Nestlé exploits new trends

21 December 2010

VEVEY: Nestlé, the food group, is seeking to exploit two long term trends, in the form of ageing populations and the rising demand for health and wellness products, to drive growth.

To achieve this goal, the Swiss firm has launched Nestlé Health Science, a new unit that will deliver goods aimed at avoiding or treating heart disease, diabetes and other conditions.

Within this, the Nestlé Institute of Health Sciences is to conduct investigations into how conditions emerge, alongside analysing areas like DNA and genetics.

"Nutrition, health and wellness has been our basic agenda over the last few years," Paul Bulcke, Nestlé's chief executive, told the Wall Street Journal.

"Now we are looking at deeper, scientific solutions to personalised nutritional problems and answers to chronic diseases."

Nestlé intends to invest more than $500m (€379m; £321m) in the Institute during the coming decade, to leverage a substantial gap in the market for offerings falling between the food and pharmaceutical sectors.

"The health-care costs of our society are going through the roof. The best health inducer is food. If you don't do that right you will have health-care costs you can't cope with," said Bulcke.

"Food which brings nutrition and helps health has more value for society at large. We want to be part of that."

Each extension to the company's portfolio must demonstrate an advancement concerning health credentials, such as adding nutrients to products in countries where diets typically lack a particular vitamin or mineral.

However, Bulcke suggested emotional considerations still play a role.

"This adds real and honest arguments to what food should be. Food should keep you alive; it should also be convenient and be pleasurable as well as being part of a healthy diet," he said.

While developing original items in-house will be integral to Nestlé's activity, as was the case with Clinutren supplements, acquisitions are likely to prove key.

"This has huge potential. It is going to be multi-billion," Bulcke said. "Our institute is not going to be there to invent everything, but to be the platform for building and bringing in what is out there."

Data sourced from Wall Street Journal; additional content by Warc staff