Nestlé Seeks To Diversify From Established Products

Major company Nestlé is seeking to diversify the products it offers for one main reason: with the new health conscious trend that is spreading through consumers, many are choosing to not buy Nestlé's over-processed foods. Because of this they are trying to expand into two markets that are growing fast: baby food and pet food. Making a deal in the water bottle industry is unlikely because the products they do have there, San Pellegrino and Perrier, are more niche and expensive to produce and ship. So that leaves baby food and pet food. While Nestlé has a large share of the world baby food market, it has a weak presence in the U.S. and China. To fix that they are looking for a merger with companies that have a more solid influence in these regions.

Another market they are hoping to break into is pet food. They already have brands like Friskies and Dog Chow that are operating above their target margin, so it obvious that they would want to further expand this section. One reason for the increasing growth in the pet food market is that people in developing countries are turning away from feeding their pets leftover food and instead buying food made specifically for pets. This will also lead to increased profitability in the future.

Nestlé is already a well-established company with large international influence. The resources and advantages that they currently have mean that whichever route they choose to pursue, whether it's pet food or baby formula, it is certain that they will be able to reach a larger audience than smaller brands that mostly operate domestically, allowing them to achieve a larger market share.

After Coffee, It’s Dinner Time at Nestlé