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2022 Shipper of Choice profile: Nestle

Morningstar report praises company’s supply chain as strong benefit

Photo: Shutterstock

The Shipper of Choice award, presented by FreightWaves in partnership with TriumphPay, recognizes the manufacturers, distributors and retailers that do the best job of keeping the American economy moving by fighting driver detention, providing accessible facilities and understanding what it takes to remove inefficiencies from the supply chain.

Among the top 25 Shippers of Choice for 2022 is … Nestle. 

About Nestle

New York Stock Exchange TickerNSRGY
HeadquartersVevey, Switzerland
2022 revenueCHF 87.1 billion ($90.1 billion)
2021 net earningsUnderlying TOP margin of 17.4%
Shipper of Choice historyThird appearance

Why Nestle made the cut

Food giant Nestle generally receives raves from the analysts that follow the Swiss company. And in a recent report from the analysts at Morningstar, it was the company’s supply chain that received a lot of the kudos. 

“Nestle’s global distribution network and entrenched supply chain relationships render the company one of the most effective platforms to develop and expand brands on a global scale,” Morningstar wrote in a report that followed the company’s release of first-half earnings.

The Morningstar report makes clear that the company’s primary strength is its product offerings on everything from pet food to coffee. But its supply chain operations are a key factor as well.

“Retailers need the stability of supply that only the large, established manufacturers have the bandwidth to deliver reliability over an extended period, while vendors require the consistency of demand given to them by the large retail establishments,” Morningstar wrote. 

Collaborating with retailers on supply chain issues makes Nestle particularly attractive to retailers, according to Morningstar. Noting that partnership can “take many forms,” Morningstar writes that “supply chain collaboration between manufacturers and their retail partners increases the vendor’s value to the retailer.” 

One of the forms it can take is that consumer packaged goods companies, like Nestle, “can often take on some of the financial and logistical burden of retailers’ distribution, enhancing their retailer relationships and boosting their standing against subscale rivals.”

If heft can help make a supply chain more valuable, Nestle is in a good position compared to its food industry peers. 

In what it calls a Peer Snapshot, Moody’s recently compared Nestle to other food companies. In terms of revenue, it rated higher than its other peers by a significant amount: Procter & Gamble, Danone, Hershey and Kellogg. Its EBIT margin was less than P&G and Hershey but higher than the other two.

About Shipper of Choice partner TriumphPay

TriumphPay is the transportation industry’s premier payment network trusted by leading shippers, brokers, factors and carriers. Its innovative and highly automated fintech payment solution brings cost savings and efficiencies to antiquated transportation payment processes for network participants. Integrated financing options leverage the strength of TriumphPay’s parent bank and can provide liquidity and cash flow visibility.

TriumphPay is a division of TBK Bank, SSB, Member FDIC, and a member of the Triumph Bancorp Inc. (NASDAQ: TBK) group.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.