Nestle corners American baby food market

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Another feather in Nestlé’s cap! The Swiss food and confectionary giant has acquired Gerber – the largest baby food maker in the US for $5.5 billion. Gerber, a business unit of the Swiss pharmaceutical major Novartis Consumer Health, was founded in 1927 in Fremont, Michigan, by Daniel Frank Gerber, who owned Fremont Canning Company that produced canned fruits and vegetables. Gerber initially developed five products for the market: strained peas, prunes, carrots and spinach, and beef vegetable soup – and soon he was in business with Gerber’s baby foods being distributed all over the US, where the brand currently controls about 80% of the market. In 1994, Gerber merged with Sandoz Laboratories. In 1996, Sandoz merged with CIBA-Geigy to form Novartis that is now one of the leading pharma players in the world. It was on April 12 this year that Nestlé announced it was going to buy Gerber. The reason? Although Nestlé has a stranglehold almost all over the world in the baby food market, it couldn’t make inroads into the US market. All thanks to Gerber’s very strong brand equity. The buy-out finally happened on September 1. This is a major step in Nestlé’s transformation into the world’s leading nutrition, health and wellness company: it gives the group the number one position in the largest single baby food market worldwide and clearly establishes Nestlé Nutrition as the global leader in this sector.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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