McKinsey: How did Nestlé begin?

Peter Brabeck-Letmathe: A hundred and thirty years ago, infant mortality was high in Switzerland—higher than in most emerging countries today. Henri Nestlé was a pharmacist who was worried about children dying. He developed an infant cereal to help feed them. This was the first Nestlé product.

Henri Nestlé had two big visions. First, he immediately went international: the product was in five European countries four months after launch. Second, he wanted his own brand. Store brands—private labels—already existed, but he was one of the first to create a manufacturer's brand.

He also established a strong identity for his company through the nest image that Nestlé still uses today. It happens that Nestlé in Germany means "little nest," symbolizing all the good values of nurturing such as family, warmth, and caring. When distributors asked him why he did not put the Swiss flag on his product, he is said to have replied, "Anyone can use the Swiss flag, but only I can use my coat of arms. It will be my seal of quality." His house and first factories were in Vevey, Nestlé's headquarters. We also have another head office in Cham, near Zurich, which is...