Recently, the CEO of Nestle has some new ideas about its business in China

The new crown vaccine has been vigorously promoted, outdoor activities continue to recover, the birth tide has not arrived as scheduled… All kinds of changes make today’s food and beverage industry different from the outbreak of the epidemic in 2020.

As the “helmsman” of Nestle, the world’s largest food company, CEO Mark Schneider has the latest answer to what opportunities can be grasped in China and even the world under the new situation.

Mark Schneider, CEO of Nestle (photo)

 
Xiaoshidai noticed that in a recent fireside conversation with the head of European consumer goods and beverage business of JPMorgan Chase, Schneider mentioned the opportunities for the accelerated growth of the Chinese market and the prospects of popular categories such as plant-based products.

 
Tonight, let’s hear from the head of the world’s largest food and beverage company.

 
Opportunities for China to accelerate

 
In Schneider’s view, after the adjustment of product mix in recent years, China’s business has been ready to “accelerate”.

 
In response to how to further accelerate the growth of China’s business, he said: “in the past, we have discussed very openly that there are indeed leftover situations and problems that must be dealt with in the Chinese market, and we have done so very actively. As these issues are resolved and controlled, I believe we will benefit from our insights into Chinese consumers and market dynamics. “

 
Xiaoshidai once said that the Swiss food giant’s business portfolio in China has been greatly adjusted, and has focused more on the “key areas” set in China, such as infant nutrition, candy, coffee, flavored food, dairy products and pet care.

 
To this end, Nestle announced last year that it sold its local drinking water business to Tsingtao Beer Group, and sold Yinlu peanut milk and Babao porridge business. At the same time, Nestle also announced a series of capital increase plans and projects with a total amount of more than 730 million yuan in Tianjin, and an investment of 400 million yuan in Harbin Shuangcheng. In April this year, Nestle announced an increase of 230 million yuan in pet food and a series of new investments in Qingdao.

 
“ China is the second largest market in the world. We are very committed to its development and are full of expectation and confidence in the future of the Chinese market. ” Schneider said in the conversation.

 
He went on to point out that Nestle is very excited about the large number of online and digital opportunities in the Chinese market“ First of all, we need to emphasize that we have several areas that we must focus on and show our strength in order to make the truly successful business in China stronger. I think it’s going well in the past few quarters. “

Mark Schneider (photo)

 
The rapid rise of e-commerce under the epidemic situation is a powerful example.

For example, during the Expo last year, Wang Lei, Nestle’s vice president of e-commerce in Greater China, once told xiaoshidai that e-commerce played an important role in Nestle’s growth in China. Since 2020, the company’s e-commerce business in China should grow by more than 30% – 35%, while the previous annual growth rate was basically maintained at 20% – 30%.

In terms of categories, the growth of coffee, adult milk powder and other nutritional products and leisure snacks is particularly obvious. Some categories that quickly switch to the “home” scene have achieved a year-on-year growth of more than 60% – 70%, or even doubled.

 
“ When all this comes together, it shows how much contribution the Chinese market can make. For our regional executives and myself, the first thing to do is to make sure we understand these opportunities. ” Schneider pointed out.

 
New ideas of infant nutrition

 
Xiaoshidai noted that in the above discussion, Schneider also talked about one of the key areas in China: infant nutrition, and revealed new development ideas.

 
He said that although Nestle faces the challenges of birth rate and local brand competition in the Chinese market, it is coping with them by increasing the penetration rate of low tier cities and launching new products.

“I am confident in this, and I need to give enough time to see the positive results that these efforts will bring and continue to push forward. China is the largest infant formula market and we are very committed to long-term success here. ” Schneider stressed.

 
It also said that nestle infant nutrition needs to tap opportunities from adjacent categories.

 
“ In the past, we may have limited our definition of 1000 days of business opportunities in early life, focusing too much on infant formula, infant food and beverage, and infant cereals. But there are more opportunities, so we are very concerned about the adjacent categories that are meaningful to us in this time span. “

“At the moment, I can only confirm the direction, not that we have specific releases or steps to talk about, but this is really an area that we are very interested in and concerned about,” he said

 
Xiaoshidai noticed that JPMorgan also asked in the dialogue that nestle had previously transferred the management of infant nutrition from global management to regional management, but the resulting changes did not seem to be very obvious. In response, Schneider said that he “does not regret” the structural adjustment.

 
“ In fact, this initiative provides us with more detailed information about each region and each market. In a sense, it is also a cost saving measure. Because it avoided the high costs associated with global management, and the original architecture didn’t really add value at that time, so I think it was the right move. ” He said that because of the very positive effect, Nestle has also copied this architecture model in several other categories.

 
Two potential businesses

 

Under the epidemic situation, while expanding the high growth business previously delineated, Nestle has also significantly increased the layout of plant-based and VMS (i.e. vitamins, minerals and supplements) two potential businesses. The former is described by the CEO as an opportunity “once in a lifetime”, while the latter is the main position of Nestle’s recent acquisition.

 
Let’s first take a look at Schneider’s latest view of the plant base.

