Nestlé Switches R&D, Marketing Emphasis to Healthier Foods

24 October 2003

Swiss-headquartered Nestlé, the world's largest food company, on Thursday announced a significant shift toward higher-margin nutritional products. The move, directed primarily at developed markets, heralds a drive for improved sales and profits growth.

Chief executive Peter Brabeck explained that Nestlé's nutritional division today generates just 6% of group sales but accounts for around 20% of R&D expenditure. "I think this proportion shows you where the future direction of this company is," he said.

But Brabeck denies the move to healthier products is simply a response to the growing zest for legal action against food and restaurant companies - especially in the US where obesity has become a litigation growth industry. The new strategy reflects changing economic and demographic realities, he insists.

Data sourced from: Financial Times; additional content by WARC staff