nchanged at 50 percent since 1985. Nestle is attempting to overcome the drawback of static markets by developing innovative food products.
One of the innovative food products that Nestle is counting on to boost sales is "chilled entrees." Nestle's chilled entrees are elaborate, freshly prepared meals that are refrigerated, not frozen. The benefit of this food process is improved taste over frozen foods; the drawback is a narrow margin of error in shipping and handling, which could cause the entrees to spoil quickly. Chilled entrees are popular in the United Kingdom, but have met with only limited success in the United States. Campbell Soup company recently divested its fresh food unit.
Nestle has demonstrated the ability to succeed in areas where other companies have failed. As one industry expert puts it, "When Nestle focuses on a specific product, the best thing to do is: 'Duck'" (Miles, 1988, p. 58). Countless food industry rivals have resorted to "ducking" Nestle in the past, but the food giant is not without its troubling competitors.
An example of increasing inroads into Nestle's dominance is the coffee sector. Nestle sells Taster's Choice, Hills Bros., MJB, and Chase & Sanborn. In the U.S. market, Nestle is number three behind Philip Morris (Maxwell House) and Procter & Gamble (Folgers). The big roasters have responded to the stagnant market by initiating price wars. Cuts of 30 cents per can have been common. When one giant cuts prices, the other two follow suit.
As mentioned earlier, coffee consumption in the United States has remained flat for more than a decade. But certain sectors within the coffee market have experienced significant growth. One of these sectors is the consumption of freshly ground coffee, which is growing at a rate of between 7 percent and 10 percent annually (Moukheiber, 1995, p. 78). Nestle has been slow to tap the potential of this market, taking a cautious approach perhaps ...