Nestle to expand health nutrition business as COVID-19 boost demand

By Rahul Vaimal, Associate Editor
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Nestle, one of the largest food and beverage companies in the world, expects the sales of its health nutrition business to double from five years ago, Chief Executive Mark Schneider said.

The Swiss company is investing in customized supplements and allergy therapies and is predicting that by the end of 2021 sales will hit nearly $4.4 billion. Schneider believes that the segment is going to be one of the main drivers for the brand’s growth.

Mr Schneider has been driving a push to reshape a business best known for food and drink brands like Stouffer’s ready-meals and Nespresso coffee in a market environment dominated by COVID-19.

Last month, Nestle agreed to buy Aimmune Therapeutics which is a US based biopharmaceutical company that develops treatments for life threatening food allergies, for $2.6 billion in its biggest drive yet into health research. The acquisition offers a promising peanut allergy treatment. This follows the $2.3 billion acquisition in 2018 of Canadian supplement manufacturer Atrium Innovations, adding brands such as probiotics and CBD drops from Garden of Life.

For vitamins, minerals and supplements, sales growth has been high, Mr. Schneider said. Nestle will also be paying more attention to fortifying food items in the face of increased demand, he said.

Mark Schneider
CEO, Nestle

“There is a renewed interest in health and nutrition that advances health and strengthens the immune system. I think this is here to stay, certainly throughout the later stages of this pandemic and we believe also beyond that. The market for supplements is developing rapidly. Personalized vitamins, minerals, and supplements are going to be the next frontier, where you are going to specifically provide what the certain individual requires.”

Since becoming the chief executive in 2017, the German-American executive has both trimmed and broadened the portfolio of the global brand. His first major acquisition was Atrium – supplements maker, which took Nestle into a segment that it had ignored earlier. Last year Prometheus Biosciences, a US-based maker of customized therapies for diseases like cancer, was divested by the firm.

But the health-science unit of Nestle still lags behind the $10 billion potential revenue for the company that former chief executive Paul Bulcke had forecast around a decade ago.