1866-1905 1905-1918 1918-1938 1938-1944 1944-1975 1975-1981 1981-1996 1996-On
1975-1981
After the agreement with L'Oréal in 1974, Nestlé's overall position changed rapidly. For the first time since the 1920s, the Company's economic situation deteriorated as the price of oil rose and growth in the industrialized countries slowed. In addition, foreign exchange rates deteriorated with the French franc, dollar, pound sterling, and mark all losing value relative to the Swiss franc. Finally, between 1975 and 1977, the price of coffee beans quadrupled, and the price of cocoa tripled. As in 1921, the Company was forced to respond quickly to a radically changed marketplace.
Nestlé's rapid growth in the developing world partially offset a slowdown in the Company's traditional markets, but it also carried with it the risks associated with unstable political and economic conditions. To maintain a balance, Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories, Inc., a U.S. manufacturer of pharmaceutical and ophthalmic products.
Taking such a step in a time of increased competition and shrinking profit margins required boldness and vision. Even more than the L'Oréal move, Alcon represented a leap into unknown waters for Nestlé. But, as Group Chairman Pierre Liotard-Vogt noted, "Today we find ourselves with a very wide range of activities, all of which have one thing in common: they all contribute to satisfying the requirements of the human body in various ways."