 
“ In the past three years, we have achieved considerable success in vegetable based food, which is obviously based on 30 years of plant protein processing experience. In this area where there is no compromise, people are trying to replicate hamburgers, sausages, chicken, tuna and other products. In one category after another, Nestle has launched very competitive products, whether in retail terminals or out of home channels. ” Schneider said.

 
According to it, Nestle plant base is a double-digit business with sales rapidly approaching 1 billion Swiss francs (about 7.138 billion yuan)“ Although this is not a high proportion of Nestle’s business, it will inject new vitality into our broader food portfolio. ” He said.

 
Xiaoshidai noticed that nestle had previously added a number of “plant-based” versions to its original products, such as Milo chocolate plant-based milk and plant-based instant latte. Schneider believes that by extending to the plant-based field, Nestle’s dominant categories can burst out greater vitality, such as coffee cream, candy, ice cream and even baby nutrition.

Finally, let’s look at VMS.

 
“ During the pandemic, there was a strong interest in VMS, which increased the growth rate. ” “People prefer to analyze which vitamins, minerals and supplements they may lack and how they should add them to their diet,” Schneider said. I don’t think consumers’ interest in this category will weaken in the future. “

 
VMS is “an important opportunity” for Nestle, he said, and the company also has comprehensive brand equity. According to xiaoshidai, Nestle has established a diversified VMS portfolio, including atrium innovations, garden of life, pure capsules and persona. Each brand has its own unique expertise and focus area.

 
Recently, Nestle also announced that it will spend US $5.75 billion to acquire the core brands of the bountiful company, an American dietary supplement company, including nature’s bounty, Solgar, osteobi flex and Puritan’s pride. Xiaoshidai noticed that the above-mentioned person in charge of JPMorgan pointed out that in terms of amount, this is also the second largest acquisition since Schneider became CEO of Nestle, and the first is the acquisition of part of Starbucks business.

Mark Schneider (photo)

Looking forward to the future, Schneider pointed out that the VMS industry is expected to maintain a decentralized competition pattern for a period of time, but Nestle has the opportunity to integrate its brand assets to create a business platform, which is also being promoted in the United States.

 
It also believes that after mastering professional technology, Nestle can also build VMS platforms in different markets with local brands as carriers“ Because instead of introducing new brands to consumers, it’s better to use local brands that they are familiar with. So this is not much like Starbucks’ global brand authorization model, but to seize the opportunity by using the same core technology. What we have to decide is whether we want to expand the (US) brand to the international market or use the local brand. ” Schneider said.

Pay attention to “xiaoshidai” (wechat: foodinc) “and reply to” Nestle “to see the wonderful news.

Recently, the CEO of Nestle has some new ideas about its business in China

 

据其透露,雀巢植物基是一块销售迅速接近 10 亿瑞士法郎(约合人民币71.38亿元)、增速达双位数的业务。“虽然这在雀巢业务中的占比还不是很高,但它将为我们更广泛的食品组合注入新活力。”他说。

 

小食代留意到,雀巢此前也在原有产品基础上新增了多个“植物基”版本,如Milo(美禄)巧克力植基奶、植基速溶拿铁等。施奈德认为,通过向植物基领域延伸,雀巢旗下的优势品类能迸发出更大的活力,例如咖啡奶精、糖果、冰淇淋甚至是婴儿营养品。



最后再来看下VMS。

 

“在疫情大流行期间,人们对VMS产生了浓厚的兴趣,这提高了增长率。”施奈德认为,“人们更喜欢去分析他们可能缺乏哪些维生素、矿物质和补充剂,以及应该如何将这些添加到饮食中。我认为总体而言,未来消费者对这一品类的兴趣应该不会减弱。”

 

他表示,VMS对雀巢而言是“一个重要机会”,而该公司也拥有全面的品牌资产。小食代介绍过,雀巢目前已建立起一个多元的VMS组合,包括Atrium Innovations(安纯),Garden of Life(生命花园),Pure Encapsulations(倍宜健康胶囊)和Persona,每个品牌都有各自独特的专长和聚焦领域。

 

最近,雀巢还宣布花57.5亿美元收购美国膳食补充剂公司The Bountiful Company的核心品牌,包括自然之宝(Nature’s Bounty)、Solgar、关捷健(OsteoBi-Flex)和普丽普莱(Puritan’s Pride)等。小食代留意到,摩根大通上述负责人指出,就金额而言,这也是施奈德出任雀巢CEO以来的第二大收购,第一大为收购星巴克部分业务。


马克·施奈德资料图片)


展望未来,施奈德指出,预计VMS行业仍将在一段时间内保持分散的竞争格局,但雀巢有机会整合旗下品牌资产打造出一个业务平台,目前也正在美国推进该工作。

 

其又认为,在掌握专业技术后,雀巢也能以本地品牌为载体,在不同市场打造VMS平台。“因为与其向消费者介绍新品牌,不如直接使用他们熟悉的本地品牌。所以这和星巴克的全球品牌授权模式不太像,而是通过使用相同核心技术来把握机遇的。而我们要决定的是要将(美国)品牌拓展至国际市场,还是使用本地品牌。”施奈德说。


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