Nestle has said its under-pressure US frozen food business should "gain traction" this year – but the Lean Cuisine owner insisted the division only has finite time for attempts to improve its performance pay off.
The world's largest food manufacturer has seen its US frozen food sales suffer in a declining category. Announcing the company's annual results in February, Nestle said it was "systematically" changing the business, including a repositioning of the Lean Cuisine brand and trying to make its portfolio more "relevant" to consumers.
Speaking at the Consumer Analyst Group of Europe conference yesterday (16 March), Nestle CFO Wan Ling Martello said the company expects the division's performance to improve in 2015.
However, Martello admitted she was still facing questions from investors over the unit's future and underlined Nestle was prepared to exit the category if necessary.
"We were very clear in our last earnings call that our big business in the US – frozen food – was a challenge and our expectation is that business will improve and gain traction as the year goes on in 2015," she said.
Nevertheless, Martello added: "I have had during the last two weeks a roadshow and I was challenged by some investors on what we are doing with US frozen. I said that we're obviously giving our local team a chance to fix it but there's a clock on it. You and I could debate on how long should that clock be but there is a clock. It's not religion. It's not like we are not going to walk away from any category or any business in any market that, for whatever reason, we can't fix or we just don't fix. We're very clear on which ones to fix quickly, if not to divest and which ones do we need to accelerate and in what brackets. We have a very clear roadmap internally."
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Nestle has been trimming parts of its portfolio in recent months. CEO Paul Bulcke said last year the company had been "looking at our product and brand portfolio and analysing it through a sharper, stricter lens".
Last February, Nestle announced the sale of its PowerBar unit to Post Holdings. In late 2013, the group completed the sale of its Jenny Craig weight management assets in North America and Oceania.
In November, Nestle admitted it was also "exploring strategic options for the development of Davigel", its France-based foodservice division.