Nestle boss eyes more deals to boost growth

VEVEY: Nestle Chief Executive Mark Schneider will fine-tune his transformation plans with more acquisitions, he said after the Swiss food group lowered growth expectations on Thursday.

The company had earlier said it will take longer than expected to hit its 2020 organic growth target despite posting its highest annual growth in four years and improved profitability.

Like rivals such as Unilever, Nescafe coffee and Kitkat maker Nestle has been working hard to streamline its diverse portfolio in line with changing consumer tastes and growing demand for healthier and more environmentally friendly produce and packaging.

Under Schneider’s leadership, the group has sought to focus on premium products in fast-growing market segments such as coffee and plant-based foods while retreating from slower-growth areas such as chocolate and processed meat.

But the German-american CEO, who has conducted more than 50 transactions and reviews affecting 12 per cent of group sales since taking charge in 2017, said portfolio management had been “a bit heavy on disposals and a bit light on acquisitions” recently.

This will change in 2020, he said, with small to mid-sized deals the sweet spot.

“We’re a year early on the margin, but have to push back the organic growth target by a year or so,” he told reporters at Nestle’s Vevey headquarters after the company reported 2019 results that showed organic growth of 3.5 per cent.