Nestlé highlights sharpened plant-based focus as Starbucks range debuts
14 Feb 2019 --- Swiss giant Nestlé is exploring strategic options for the Herta charcuterie business including a potential sale, as the company reports its full-year results. As a further step in positioning its portfolio towards attractive high-growth categories, the company is looking to potentially divest its cold cuts and meat-based products, in favor of plant-based products to keep pace with current consumer trends. The company continues to pivot its businesses to changing market conditions by unveiling its first coffee lines under the Starbucks name which comes after Nestlé closed a US$7.15 billion licensing deal to market Starbucks Consumer Packaged Goods and Foodservice products globally.
These announcements come as Nestlé reports 2018 full-year results show that organic sales grew 3 percent in the full year, accelerating to 3.7 percent in the final quarter, and net profit surged 42 percent to CHF10.1 billion (US$10.02 billion).
A full-year results press conference was held earlier today, hosted by Nestlé CEO Mark Schneider and François-Xavier Roger, Nestlé CFO. Schneider explained that the company’s financial performance metrics have significantly improved, including revived growth in two of its largest markets, the US and China, as well as its infant nutrition business.
But it’s the move away from meat and into plant-based alongside the company’s renewed commitment to healthy and nutritional food that really stands out.
“Our review strategy is not a one-shot thing, it’s not a photo. Strategy is a movie, something that unfolds over time, a consistent set of actions that gets the company from one place to another in the face of a changing environment,” Schneider said during the press conference today. “This is essentially what we’ve done over the past several years in a very consistent manner and this whole focus on our core food, beverage and nutrition and health products range, that is really shining through now.”
“Inside food and beverage, if you think about today’s announcement on Herta, it really shows how we are positioning the company towards what is benefiting from higher growth and future areas such as plant-based offerings that are very much on-trend with where consumers are heading.”
“This industry is changing very fast and it requires that we also change very fast to stay in step with it and continue with our lead. That has happened in 2018, we’re seeing significant, meaningful progress on all fronts with our acceleration creation model that we outlined in June 2017,” Schneider notes.
Nestlé’s strategic review is gathering pace as demand for packaged foods continues to be affected bya global trend towards healthy eating. Nestlé offloaded its US confectionery business to the Ferrero Group in an estimated US$2.8 billion deal in January 2018, and as dairy and meat demand dips, the company will tap into the alternative burger space with the forthcoming release of The Incredible Burger, due to hit shelves this spring.
Released through the Garden Gourmet brand, the Nestlé plant-based patty will be made from soy and wheat proteins and will compete with other established meat alternatives including the Beyond Burger and Impossible Burger.
