Nestle expects sales of its health nutrition business to double from five years ago as the Swiss company expands in personalised supplements and allergy treatments, chief executive Mark Schneider said.
Revenue will reach about $4.4 billion (Dh16.1bn) by the end of 2021, Mr Schneider said.
In a consumer landscape dominated by Covid-19, Mr Schneider has been accelerating a drive to refashion a company better known for food and drink brands such as Stouffer’s ready-meals and Nespresso coffee.
The unit “has been on a tear even before the pandemic,” he said. “This is going to be one of our key growth drivers.”
Nestle last month agreed to buy Aimmune Therapeutics for $2.6bn in its biggest push yet into health science, adding a promising peanut allergy treatment to its offering. That follows the $2.3bn purchase of Canadian supplements maker Atrium Innovations in 2018, adding brands such as Garden of Life probiotics and CBD drops.
Sales growth has been strong for vitamins, minerals and supplements, Mr Schneider said. Nestle will also pay more attention to the fortification of food products amid increased demand, he said.
“There is a renewed interest in health and nutrition that advances health and strengthens the immune system,” Mr Schneider said, adding, “I think this is here to stay, certainly throughout the later stages of this pandemic, and we believe also beyond that.”
Nestle shares rose as much as 0.3 per cent in Zurich on Friday. The company’s market value of almost $350bn makes it Europe’s largest company on that basis.
Despite its growth, the health-science unit would still represent less than 5 per cent of the total revenue analysts expect for Nestle next year. Mr Schneider, the first outsider to run Nestle in about a century, has been trying to jump-start the business, which the Swiss company had been calling a growth motor for decades.
The German-American executive has both pruned and expanded the portfolio since becoming the chief executive in 2017. His first major acquisition was supplements maker Atrium, which brought Nestle into a product segment it had avoided. Last year, the company divested Prometheus Biosciences, a San Diego-based developer of personalised treatments for illnesses such as cancer.
Still, the health-science unit lags behind the $10bn of potential revenue that former chief executive Paul Bulcke had predicted for the business about a decade ago.
The supplement market is developing quickly, Mr Schneider said.
“Personalised vitamins, minerals, and supplements are going to be the next frontier,” he said, adding Nestle is working on some new offerings.
“You are moving away from just straightforward supplements, like what I call the vitamin alphabet - A, B, C or D - and you are going to specifically what the certain individual requires.”
