Nestle aims for growth in Central and Eastern Europe

By Linda Rano

- Last updated on GMT

Related tags: Eastern europe, Russia

Nestlé announced at a meeting held in Moscow last week that it is
aiming for accelerated growth in Central and Eastern Europe.

Bernard Meunier, Head of the Nestlé market for Russia and Eurasia, confirmed in his presentation that the company has strong market positions in Russia: number 1 in the chocolate market and number 2 in ice-cream. It was reported in the meeting that Eastern Europe currently accounts for 14 per cent of the company's European annual sales and Central and Eastern Europe has seen double digit organic growth for the past several years. Nestlé said its goal is to accelerate growth in Central and Eastern Europe from 10 per cent to over 15 per cent. Russia and Eurasia is "to be the engine growth in Europe for Nestlé and a centre of competence for the group within the BRIC​ (Brazil, Russia, India and China) markets." Confectionery industry and CEE ​ A number of other major confectioners now also have manufacturing facilities based in Eastern Europe, including Barry Callebaut and Wrigley. Cheaper labour and operating costs are making these countries profitable for food companies. At Nestlé's Moscow presentation, reasons were given why the market in Russia is so attractive. For instance the country has demonstrated continued growth in Gross Domestic Product in recent years, it has the highest GDP per capita in the BRIC zone, and there is a fast growth in income, from 1185 per capita USD/year in 2001 to 4803 per capita USD/year in 2007. In November last year, Nestlé announced the acquisition of Ruzskaya Confectionery Factory, one of Russia's leading chocolate manufacturers. The deal enabled the subsidiary Nestlé Rossiya to acquire chocolate products under the Comilfo and Ruzanna brands. The company said at the time: "The high-quality image of these brands ideally complements Nestlé's chocolate brand portfolio in Russia and will boost Nestlé's presence in the fastest growing segment of the Russian chocolate market, the premium category​." However, it is also working the other way round. Some confectionery companies from Eastern Europe are also taking advantage of the marketing opportunities offered by the west. Kandy, a Polish family-owned business, markets its fruit preparations that can be used in confectionery and ice-cream across the EU. The export and marketing manager told FoodNavigator.com, ConfectioneryNews.com sister site, that the company was looking to build its western markets.

Related topics: Manufacturers, Nestlé

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