The Financial Times reports that Nestle will expand its presence in the nutritional products area, believing that this segment will keep it current with economic and demographic realities.
Currently, according to FT, the company's nutritional division represents just six percent of total sales, but accounts for one-fifth of the company's total research and development budget. "I think this proportion shows you where the future direction of this company is," Peter Brabeck, Nestle's CEO, told FT.
One of the strategic implications of this initiative is that Nestle will depend less on acquisitions for growth, and more on new product development and alliances with other CPG companies.
Currently, according to FT, the company's nutritional division represents just six percent of total sales, but accounts for one-fifth of the company's total research and development budget. "I think this proportion shows you where the future direction of this company is," Peter Brabeck, Nestle's CEO, told FT.
One of the strategic implications of this initiative is that Nestle will depend less on acquisitions for growth, and more on new product development and alliances with other CPG companies.
- KC's View:
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Mainstream retailers under competitive pressure from price/value formats ought to be looking at initiatives like these - as well as the fact that companies like Whole Foods and Wild Oats have healthy growth trends (pun intended) - and see the writing on the wall.
Nutritional education is, as we've pointed out so often, more than a simple responsibility. It is a tremendous opportunity.
