The announcement came amid major global CPG firms, including Mondelēz, Hershey and General Mills, axing jobs and plants as part of their margin growth strategies.
ConfectioneryNews previously reported Oreo cookie owner Mondelēz has initiated a consultation process to close its Cadbury plant in New Zealand in early 2018 as it is an expensive place to manufacture products.
Nestlé’s Auckland factory currently manufactures some of Nestlé’s key brands, including Maggi and Scorched Almonds. The company said its annual exports of over $60m are expected to increase with the expanded capacity.
“Our international research and development program now allows us to create high quality gluten free products that taste great and maintain texture. Gluten free no longer means compromise,” CEO of the New Zealand division, Veronique Cremades, said in a statement.
“For the one in 100 New Zealanders diagnosed with celiac disease, a strict lifelong gluten-free diet is essential.”
It is noted that the gluten-free facility is located at the same site of Nestlé’s Auckland factory, but is under a different operation, according to the company.
Maggi and Docello among gluten-free brands
Upon the establishment of the new facility, a range of Nestlé products will be made gluten-free, including a selection of Maggi products sold in supermarkets for at-home use, as well as Docello dessert mixtures used in professional food service, the company said.
“The reason gluten free is important in the food service sector is that it’s much simpler for a chef to manage one line rather than two… This also reduces the risk of cross-contamination, keeps complexity down and keeps cost down,” Nestlé New Zealand’s spokesperson, Margaret Stuart, told ConfectioneryNews.
Euromonitor’s latest data shows that the Maggi brand makes up 0.7% of New Zealand’s entire packaged food market.
The market research firm did not disclose Nestlé’s market share in the country, but said the company’s shares ranked sixth and third respectively in package food and confectionery categories.
According to Nestlé’s full-year 2016 results, the company generated total sales of CHF 14.5bn ($14.36bn) from its Asia-Oceania-Africa (AOA) region compared to CHF 14.3bn ($14.21bn) in 2015. The rest-of-the-world sales, which excludes the US, greater China region and its home base of Switzerland, posted CHF 54.8bn ($54.25bn) compared to CHF 54.9bn ($54.39bn) in 2015.
As for the confectionery segment, Nestlé posted total global sales of CHF 8.7bn CHF ($8.6bn) in 2016 compared to CHF 8.9bn ($8.8bn) in 2015.