Nescafe coffee from nestle company

Summary:

Nescafe is one of the world's top-selling brand of instant coffee, made by Nestle. It comes in the form of many different products. While the Nescafe brand was created for the original soluble coffee, it has subsequently been used as an umbrella brand on a number of instant coffee products, including, in the UK, 'Gold Blend' and 'Blend 37' freeze-dried coffees. Nestle also intends to make Nescafe a globally known brand. Research has shown that coffee consumption in the U. S. continues to decline.

Yet, specialty coffees, as served in Starbucks continues to slowly rise up. Drinkers increased to 4. 9 percent this year, as compared with 3. 3 last year, and 1. 7 in 1995.

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Description:

Nestle France, a subsidiary of the Switzerland-based agrifood giant, manages the company's grocery division in France. This involves the transport of dry groceries or controlled temperature products sold under the Nescafe, Maggi, Guigoz, Mousseline and other brand names. Third-party logistics (3PL), as a sector within the transportation industry, is growing exponentially as manufacturers try to cut supply chain costs.

In recent years, co-operation between shippers and service providers has become more long-term in nature and has been combined with a high level of integration in the organisational structures and informatics, according to a European Commission study published earlier this year. For the last six years, Nestle France centralised its pre- and post-production transport in order to reduce costs. According to Geodis, Nestle next decided it wanted to focus more on reducing its over all transportation costs, rather than continuing to negotiate prices with selected carriers.

In 2004 Nestle chose Geodis to do a preliminary study of its supply chain flows in order to identify potential areas for improvement. After six months, Geodis submitted a report recommending a flow coordination system that would enable costs to be pooled. Following the preliminary study, Nestle decided to appoint Geodis as lead logistics provider over the next three years for all its transport flows. In return Geodis has made performance guarantees relating to quality, optimisation and total cost reduction.

Geodis will be looking to improve Nestle's transport and supply chain flows, logistics, management of service providers and invoice checking, among other factors. Under the agreement, Geodis will manage all pre-production flows for the six Nestle France factories. The flows involve 17,000 transport orders every year from 250 foreign and 182 French suppliers. Geodis is also mandated by Nestle France to coordinate all distribution flows to the country's six national major retailers. The task involves coordinating transport of goods to 125 delivery points in France with an annual volume of 860,000pallets.

The transporters themselves are selected by Nestle France, and will remain contractually tied to the manufacturer. They will invoice Nestle directly. Geodis will receive the orders and monitor their execution. Under the contract Geodis has the option to operate on the transport on its own behalf up to a maximum of 15 per cent of the total volume. The company says its systems interface with existing tools used by the customer, other transport and logistics providers and raw materials suppliers.

On average, logistics costs account for 10 per cent to 15 per cent of the final cost of a finished product. The European Commission estimate includes costs such as transportation and warehousing. Logistics covers the planning, organisation, management, control and execution of freight transport operations in the supply chain. Nestle estimates that on average, some 3,000 cups of Nescafe are drunk every second around the world, but if the nationwide roll out of Nescafe proves a success, the impact of the massive leap in consumption this could entail would be significant.

But in a market where Maxwell House is so strong, and where coffee shops are so abundant, persuading consumers to drink another brand of instant coffee will be a tall order. Until now, that is. The US is the world's largest coffee-drinking market, and Nestle USA has finally decided to launch Nescafe on a nationwide basis. But rather than focus on its mainstream instant coffee brand, the company has opted to start with Nescafe Frothe, an instant coffee drink which comes in six different flavours: Divinely Mocha, Enchanting Vanilla, Captivating Caramel, Mystical Hazelnut Mocha, Silky White Chocolate and Nestle Butterfinger.

Bruce Handler, managing director of the Handler Design Group and design director at Nestle from 1984 to 1987, explained that from the 1950s to the late 1970s, Nescafe enjoyed steady but slow growth in US, and consumer awareness of the Nescafe brand name was high. Nut this changed in the mid 1980s, when Nestle reformulated the line of Regular and Decaf coffee’s, expanding the line to five different SKUs and switching to European names. Read about Nestle inventory management

NESCAFE continues to be the largest brand of instant coffee in the Indian market

During the year the Company re-launched NESCAFE SUNRISE coffee-chicory blend after it was renovated with superior grade of plantation beans to provide better coffee taste and aroma and competitive advantage. During the year the Company continued to innovate and renovate and in early 2006, launched New NESCAFE 3 in 1 with the right balance of coffee, dairy creamer and sugar and especially formulated to suit the taste profile of the youth who wish to move to the more trendier coffee habit, especially in the tea drinking areas.

Thus Nestle Group savings initiatives mainly Operation Excellence that focused on raw and packing materials, energies, manufacturing processes and optimization of line efficiencies/occupation etc. , helped mitigate the adverse impact of input costs and in controlling other costs throughout the year.

References:

1. Nestle plan Compaign in U. S. for Nescafe brand by Whitman janet from business international in 1999. Publication: wall street journal. Europe.
2. www. foodanddrink. europe. com
3. en. wikipedia. org/Nescafe
4. www. foodproductiondaily. com
5. economictimes. Indiatimes. com

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