Nestle (Proejct)

§      Business Review (marketing mix)

§       Milk Collection

The core raw material of Nestle Milkpak is milk. Over the last twelve years, the Company's prime concern has been to improve the quality and volume of milk for UHT processing and for other milk based products. Driven by its commitment to quality and having realized that only self collection could eliminate its dependence on poor quality milk available from outside sources, the Company successfully established its own collection system and expanded its operations over a very large milk shed area in Punjab. Owing to this tremendous growth in the volume of an extremely high quality raw milk, Nestle Milkpak now produces a superior quality and better tasting UHT milk, with longer shelf life.

Today, Nestle Milkpak can boast of the largest milk collection network in the country, unmatched in size, productivity and efficiency. Milk is col- lected through a vast network of village milk centers (VMCs), sub-cen- ters and centers. At these centers, chillers have been installed to lower ters and centers. At these centers, chillers have been installed to lower milk temperature to 4°C for preventing bacteria development during long hauls to the factories, which are undertaken by a large fleet of specially insulated tankers.

In terms of quality, the milk collected by Nestle Milkpak is low in sodium, high in fat and solid-non-fats (SNF) and very low in Total Plate Count (TPC) which, stated simply, means the bacteria count. This was achieved through a comprehensive strategy and sustained efforts to overhaul the milk collection process, intensive education program for the farmers and the milk collection staff, up gradation of milk loading and transportation system, increase in the chilling capacity and above all, adherence to the highest acceptance standards at all milk collection points, including the factories.

As a service to farmers, Nestle Milkpak has established an Extension Service, staffed by qualified veterinary doctors, who assist them in vaccination and treatment of livestock, improved breeding, good ani- mal husbandry practices, provision of high yield fodder seed etc. By taking professional help and guidance to their doorsteps, which they other wise find difficult to access, coupled with incentives and a good and prompt return for their milk, Nestle Milkpak has created a mutually beneficial relationship with the farmers, which translates into opportunities of economic uplift for the rural population.

To promote milk production, Nestle Milkpak is successfully promoting the use of molasses to enrich the fodder and has arranged its distribution to farmers at cost.

1.    Production (product)

As a consequence of joint venture arrangement between Nestle S.A. of Switzerland and Milkpak Ltd. in 1988, the existing production facility of Milkpak in Sheikhupura became a part of Nestle Milkpak

The Milkpak Sheikhupura factory commenced operations in 1981 as a producer of UHT milk. By 1988, it had expanded its operation and was also producing butter, cream desi ghee - all under the brand name of MILKPAK and juice drinks under the brand name FROST.

To meet the demands of the large food market that Pakistan offered, Nestle Milkpak reorganized and reinforced the production of existing brands and gave shape to new production lines. The first to come was a milk powder plant, which not only began producing NIDO in 1990 but was also critical to the production of several milk-based products in the future. With the installation of the roller dryer in 1990, the first such product to come was CERELAC - an internationally recognized brand of infant cereal this was followed by LACTOGEN 1 & 2 in 1991.

The year 1992 saw the introduction of tea whitener EVERYDAY and milk powder in bulk packing named GLORIA. MILO and NESLAC came under production in 1994 and MILO RTD in 1995. Local packing of imported coffee under the name of NESCAFE 3 in 1 commenced the same year. In 1996, Nestle Milkpak's first confectionery plant of POLO Mint was installed and the production of NESTLE PURE ORANGE JUICE commenced. Packaging of coffee under the brand name of NESCAFE CLASSIC was undertaken the same year. In 1997 NESTLE WHEAT and two variants of POLO viz. Strawberry and Orange were introduced.

In 1998 a substantial capital investment was made to launch several products and install two new state-of-the-art technologies. SWEET TREETS were launched in early 1998. The addition of two flavours of POLO: Blackcurrant and Strong Mint increased the number of POLO variants to five. A new variant Lemony was added to the range of popular FROST fruit drink flavours and a new 1-liter packing of FROST was introduced. Flavored milks under the brand FRESH & FRUITY came under production on the new Tetra Filling Machine equipped with the modern "slim" format. MILO RTD and UHT Cream were also shifted over to this new format. A new flexible confectionery line enabled the manufacture of a wide range of high and low boiled sweets and toffees, including TOFFO and two variants of SOOTH ERS' Menthol Eucalyptus and Honey Lemon. Nestle Milkpak also contracted to supply dairy mixes to McDonald's, for its popular soft serves and milk shakes. And to top it all, the most prestigious project, NESTLE PURE LIFE was also commissioned in December. Based on the latest water treatment and bottling technology, this marked the entry of Nestle Milkpak in the Pakistan water market and that of Nestle in the world water market.

The expansion of high boiled sweet line continued in 1999 with the introduction of Fruit Drops and BUTTERSCOTCH.

    The year 2000 saw the production of some exciting products. First came NESCAFE Frothe Original, followed by its two other flavours: Mocha and French Vanilla. NESCAFE Frappe RTD was to come next. The fruit juice range was expanded by the production of Mango and Orange- Mango Mix. On the confectionery side, Tutti Fruity was added under the umbrella of POLO and Wild Cherry was added to the SOOTHERS range. The success of NESTLE PURE LIFE in PET bottles encouraged the commissioning of 5-gallon bottles production line for home and office in June. And the last product line of the year to be commissioned in November was that of NESTLE Plain Yogurt, a high quality product with special Stay-Fresh Seal.

