Nestlé agrees deal for Yinlu peanut milk business to focus on core areas including confectionery

Nestlé has agreed a deal for its Yinlu peanut milk and canned rice porridge businesses in China to Food Wise Co, as it repositions its strategy to focus on other core areas including developing confectionery, reports Neill Barston

The move comes amid growing demand for sweets and snacks within the region, as global chocolate brands in particular continue to enjoy a strong market position within the segment.

As the business noted, China retains significant growth opportunities, and as global economists have noted, it has recovered notably quickly from the global coronavirus pandemic, placing its markets in a strong position. It remains the second largest Nestlé market globally with sales of nearly CHF 7 billion in 2019. Nestlé has invested about CHF 800 million there during the last five years.

According to Nestlé, its latest deal covers all of Yinlu’s operations, including its five factories in Fujian, Anhui, Hubei, Shandong and Sichuan. Yinlu brands had sales of CHF 700 million in 2019. Both parties have agreed not to disclose the financial terms of the transaction.

Food Wise Co., Ltd., a company controlled by the family of Yinlu founder Chen Qingshui, is well-positioned to enable a smooth transition and ensure the long-term success of that business.

The transaction allows Nestlé to focus on key categories in the region, notably its infant nutrition, confectionery, coffee, culinary, dairy and petcare, as well as enabling it to explore further growth of digital capabilities and innovation pipelines. While the value of the deal has not been revealed, it is expected to be completed by the end of 2020.

 

 

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