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With its purchase of Pfizer's (PFE) infant nutrition unit, Nestlé (NSRGY) became the biggest player in the infant nutrition business. It didn't hurt that Pfizer's group generated 85% of its sales from emerging markets. Nestlé has been working hard to increase its sales from faster-growing emerging markets, which now account for 45% of the company's sales.
In the most-recent quarter, Nestlé's sales in these markets grew by 8.4%, while sales in developed markets increased by less than 1%.
But Nestlé isn't just infant formula. The largest packaged food company in the world has top-tier market share -- 20 of Nestlé's brands generate more than 1 billion Swiss francs a year in annual sales -- in products from coffee to bottled water.
The category that interests me most going forward is bottled water, where Nestlé, remarkably, has been able to fight off Coca-Cola (KO) and PepsiCo (PEP).
The name of the game here is getting primary shelf space in stores, and Nestlé's brand clout lets the company do that.
Its American depositary receipts trade at 17.5 times projected 2013 earnings per share.