To meet the needs of safe and quality storage for the ever expanding product range and their volumes, a National Distribution Center (NDC) was completed and became functional in June, 2000. Spread over 6614 square meters, it has the capacity to store up to 8300 Spread over 6614 square meters, it has the capacity to store up to 8300 pallets (approximately 8000 tons).

§       Kabirwala Factory

In 1986 Milkpak Ltd. acquired the services of Kabirwala Dairy Ltd. for co-packing of UHT milk under the brand name MILKPAK. Nestle Milkpak acquired KDL in 1990 as a subsidiary and installed a MAGGI NOODLES plant, which became operational in 1992, producing three flavours: Chicken, Masala and Chatkhara. The second milk powder plant was commissioned in September 1996 and produces NIDO, GLORIA and skim milk powder. The UHT line was discontinued in June 1996 and the same year witnessed the launching MAGGI YAKHNI.

With the merger of this factory with Nestle Milkpak in April 1997 Kabirwala Factory, as it is now called, is a fully owned unit of Nestle Milkpak Ltd. The factory milk powder spray drying capacity was doubled in 1999 with the commissioning of the new evaporator. 1999 also saw the installation of a pouch-filling machine, making KWF self sufficient in the filling of full cream milk powder.

A new continuous butter making line is under installation in the year 2000 that will produce very high quality cultured butter under Nestle branding.

§       Indus Fruit Products Ltd.

Indus Fruit Products Ltd. was leased by Nestle Milkpak in 1998 for pulping and production of MAGGI Cold Sauces. Tomato Ketchup, Mitch Masala and Khatti Meethi flavours are being produced under the brand name MAGGI.

2.   Marketing(promotion)

Ø    DAIRY PRODUCTS

Ø    NESTLE MILKPAK UHT MILK

Launched in 1981, it has become synonymous with quality milk. Backed by a very strong brand name, aggressive marketing and distribution plans, consistent quality and availability through out the year, MILKPAK UHT has been extremely successful. In September 1999, MILKPAK UHT milk was launched as NESTLE MILKPAK UHT MILK. NESTLE MILKPAK UHT MILK is available in three pack sizes of 1000, 500 and 250 ml

Ø    MILKPAK BUTTER

A continuous butter-making machine was commissioned at Kabirwala factory in the year 2000 to produce high quality cultured butter. This new butter was an improvement upon the earlier product and carries Nestle branding that endorses its superior quality. It has an excellent taste and aroma endorses its su endorses its superior quality. It has an excellent taste and aroma and is easy to spread

The new NESTLE BUTTER is available in two pack sizes of 200g and 100g in new attractive packaging.

Ø    NESTLE PLAIN YOGURT

Launched in November 2000 in Lahore, NESTLE Plain Yogurt is the latest addition to Nestle Milkpak's dairy family. Its unique 'Stay Fresh seal and a 21-day shelf life gives the brand a formidable competitive advantage. The brand provides valuable access to future product launches in the chilled product category through a dedicated chilled distribution.

In a very short time the brand has gained a substantial market share Through future expansion into markets other than Lahore and a strong marketing and sales support, NESTLE Plain Yogurt will undoubtedly grow into a strong brand and, in time, will achieve status of market leader.

Ø    MILKPAK UHT CREAM

MILKPAK UHT CREAM was introduced under MILKPAK brand in 1986. It is available in 200-ml pack size in an attractive slim pack. The consumer trust in the brand name and the product has ensured its dominant share in the cream category.

MILKPAK CREAM was also introduced in an economical 1000ml pack size in the year 2000. This SKU has been developed for Food Services to cover institutions using large quantities of fresh cream

Ø    MILKPAK DESl GHEE

MILKPAK DESI GHEE was introduced in 1986 in tin packaging. The packaging was later changed to Tetra Pak However, in line with the current market trend; MILKPAK DESI GHEE was relaunched in 1Kg tin packaging in the year 2000. The product was also introduced in 16kg tin packing to 2000. The product was also introduced in 16kg tin packing to tap the huge potential of loose desi ghee.

Ø    NESTLE EVERYDAY

 To target the massive potential offered by the tea-whitening segment, NESTLE EVERYDAY tea whitener was launched in 1992. Supported by aggressive marketing using multi-media activities, focused distribution with sampling drives and excellent consumer acceptance, the brand has shown strong growth and holds good promise for the future.

Ø    NESTLE NIDO

NESTLE NIDO has been present in the Pakistan market since early 70's and on account of the consumer confidence in its quality it has become a pillar of Nestlé’s success. Local production commenced in 1990 and within a short time the brand achieved market leader status in the full cream milk powder category. Made from very superior quality milk and with the addition of vitamins A and D, NESTLE NIDO is the best quality milk for growing children.

The brand has now launched a low unit priced SKU that offers half a liter of quality milk at a very affordable price. NESTLE NIDO is well on its way to becoming a mega brand.