Nestle Confirms Potential Sale of US Confectionery Business

3471bb54-2853-487e-a1ec-2f8f52dea5f8articleimage.jpg

16 Jun 2017 --- Nestlé is considering a possible sale of its US confectionery business as it explores “strategic options” as part of an on-going review examining future growth of the company. Only focusing on the US market, Nestlé’s review should be finished by the end of the year, but the announcement signals that the confectionery giant is clearly considering pulling out as a likely option. 

Global chocolate sales have been stagnating as consumers switch to healthier alternatives and Nestlé has been struggling to boost profits and market share. 
 
With sales of around CHF 900 million (US$924million) in 2016, Nestlé's US confectionery primarily includes popular local chocolate brands such as Butterfinger, BabyRuth, 100Grand, SkinnyCow, Raisinets, Chunky, OhHenry! and SnoCaps, as well as local sugar brands such as SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts. It also comprises the international chocolate brand Crunch.
 
According to Nestlé, the strategic review does not cover its iconic Toll House baking products, a brand which the company will continue to develop in the US market. The company also stresses that it remains “fully committed to growing its leading international confectionery activities around the world”, with particular emphasis of the global brand KitKat. 
 
Nestlé's global confectionery sales amounted to CHF 8.8 billion (US$9 billion) in 2016.
 
With sales of CHF 26.7 billion (US$27.4 billion) in 2016, the US is Nestlé's largest market. The confectionery business represents about three percent of US sales and Nestlé products can be found in 97% of US households under brands such as Purina, Nestlé Pure Life, Coffee-Mate, Gerber and Stouffer's. 
 
The company employs more than 51,000 people in around 120 locations across the US, including 77 factories and 10 R&D centers.
 
Nestlé chief executive Mark Schneider was appointed at the start of 2017. He in under pressure to boost profitability at the Swiss Group.

However, rather than invest in the US confectionery business further, Nestlé will focus on other growth opportunities. 
 
“Nestlé will continue to invest and grow in the US, where it has leadership positions across a large number of categories such as petcare, bottled water, frozen meals, infant food and ice cream. Nestlé will continue to innovate across these categories to meet rapidly-changing consumer demand,” says a statement. 

To contact our editorial team please email us at editorial@cnsmedia.com

Related Articles

Business News

Weekly Digest: ADM receives recognition for diversity, AB InBev develops energy-efficient brewing method

20 Apr 2018 --- This week in business, ADM was named by USG Corporation (USG) as its Diversity & Inclusion Supplier of the Year for 2018. The Supervisory Board of GEA Group and the Chief Financial Officer of GEA Group mutually agreed that Helmut Schmale would step down from the Executive Board before the termination of his appointment, which is due to expire at the end of March 2021. Meanwhile, Ireland’s largest exporter of Irish dairy products, Ornua announced the appointment of John Jordan as Chief Executive Designate and Tate & Lyle appointed of Imran Nawaz to the position of Chief Financial Officer, and to the Board of Tate & Lyle, with effect from August 1, 2018. Mondelēz International has inaugurated its newest “Factory of the Future” in the Kingdom of Bahrain as it aims to meet the growing consumer demand and Bell & Evans will invest US$260 million in building a new poultry harvesting facility in Pennsylvania in its new expansion strategy in the US.

Business News

Nestlé sales edge up in Q1, on target to grow by 2-4 percent this year

19 Apr 2018 --- Nestlé has reported a “solid” start to the year with organic growth of 2.8 percent and sales edging up 1.4 percent to CHF 21.3 billion (US$22bn). The Swiss transnational food and drink giant says that excluding the US confectionery business which was divested at the end of March, organic growth was 2.9 percent. RIG (Real Internal Growth) accelerated to 2.6 percent and continued to be at the high end of the food and beverage industry, while pricing was 0.2 percent, largely reflecting lower levels of inflation in emerging markets.

Business News

Blockchain: BASF and arc-net team up to use trailblazing technology for livestock sustainability

18 Apr 2018 --- The world’s largest chemical producer BASF and arc-net are joining forces to use blockchain technology for livestock sustainability. The system captures data to provide an environmental footprint with full transparency and traceability along the entire value chain. The partnership is just the latest example of how the food industry can harness the power of blockchain technology.

Food Ingredients News

Sustainable solutions key drivers for innovation at Empack 2018

18 Apr 2018 --- Sustainable packaging solutions were the pulse of this year’s Empack, held in Utrecht, the Netherlands. Empack aims to display on-trend marketing innovations, trends and technology in all things packaging. FoodIngredientsFirst visited Empack to gain an insight into some of the innovations that dominated the show.

Food Ingredients News

Pur Natur-Kaneka Corporation tie-up enters Japan’s dairy products market

16 Apr 2018 --- Tokyo-headquartered Kaneka Corporation has signaled its entrance into the dairy products business as its affiliate food sales company, Kaneka Shokuhin Co., Ltd begins to sell “Milk for Bread” at bakeries around the city.

More Articles