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November 9, 2021

Nestlé invests in pet-food production

The Purina maker is increasing its output of cat food at a plant in central Europe.

Nestlé is again investing in its manufacturing of pet food, a growing business for the Swiss giant.

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  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
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The Purina maker is upping capacity at its plant in Bük in western Hungary, which is Nestlé’s principal pet-food factory for central and eastern Europe. A further 120 jobs will be created through the HUF35bn (US$112.5m) investment, the world’s largest food maker said.

From the fourth quarter of 2022, the factory will be able to produce another 50,000 tonnes of cat food a year, Nestlé said. The plant, located close to the border with Austria, supplies export markets. Around 80% of its production is shipped outside Hungary.

“We will be able to ship more than 90 trucks of pet food a day to 50 countries around the world from the autumn of 2022 instead of the current 70,” Péter Noszek, MD of Nestlé’s business in Hungary, said.

The investment is the latest made at the Bük plant. Last year, Nestlé spent HUF50bn to expand the site.

The company has two other factories in Hungary, both in the east of the country. A site in the town of Szerencs manufactures instant coffee and cocoa products and a plant in Diósgyőr makes hollow chocolate figures. In total, the group employs around 2,400 staff in Hungary.

When Nestlé announced its third-quarter sales last month, the company said its Purina PetCare business had seen sales rise at a “double-digit” rate year-on-year. Within the group’s Europe, Middle East and north African markets, the division also saw a double-digit rise in sales. Nestlé said the growth in the region was “driven by premium brands Felix, Gourmet and Purina Pro Plan, as well as veterinary products”.

In the first nine months of the year, Nestlé saw sales from its global pet care business reach CHF11.36bn (US$12.47bn), up 12.1% on an organic basis and by 9.9% when the impact of pricing was removed from the figures.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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