Nestlé in health and wellness push

07 September 2012

VEVEY: Nestlé, the food group, is seeking to rapidly develop its health and wellness portfolio, a category expected to witness a substantial expansion in demand around the world.

Speaking to Bloomberg, Luis Cantarell, chief executive officer of Nestlé Health Science, argued its products could help tackle issues like obesity. "The biggest drug in your repertoire is the food you eat three times a day, every day of your life," he said.

The company currently sells a range of offerings in this space, such as Boost shakes, for diabetics trying to balance blood glucose levels, and Peptamen Bariatric Formula, for obese patients with acute illnesses.

It also created a Health Sciences arm in January 2011, housing its existing medical nutrition lines, and given a budget of $10bn to enhance its own stable and invest in promising start-ups.

This unit manages 20 product ranges, including recent additions like Axona, a drink for people with Alzheimer's disease, which formed part of Nestlé's takeover of Accera in July this year.

It similarly bought Vitaflo International, a firm that makes goods to help metabolic problems and renal disase, alongside CM&D Pharma, a company hoping to develop chewing gum for sufferers of kidney diseases.

Earlier this year, Nestlé opened a specialist centre in Lausanne, Switzerland, to carry out clinical trials. It spends over $1bn on such research each year.

At present, the organisation is undertaking 40 tests aiming to prove that its products can cut the amount of time patients remain in hospital, and reduce the need for expensive drugs.

"The biggest challenge is to be able to turn these ideas into reality and to convince through fact," Cantarell said. "This is a marathon-running exercise."

Nestlé first attempted to enter the health and wellness segment via a tie-up with Baxter International, the healthcare group, but this effort was halted in 1996.

In 2006, it formed Nestlé Nutrition, which purchased the Jenny Craig weight loss brand from Novartis, as well as Gerber baby food, and PowerBar supplements for athletes. This unit, however, fell short of sales expectations, and was split up last year.

By contrast, Nestlé Health Sciences has been set a rather different objective; namely, to emerge as the leading medical food producer in the next decade.

Data sourced from Bloomberg; additional content by Warc staff