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March 25, 2019

Nestle seeks further innovation in China with new facilities

Food and beverage giant Nestlé is backing product innovation in China with the launch of two facilities.

By Leonie Barrie

Food and beverage giant Nestlé is looking to increase its capacity to innovate in China by opening a new research and development (R&D) centre in Beijing and a system technology hub in Shenzhen. 

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The Switzerland-based group said the R&D centre will enable it to “accelerate trend-based innovation in China to meet fast-changing consumer demand”, while the system hub will “strengthen collaboration with Chinese partners and suppliers in the area of beverage systems.

Nestlé’s R&D centre will focus on creating new food and beverage products primarily for Chinese consumers but also for those elsewhere in Asia. It has facilities that include prototyping and packaging labs, as well as a consumer insight area. 

The site will house more than 40 R&D specialists working across multiple product categories, working on sensory sciences, food technology and nutrition. They will also team up with local universities and innovation partners. The facility also houses the Nestlé Food Safety Institute in China.

The cost of Nestlé’s investment has not been disclosed.

Nestlé CEO Mark Schneider said: “China is one of the fastest-changing food and beverage markets in the world, and a significant growth driver for Nestlé. We are strengthening our local R&D capabilities so that our teams can work faster and more efficiently to turn great ideas into the latest must-have products for consumers in China.”

The Shenzhen System Technology Hub is an extension of the Nestlé System Technology Centre in Orbe, Switzerland. Nestlé said the location, near beverage machine and system manufacturers, will enable it to “rapidly turn new ideas into reality”. 

Nestlé chief technology officer Stefan Palzer said: “We are constantly looking for opportunities to increase the speed of our trend-based innovation. The proximity of the R&D team to the Nestlé China Headquarters and of the System Technology Hub to our suppliers and manufacturers will enable a strong collaboration that will help Nestlé push the boundaries by bringing breakthrough innovations to the market faster.”

Nestlé has operated in China for more than 30 years. It is now the second biggest market for the company which has 33 production sites, three R&D centres and two innovation centres there.

It employs around 43,000 people in the country.

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  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
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