Blog: Food part of Nestle's investment in consumer healthcare in China

Dean Best | 24 April 2018

Nestle has announced the opening of two consumer healthcare in China, one of which will be supplying foods "for special medical purposes".

The factories, in the eastern Chinese city of Taizhou, fall under the world's largest food maker's Nestle Health Science and Nestle Skin Health divisions.

And it's the former that will be overseeing the facility making the food developed for those whose nutritional requirements cannot be met by normal foods.

In a statement provided with the announcement, Liu Xuecong, secretary-general of the China Nutritional and Health Food Association, said: "The foods for special medical purposes industry is expected to become the new blue ocean for China's health industry. Nestle Taizhou factory is scientifically and technologically advanced and will undoubtedly play an important role in supporting the healthy development of China's FSMP industry.”

Nestle has spent CHF150m on the two plants. Rashid Qureshi, the chairman and CEO of the company's operations in Greater China said the factories "significantly strengthen
Nestle’s product and services offering" in the country.

Last summer, Nestle set out its priority areas for investment and said it would "pursue growth opportunities in consumer healthcare".

Some of that strategy has been in organic. In December, Nestle announced a move to buy Canada-based vitamins and supplements group Atrium Innovations.

Speaking to equity analysts last week when Nestle announced its first-quarter sales, the company was asked about its M&A ambitions in this area.

CEO Mark Schneider said: "I can fully confirm our continued interest [in consumer healthcare] but let me balance by reiterating ... we stand for a disciplined and very focused approach. What we're not interested in is building a broad-based consumer health portfolio that is from soup to nuts. It really has to be focused on some of the core things we bring to the table. Nutrition and metabolism expertise is at the core of what we do and hence and when there's broad-based portfolios for sale that may not be right up our alley. However, when, for example, the Atrium business was for sale that was clearly something we were interested in."

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