Nestlé plans emerging markets blitz
27 September 2012
Nestlé is planning to treble its sales in Asia, Oceania and Africa to $53bn over the next decade as the food major ramps up sales operations in emerging markets.
Unilever has traditionally led the sector in emerging markets, from where it derives more than half its revenues.
Rival Nestlé, which unveiled its targets at an investor seminar in Shanghai this week, now looks like it is ready to play challenger to Unilever in emerging markets.
In outlining its new targets, Nestlé recognises the varied challenges that emerging markets present, including strong local players in China, aggressive competition across Asia and the availability of resources in Africa.
The strength of competition from local players is illustrated by reported data from Euromonitor that show just four of the top 10 food companies in the zone are multinationals. Two, including the third biggest, Nissin, are from Japan and four are from China and Taiwan.
Nestlé is also aiming to lead the way in areas such as aging and obesity, pointing out that the zone has the fastest greying population: China has 12m people aged over 80 today, compared with 9m in the US; it is projected to have 99m in this age group in 2050 when India will have 48m.
Companies slice the globe differently – Nestlé keeps Latin America in the Americas rather than its Asia, Oceania and Africa division, for example – but the Swiss-based food group is estimated to derive 40% revenues from emerging markets.
Devina Joshi, London