When searching online for the world’s largest food company Nestle tends to top most lists. The problem with many of these lists is that they select companies based on their overall revenues despite the fact that large percentages often come from non-food products.
It is true that Nestle’s revenues came in at more than $91 billion (USD) in FY 2020 but how much of that revenue came from food sales? Nestle is categorized as a food and beverage company and it’s operations are huge. It’s beverage category alone qualifies it as the 2nd largest beverage company behind only AB InBev. This doesn’t mean that Nestle is not a major food company – it is – with well known brands that include Cheerios, Hot Pockets, Lean Cuisine and of course some of the leading names in confectionary.
Nestle operates via 7 primary business lines, the largest of which is its ‘Powdered and liquid beverages’ business followed by its ‘Pet care’ business which is anchored by the Purina brand. The company’s operations in the Dairy sector brings in 13% of overall revenue. It’s best known food brands fall under the ‘Prepared dishes and cooking aid’ division and that accounts for nearly 14% of overall sales as shown in this table outlining revenues for 2020:
| Business Unit | 2020 Revenues (USD) | |
| Powdered and Liquid Beverages | $24.1 billion | |
| PetCare | $15.2 billion | |
| Nutrition & Health Science | $13.3 billion | |
| Prepared dishes & cooking aids | $12.5 billion | |
| Milk products and ice cream | $11.9 billion | |
| Confectionery | $7.6 billion | |
| Water | $6.9 billion | |
Assuming that pet foods and beverages are not really food products – and depending on what products one chooses to include in food sales – it’s fair to estimate that between 25-30% of Nestle revenues belong in the food category. Even estimated at $25 billion (USD) Nestle is a powerhouse in the food industry. By comparison, Unilever’s Food & Refreshments division boasts $22.25 billion in revenue and Kraft Heinz total sales in 2020 were $26.2 billion.
Conclusion
Nestle is indeed a dominate force in the food industry but whether it is the “world’s largest food company” depends on how you categorize. For further perspective, 55 percent of Pepsico’s $70.4 billion in 2020 sales were attributed to it’s food brands. Cargill, which also quite often appears in the one position on largest food companies lists, has over $135 billion in revenue. Cargill’s operations tend to be further downstream as it is a major player in the ingredients, agriculture and commodity space.