶.

What is Nestlé's environmental sustainability strategy?

Nestlé has committed to net zero emissions by 2050 at the latest, set out an ambition in 2018 to make all its packaging recyclable or reusable, opened an Institute of Packaging Sciences in 2019 and launched "Generation Regeneration" in 2021².