Food contamination. Although it is Nestle’s responsibility to run thorough quality checks of its products, the company had been reportedly providing contaminated food or other products to the market. Such actions hurt company’s reputation and result in losses.
Trend towards healthy eating. Nestlé is a major supplier of chocolate and chocolate drinks that have high level of calories and due to changing customer habits, will experience decline in demand.
Growth of private labels. The growing number of supermarkets and other retailers are introducing their own label products that cost less and can easily compete with Nestlé’s product portfolio.
Rising raw food prices. With an overall growth of world economy and population, the demand for raw food will rise. The result of that will be higher material costs and squeezed margin for Nestlé
The chocolate market has many competitors such as Ferrero Rocher, Kinder Bueno, M & M's, Hershey's.