A local and global portfolio – Nestlé - Strategic Brand Management

How do the multinationals organise their brand portfolio to improve the efficiency of their brands simultaneously? Nestlé is an interesting example of this.

Nestle Brand Portfolio

The Nestlé portfolio of 8,500 brands is organised by geographical status and role. Together they create a ‘hierarchy of brands’ in which each product is associated with at least two brands, at different levels in the hierarchy (not to mention brands of ingredients). The geographical criterion allows three groups of brands to be distinguished – international, regional and local brands.

These brands fulfil different functions and roles, depending on the customers, and represent the principal families of brand architecture. There are ‘family brands’ (or source brands), range brands, product brands and endorsing brands. Eighty per cent of the Nestlé Group’s activity is brought together under six strategic corporate brands – Nestlé, Nescafé, Nestea, Maggi, Buitoni and Purina.

Seventy strategic international brands, designating either ranges or products, come under – or even outside – the umbrella of these six corporate brands. They include Nesquik (an extensive range of chocolate milk products), but also product brands such as Kit Kat, Lion, Friskies and the mineral waters Perrier, San Pellegrino, Vittel and Nestlé Pure Life.

A third category of brands groups together 83 brands known as ‘strategic regional brands’, which are regional rather than international, such as mineral waters like Aquarel and Contrex, the Nuts bar, and Herta cold meats. Finally, there is a fourth category of local brands sold only in their country of origin.

Thus the Nestlé brand refers to several levels and roles:

  • It is a corporate brand and as such acts as an endorsement for all the products and brands in the group. This endorsement function means that the corporate brand usually appears on the side of the packaging or on the labelling on the back.
  • The Nestlé brand is also one of the six strategic corporate brands, with the status of a family brand or source brand. It covers categories as diverse as baby products, products for children, chocolates, ice cream, chocolate bars and fresh dairy products.
  • The Nestlé brand is sometimes simply a product or range brand, as for example Nestlé chocolate or Nestlé condensed milk. These are the basic products, the symbolic products that lie – both literally and figuratively – at the heart of the Nestlé galaxy.

To help identify the different extensions of Nestlé the commercial brand, according to category, the categories have a different symbol. This means that, beyond the unity, there is recognition of the fact that what customers expect from a yoghurt is not the same as what they expect from baby food. Similarly, there is also a logo and symbol for Nestlé the company, that is, the corporate brand.

It is worth pointing out that 20 per cent of Nestlé’s turnover is not produced under the six famous ‘strategic corporate brands’. This is the case with mineral waters, for example. Perrier, which is classified as a recreational drink for adults, is indeed managed within the Nestlé Water division. But this division does not have a brand – its identification is a matter of internal organisation. For clients the world over, Perrier is simply Perrier.

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