Chairman and CEO of Nestle, Peter Brabeck-Letmathe, gestures during the annual shareholders meeting of the Swiss based giant food company in Lausanne.
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By then he was back in Switzerland, in charge of marketing. When CEO Helmut Maucher began redefining Nestle's product and branding strategy, he leaned increasingly on Brabeck. He even took to calling Brabeck Suslov, a joking reference to Mikhail Suslov, notorious chief ideologist of the Soviet Communist Party. The new product strategy involved grouping all Nestle products under six global brands, including Nescafe, Nestea and Nestle itself. Once it was launched, Brabeck grew restless and asked to be sent back into the field. Maucher was then in his mid-60s and close to retirement. Brabeck technically reported to the chief operating officer, who was widely expected to become the new CEO. Maucher asked Brabeck bluntly, "What is it you truly want?" Brabeck's reply: "The chair you're sitting in." Several months later, Maucher announced that Brabeck would succeed him.
To understand Brabeck's strategy of cost-efficient global growth, unwrap a Kit Kat. Nestle acquired the chocolate-covered wafer bar in 1988 when it bought Britain's Rowntree. Today it's a $1 billion business, says Patrice Bula, head of the chocolate division at Nestle headquarters, and the company is pushing Kit Kat as its answer to the Mars bar, the world's most popular candy. Last year Nestle started producing Kit Kats in Russia and Bulgaria for Eastern Europe. A Latin American launch is slated this year. Kit Kat is already selling briskly in Japan, Australia and India, and a relaunch is under way in Thailand.
Unlike Coca-Cola's, Kit Kat's formula is different almost everywhere. A Russian Kit Kat is a fraction of an ounce smaller than a Bulgarian one, and the chocolate is coarser and not as sweet as that in a German Kit Kat. In Japan, strawberry-flavored Kit Kat is all the rage. Each of these product variations is the result of thorough market research on local tastes. "There is no global consumer for the food-and-beverage business. This is a deep belief we have," Brabeck says.
But there is a gaping hole in this global strategy: Nestle doesn't control Kit Kat in the biggest chocolate market of them all, the U.S. Back in 1970, Rowntree licensed the brand in perpetuity to Hershey. The only way for Nestle to get it back would be a change of heart--or a change of control--at Hershey. So when the Hershey Trust put the company up for sale last year, Nestle saw a ripe opportunity. Brabeck made an agreement with Britain's Cadbury Schweppes under which it would return Kit Kat and another brand, Rolo, to Nestle if Cadbury made the winning bid for Hershey. In the end, the Hershey Trust dropped its sale plans, but Nestle has not given up hope. Brabeck says he's "willing to go a long way" to get the brands back "because they belong to our family."