News Focus: Health and Wellness
Nestle pursues human nutrition through acquisition strategy
health and wellness approach of major US companies examines
Nestlé's increasing focus on research and development as a means to
improve human nutrition.
"We are focused on transforming Nestlé to a health and wellbeing company," said Matthew Roberts of Nestlé's corporate venture funds acquisitions and business development. And the major strategy adopted by the firm in its pursuit of this is an extremely targeted acquisition policy. "That's where Nestlé is unique - our M&A strategy and our R&D vision are connected at the hip," said Roberts. The two most recent examples of this are the firm's takeover of Novartis Medical Nutrition and Gerber. Last month, Nestlé acquired Novartis for a total of $2.5bn, a move that catapulted the Swiss firm into the top end of the medical foods market. The firm announced its interest in December, after months of speculation that it was eyeing up the unit as a springboard from a minor player in the medical foods market to the world number two. In addition to bolstering Nestlé's health and nutrition division, the deal came with 2,000 workers whose expertise will boost the company's R&D capability. In April this year Nestlé also announced plans to acquire Novartis' US baby food brand Gerber, a further sign of the group's transition towards a healthier profile in line with consumer demand. "We want to focus on bigger, bolder, better initiatives," said Roberts. Nestlé's pharmaceutical and cosmetics assets - such as Gladerma, L'Oreal, Inneov, Alcon and Sofinol - play a major role in the firm's strategic focus, he said. "It's the idea of leveraging one part of Nestlé for another." The company currently spends 1.7 percent of its revenue on research and development efforts, which translates into $1.7bn a year. According to Roberts, "a good part" of this is spent on nutrition and wellness. In its bid to stay one step ahead of competitors in the growing market for value-added products, Nestlé is also on the look out for external innovation. "If you have an innovation, a technology or a business model that works with health and wellness then come and see us - we're interested in it," Roberts told attendees at the recent IFT food expo in Chicago, where he participated in the session Senior Executives Cut the Fat on Industry's Approach to Health and Wellness Foods. Other participants included executives from General Mills, Kraft, and Campbell. To read the FoodNavigator-USA.com article on General Mills, click here. To read the article on Kraft, click here. To read the article on Campbell, click here.
