It will also move its technical and production organization and supply chain teams to join the Nestlé Prepared Foods, Pizza, Baking and Professional businesses in Solon, Ohio, while the US IT organization will centralize in St. Louis, MO, which is also home to Nestlé Purina PetCare’s US HQ, said Nestlé USA chairman and CEO Paul Grimwood.
“We carefully considered a number of options and Arlington hits all the marks. Not only is it attractive to our current employees while offering a great talent pool for the future, but this location allows us to be closer to our business operations, our customers and other important stakeholders," added Grimwood, who said 75% of Nestlé USA’s factories and 85% of its top customers were based in the eastern half of the US, while 80% of its products were sold east of the Mississippi River.
The move - to 1812 N. Moore Street, Arlington - would also facilitate closer communications with regulatory groups and NGOs in the Washington, D.C. area, said Grimwood.
The transfer will begin later this year and should be completed by the end of 2018, said the company, which employs around 1,200 people in Glendale. The majority will be offered the opportunity to transfer to Virginia or to Ohio, although it is unclear how many will seek to take up the offer.
A spokesperson told FoodNavigator-USA: "750 employees will be located in Virginia; 300 will go to Solon, Ohio; and the remainder will be transferred to other Nestlé facilities, including our Purina headquarters in St. Louis where we are consolidating our IT organization."
According to the Washington Post, Nestlé - the world's biggest packaged food company - was offered significant financial incentives (more than $16m in state and county subsidies) to come to Virginia.
Get more details HERE about the move from Nestlé, which owns brands including Lean Cuisine, Stouffer's, Nestlé Crunch, Butterfinger, Toll House, Hot Pockets, DiGiorno, Nescafe, Boost, Gerber and Purina.
“In North America, the environment remains deflationary, reflecting both low commodity pricing and pricing pressure in the market. RIG [real internal growth] remains solid but decreased slightly from the first half.
“PetCare and Coffee Mate remain as key growth drivers. Frozen food continues to grow well with further market share gains. After a complete overhaul of the marketing mix, Frozen has reached a normalized level of low- to mid-single-digit growth. Confectionery in the US remains difficult with pressure on the entire category.”
Paul Bulcke, CEO, Nestlé, at the 9-month results sales conference, October 20, 2016