Nestle: The Prepare Foods Industry

The Nestle Company has a long and rich history that dates back to the 1860s, when Henri Nestle, a Swiss pharmacist developed a baby formula that could be fed to babies that could not be breastfed. From this point forward, the Nestle Company began expanding its line of quality foods to include some of the most well known food and pet care items on the modern market. Since its inception in the mid nineteenth century, Nestle has expanded its operations to include: products, breakfast cereals, ice cream, chocolate, prepared foods, beverages, bottled water and pet care (History, 2006). Through its development and innovation, the Nestle Company has been able to introduce the world to an entire line of quality foods at reasonable prices.

The enormous success of the Nestle organization is one that has not been rivaled by many other companies. As a collective organization, Nestle has been able to garner considerable success for most of its products. Such is the case with the Nestle Prepared Food (NPF) Company. A division of the Nestle Company, NPF includes a wide range of products such as: Hot Pockets, Stouffer's and Lean Pockets. For millions of American consumers, these products have become a dietary staple. Utilizing a simple concept-providing prepared foods and dinners at an affordable price that can be heated quickly at home-Nestle Prepared Foods Company has been able to garner a considerable share of the prepared foods market overall.

Although the Nestle Prepared Foods organization has been highly successful in its efforts to develop a strong brand presence in this market, it is important for the organization to develop new marketing strategies that will serve as the basis for further organizational success. Utilizing this as a basis for research, this investigation considers some novel ideas for the development of the Nestle Prepared Foods Company. Drawing on current literature about the NPF Company in conjunction with information from the prepared foods industry, it should be possible to provide salient recommendations for the further development of this organization.

The Prepared Foods Industry

Critically reviewing what has been written about current trends in the prepared food industry, it becomes quite evident that prepared food developers are reporting an increase in consumer demand for products that are organic or natural. In response to this change, Wade (2004) reports that many prepared food companies are considering how to incorporate natural or organic ingredients into their products without sacrificing price and convenience. Even though prepared food companies have been able to establish some products that meet these needs, Wade argues that there have been notable problems ensuring the consistency of the taste of natural or organic prepared foods. As such, there are still notable hurdles that need to be addressed if prepared food companies are to effectively meet this need.

In addition to seeking more natural and organic prepared foods, Wade also notes that in recent years, the number of customers seeking ethic foods has increased notably. According to Wade, prepared food companies now offer a wide range of ethnic prepared foods, which include foods from: Thai, Greek, Middle Easter and Fusion cuisine. Eastern European, Thai and Chinese prepared foods are currently among the most widely sight after products. Even though the prepared foods industry has recently leveled off in terms of the development of ethnic prepared foods, Wade argues that recent consumer surveys show that overall demand for these products is quite high. Thus, it is expected that growth in this area will continue in an effort for prepared food companies to meet the needs of ethnically diverse consumers.

Finally, Wade argues that while most prepared food companies seek to create a high level of consistency in their products, there are instances when consumers want to be able to tailor the taste of their prepared foods such that they have a unique flavor. In this situation, more prepared food companies have been willing to offer products that come with "ingredients" that can be added to the food during the process of preparation. When this is done, the consumer can choose either to enjoy the same great taste of product that he or she has come to love, or the consumer can choose to add certain ingredients as a means to customize the taste of the final prepared product.

Strategy Alliances

With a basic overview of the current trends in the prepared foods industry elucidated, it is now possible to consider recent history in the Nestle Prepared Foods Company. Using this as a basis for understanding current strategy, it will then be possible to match recent trends in the prepared food industry to the strategy of the organization. Synthesizing this information, specific recommendations for the strategic development of the NPF Company will be developed.

Covino (2005) in her examination of current strategy used by Nestle Prepared Foods to bolster its products notes that the organization has recently developed a new breakfast pocket that can provide consumers with a healthy prepared food alternative to breakfast. "Many consumers consider breakfast the most important meal of the day, but find it difficult to enjoy due to hectic morning schedules. So they look for great-tasting breakfast products that are quick to prepare, require minimal cleanup, and can be enjoyed on the go" (p. 40). The new breakfast pockets follow the same idea and design as the organization's Hot and Lean pockets. This new breakfast pocket provides both the convenience and quality that can be taken from the home to the office.

With the realization that NPF is interested in developing its breakfast pocket line, it seem reasonable to argue that the organization should consider working with food producers that offer either natural or organic foods that could be incorporated into these products. For instance, in one of the breakfast pockets offered, eggs are used as the primary source of protein. Given recent trends toward more natural products, NPF could consider partnering with Eggland's Best, to provide consumers with a healthier alternative for product development. NPF could effectively develop a partnership with Eggland's Best and agree to use the company's eggs in some of its products. In return, Eggland's would receive free promotion and advertising when Nestle promotes its breakfast pocket products. If NPF could enter into a cooperative partnership with Eggland's Best to acquire product in exchange for advertising, NPF could significantly reduce its overall risk for developing this product.

Other researchers examining the products offered by Nestle Prepared Foods have noted that the organization currently uses a wide range of grains in the development of its Lean Cuisine line of products (Grain..., 2004). Given the importance of natural and organic foods to the development of prepared foods, Nestle should consider what other steps it can take to incorporate multi-grains in its products. The organization should evaluate its ability to acquire naturally grown grains for incorporation into their products. By using natural or organic foods for product development, NPF could raise brand awareness of the Nestle Company as one that is dedicated to providing the best ingredients for its foods. Working with natural food manufacturers, NPF could also offer advertising in exchange for products. If this could be accomplished, NPF would be able to reduce its overall risk for product development.

Diversification

With respect to the issue of diversification, it is evident that the Nestle Prepared Foods Company needs to consider what specific steps it can take to increase the diversity of the products that it offers. Given that ethnic foods have become such an important segment of the prepared foods industry, it seems reasonable to argue that the organization should consider expanding some of its current lines of products to appeal to a more diverse ethnic consumer base. For instance, the NPF organization has had considerable success with its Lean and Hot Pockets. This is why the organization is currently expanding into breakfast pockets. Along the same lines, the organization could consider the development of "burrito pockets" or "egg roll pockets." The goal in this case is to utilize the same basic product design-to minimize the changes that would have to be employed in order to develop a whole new product line-and create products that provide a more ethnic flavor for consumers.

With respect to the issue of creating more customizable foods, NPF needs to consider what specific ingredients or spices that it could offer with its Stouffer's Lean Cuisine products. Lean Cuisine products, which provide either an entrée or an entire meal could include a host of spices that could be included in the preparation of the meal. Paprika for potatoes or rice may be one possible addition that could allow consumers to tailor their products while still enjoying the same great consistency and taste that they have come to love.

Conclusion

The specific strategy used in the processes of strategic alliance and product diversification both focusing in industry trends and applying them to the existing products that are available from Nestle Prepared Foods. By aligning current trends with products that have proven to be successful in the market, the Nestle Prepared Foods Company can minimize both the costs and risks of developing new partnerships and products. Given that the prepared foods industry is highly competitive, the ability of the Nestle Prepared Foods Company to successfully develop new products with minimal cost would be a clear advantage for the future success of the organization.

References

Covino, R.M. (2005). Breakfast of champions. Frozen Food Age, 54(3), 40.

Grain power. (2004). Prepared Foods, 173(12), 19.

History. (2006). Nestle. Accessed March 29, 2006 at: http://www.nestle.com/All_About/History/History+introduction.htm.

Wade, M.A. (2004). Of traits and trends. Prepared Foods, 173(11), 34-40.