Nestle to roll out new food line; 9-month sales up

AP News
Posted: Oct 22, 2010 2:05 PM
Nestle to roll out new food line; 9-month sales up

Nestle _ the world's biggest food and drink company, known in the U.S. mostly for its candy brand _ said Friday that it is launching new healthier versions of its traditional Stouffer's meals.

Executives with the Swiss food maker gathered in New York to discuss its nine-month sales results, its emphasis on nutritious products and its realignment.

For the first nine months of the year, Nestle's sales rose 4.1 percent from the same period in 2009 as it raised prices worldwide. The increase rounds out 10 years of improved performance in the U.S., even though the weak dollar took a bite of more than 2 percent out of Nestle's revenue as it was translated back into stronger francs.

Brad Alford, Chairman and CEO of Nestle USA, said the Farmer's Harvest line launching in the next few months will add more nutritional value to Stouffer's foods.

Nestle also is deploying environmentally friendly packaging. The bags for a new pet food line coming next year _ Purina One Beyond _ will comprise 90 percent renewable materials.

Alford said many consumers still think of Nestle for its candies, such as Butterfingers, Kit Kat and Nestle Crunch chocolates, but its portfolio also includes Gerber and Coffee Mate and the weight control lines Jenny Craig and Lean Cuisine.

Nestle, which reports earnings only twice a year, said its revenue for the first nine months of 2010 was 82.8 billion Swiss francs ($85.6 billion), compared with 79.6 billion francs ($82.48 billion) for the same period in 2009.

The maker of Perrier and Haagen-Dazs said its sales grew in all regions and categories, with food and beverage sales of 77 billion francs. Adverse currency conditions _ mainly related to the dollar's softness _ reduced revenue by 2.7 percent.

Nestle has nearly saturated the U.S. with its products, which appear in 96 percent of U.S. households, including 9 brands that bring in more than $1 billion apiece here. Its more than 120 factories, distribution centers and other facilities across the U.S. employ more than 51,000 people, about 18 percent of its global work force.

In its core food and drinks business, which has 25 brands including Tombstone and Nesquik, the strongest growth occurred in developing countries. Sales grew 9.2 percent in Asia, Africa and Oceania to reach 12.9 billion francs ($13.37 billion). Sales in Europe increased 2 percent to 15.9 billion francs ($16.47 billion). In the Americas, which include rapidly developing markets like Brazil as well as the nearly saturated U.S. marker, sales rose 5.7 percent to 25.0 billion francs ($25.9 billion).

During the quarter it opened its 200th Nespresso shop _ in Shanghai, China _ and launched the premium Dolce Gusto coffee line in North America, including in 2,000 Walmart stores. Nestle also rolled out its dietary ready meal range Jenny Craig across Europe.

Realigning its portfolio, Nestle sold its remaining stake in eye care company Alcon in the past quarter to pharmaceutical giant Novartis and spent $500 million to expand its medical nutrition business over the next decade.

The company, whose medical nutrition component houses Nestle Health Science and the Nestle Institute of Health Sciences, aims to capitalize on a growing market for foods that can help prevent or lessen the impacts of diabetes or obesity.