Crisis and opportunity
After the war military demand for canned milk declines, causing a major crisis for Nestlé & Anglo-Swiss in 1921. The company recovers, but is rocked again by the Wall Street Crash in 1929, which reduces consumer purchasing power. However, the era carries many positives: the company’s management corps is professionalised, research is centralised and pioneering products such as Nescafé coffee are launched.
Falling prices and high stock levels lead to the first, and only ever, financial loss for Nestlé & Anglo-Swiss in 1921. Banker Louis Dapples joins as Crisis Manager, and encourages the company to appoint professional managers for the first time. Administration is centralised, and research is consolidated at one laboratory in Vevey, Switzerland.
The company buys Switzerland’s largest chocolate company Peter-Cailler-Kohler, the origins of which date back to 1819 when François Louis Cailler creates one of the country’s first chocolate brands Cailler. Chocolate now becomes an integral part of the Nestlé & Anglo-Swiss business.
Malted chocolate drink Milo is launched in Australia, and its success means it is later exported for sale in other markets. The company continues to develop baby and infant foods in this inter-war period, and launches Pelargon in 1934, a full-milk powder for babies enriched with lactic acid bacteria, to improve its digestibility.
A competitive market for chocolate in Switzerland encourages Nestlé-Peter-Cailler-Kohler to innovate by launching Galak white chocolate and Rayon, a chocolate with honey and air bubbles, the next year. Vitamins are a major selling point for healthy products in the 1930s, and Nestlé launches vitamin supplement Nestrovit in 1936.
Nescafé is launched as a ‘powdered extract of pure coffee’ that retains coffee’s natural flavour, but can be prepared by simply adding hot water. The product is the brainchild of Max Morgenthaler, who begins work on it in 1929, when the Brazilian government asks Nestlé & Anglo-Swiss to find an outlet for its huge coffee surplus.