Nestlé sheds its image as a chocolate company through internal innovation & acquisition

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By Elizabeth Crawford

- Last updated on GMT

Through a two-prong approach focused on innovation and acquisition, Nestle is remaking its image from a company perceived in the US to make primarily chocolate and confections to one that is “fit for the future” with brands across multiple categories including plant-based frozen foods, infant nutrition and low- or no-calorie beverages.

“In the US, when you talk about Nestle, people typically go to chocolate. Whereas, in the rest of the world, Nestle is known as a leader in nutrition, health and wellness. There is just a greater awareness of the brand,”​ Doug Munk, director of new business ventures, told FoodNavigator-USA.

Speaking at the opening of Nestlé’s new US headquarters in Arlington, Virginia, Munk explained Nestlé hopes to reshape its image in the US into one that more closely aligns with rising consumer demand for healthier products. As part of this effort, the company sold its US confectionery business to Ferrero for $2.8 billion, and it has renovated nearly 2,000 products since last year to reduce sodium and sugar “north of 5% in each of those areas,” ​according to Munk.

He noted, “A key part of the strategy is, one, taking our core brands and really understanding how we can make them better from a nutrition, health and wellness standpoint, and make it more relevant to what consumers are looking at today, regardless of which category we are in.”

Fostering internal innovation

In addition to streamlining its portfolio and renovating core brands, Nestlé is focused on innovating and launching new products internally by tapping into the creative ingenuity of its employees across job functions and offices.

“In the past, the traditional innovation approach has been really focused on the marketers and R&D, but that is the old model of innovation. The new model is everyone is an entrepreneur. Everyone has innovative ideas,​” Munk said.

For example, he pointed to the recent launch of the frozen bowl brand Wildscape, which was created by an entrepreneur within Nestle.

Another area of innovation where Nestlé is focused is on snacking, Munk said. He explained that Nestlé is looking into three main areas of snacking: free-from, alternative ingredients, such as grain-free or plant-based, and functional ingredients that empower consumers to take control of their own health through a better diet and balanced lifestyle.

Looking beyond Nestlé’s walls

Nestlé also hopes to stay ahead of the trends curve by “scouting companies that are doing a great job of meeting consumer needs out there in the marketplace,”​ Munk said.

Recent example of acquisitions that do this and expand Nestlé's reach into new categories are the purchase of plant-based food company Sweet Earth, coffee company Chameleon Cold Brew and the more recent alliance with Starbucks through which Nestlé will bring Starbucks packaged coffee into more regional markets globally.

Looking forward, Munk says Nestlé will continue to pursue this multi-prong approach and believes it can ultimately expand its household penetration beyond its current 97% to 100% in the US.

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