Blog: Nestle eyes growth - "everywhere"
Katy Askew | 17 May 2011
Like many of its global food industry peers, Nestle has again emphasised its target to drive growth in emerging markets.
Speaking during an exclusive Q&A conference call hosted by Sanford Bernstein, Nestle CEO Paul Bulcke said that the appeal of emerging markets has resulted in a dramatic step-up in competition, particularly in Brazil, India and China. Local players have become increasingly formidable while multinationals have invested heavily in expanding their presence.
Nevertheless, Bulcke was quick to emphasise that Nestle remained well-positioned to capitalise on the opportunities afforded in emerging markets: "We have...competitive advantages, because we have been there for more than 100 years. We have local management managing these operations there," he said.
While Nestle may feel that it has the march on its competitors in emerging markets, the strategy that really sets the world's largest food group apart from the pack is its intention to look "everywhere" for growth - including "inducing" rising demand in developed markets.
Addressing investors, Bulcke insisted that growth must come from all parts of the business. "First of all, you have to make it explicit to your organisation that you want to look for growth in all parts of the world".
Last fiscal, Nestle generated organic growth of 3% in developed markets such as Western Europe and the US. The group drove expansion in tough conditions through innovation, a focus on "emerging consumers" and its nutrition, health and wellness framework. And, according to Bulcke, opportunities for expansion remain in developed markets.
"Food in Western Europe...is only 10-15% of family budgets...it was much more in the past. I think there is an upside opportunity...but [Nestlé] is not waiting to see the trend happening...it is actually inducing the trend".
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