Soup to Nuts

Switzerland's powerful firm of Nestle Alimentana last week launched another carefully planned assault on European palates and pocketbooks. From Nestle's modernistic Alpine redoubt in the quiet town of Vevey came word that the company had put together a handful of small Austrian, German and Scandinavian firms that it has quietly bought up over the past two years, and set up a frozen food subsidiary called Findus International. Nestle's market researchers have discovered that the average American consumes 48 lbs. of frozen food a year, the average European less than three. Nestle hopes to quadruple the European figure by 1970.

Frozen foods by Nestle may come as a surprise to Americans who associate the company with chocolate bars and Nescafe. Since World War II, however, Nestle has become much more than that. Thanks to its Swiss base, Nestle emerged from the war with comfortable cash reserves--and a new outlook. "Up till then," says Managing Director Jean C. Corthesy, "we had thought mainly of children. Now we think about their parents a lot too."

Shooting for the parent trade, Nestle in 1947 bought Maggi, a Swiss company with a $100 million-a-year line of soups and seasonings. In 1960, Nestle's bosses laid out another $27 million for England's venerable Crosse & Blackwell Ltd., with its 26 soups, preserves, pickles and puddings. Last year the company picked up Italy's Locatelli, which produces cheese, tomato products and meats. Today, Nestle markets everything from soup to nuts, has 75,000 employees and 180 factories in 34 countries. With annual sales of $1.5 billion, it is the world's fifth biggest corporation outside the U.S.--though only two-thirds as large as the biggest U.S. food processor, Chicago's Swift & Co.

A Decent Reticence. Since 1875, when a group of his farsighted neighbors bought up the small Vevey factory in which Henri Nestle had been producing milk pap for babies, Nestle has consistently been characterized by a rare combination of imaginative salesmanship and financial caution. With uninhibited confidence, Nestle has made a success of peddling canned milk in dairy-rich Denmark and instant coffee in Brazil. Most of the company's earnings are poured back into expansion: its 70,000 shareholders, many of them Swiss farmers, get only a 1.2% annual dividend and equally meager information on Nestle's fiscal condition. Explains one Nestle executive: "Reticence hasn't harmed the company or the stock holders." Indeed it hasn't. An investment of $360 in Nestle shares* in 1948 is now worth $1,960.

Nestle likes to hire "butchers' sons," put them through its own Management Development Institute, and send them abroad to "hardship posts" for final tempering before they settle down in the showy glass and aluminum headquarters building alongside Lake Geneva. Nestle also believes strongly in divided authority. Currently, the company has two managing directors (it once had five). Laconic, burly Jean Corthesy, 55, handles day-today operations. Outgoing, Lugano-born Enrico Bignami, 56, is responsible for planning. This arrangement--which was decided by the flip of a five-franc coin--will hold till next January. Then Bignami and Corthesy will switch hats for a year.

No to Rockets. Nestle probably needs two managers. Its operations are vastly complicated by its determination to give customers exactly the product they want. In Switzerland alone, Nestle markets its wares in 1,500 different packages, and around the world there are 40 varieties of Nescafe, each adjusted to local tastes in coffee. "We really spoil the client too much," says one Vevey executive.

Operating under a series of three, six-and nine-year plans, Nestle is now considering branching out beyond food. Says Corthesy: "We won't say no to anything--except rockets and heavy steel." But Nestle will surely go on saying yes quickest to food products, because of a Vevey doctrine unchanged in nearly a century. "People will always eat," says Corthesy. "Well, or badly, they will always eat."

*Each share of Nestle stock is represented by two certificates: one issued by Unilac of Panama, the holding company for Nestle's Western Hemisphere operations, and one by Nestle Alimentana. As of last week, Nestle's registered shares were selling for $510 while "bearer shares" (which carry no name and are handy in ducking tax collectors) stood at $840.

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