The chief of major Swiss food group Nestlé has defended his firm's focus on nutrition in a recent newspaper interview, claiming that healthier foods will offer significant added value to the group, which is aiming for organic growth of 5 per cent to 6 per cent in the next few years.
Since he took over the position of CEO five years ago, Peter Brabeck has often stated his interest in growing nutrition but the company has attracted much more interest for its acquisitions in the confectionery sector and growth in bottled water than for any moves into health foods.
But "nutrition requires a considerably longer lead time than normal food products as regards research and development," Brabeck told the German Lebensmittel Zeitung in an interview this weekend.
"Unlike the many opportunists who only surf on the nutrition wave and make unsubstantiated claims, which can be very dangerous, we obviously also conduct extensive clinical trials. Thus our lead time for developing a genuine nutrition product is between four and six years," he told the paper.
Nestlé currently makes the PowerBar brand (sports bar), which is currently worth around $450 million annually. There will also be increasing activity in infant and medical nutrition, said the CEO. The group, one of Europe's dairy leaders, is already focused on health in milk products with its branded probiotic LC1.
This is because it has the combination of R&D and marketing know-how to transform a commodity product into a power brand with nutritional positioning, claims Brabeck. Sales in children's dried milk achieved revenues of SF1.2 billion last year, and added to nutrition, built a business of around SF6 billion.
"In our opinion nutrition is the next major dimension in value added," said Brabeck. "As we invest 1.4 billion francs in R&D every year, this gives us a trump card. Much of what we are doing today is still fairly small, but it will be big in ten years time, and we must sow the seeds today," predicted the CEO.