Nestlé confident of growth recovery in China

Related tags Nestlé

Swiss food giant Nestle has stepped up its marketing in China to
win back customers after its recall of milk powder products earlier
this year.

In an interview with Bloomberg, chief executive Peter Brabeck said that the firm is spending more on marketing, such as in-store promotions and sampling, and is introducing herbal mineral water to tap local demand for health products.

Nestle recalled two of its milk powders in June after authorities found high levels of iodine in the products. The recall has had an impact on the group's sales in the region.

Sales growth in China, Hong Kong and Taiwan slowed to 7.5 per cent in the first half from 13 per cent last year, following the withdrawal of Neslac.

But Brabeck told the news service that he was "quite confident that we should be able to have again this fantastic growth that we've enjoyed over the last five years".

The milk powder packaging now carries a sticker with a 'thumbs-up' logo to show that it meets iodine standards.

The Chinese market is key to Nestle's growth strategy. Sales in the country grew 20 per cent on average excluding currency and acquisition effects over the past five years compared with food-industry growth of 10 per cent, according to Brabeck.

The firm currently employs about 12,000 staff at 21 factories in China. Half of its Chinese sales are made on infant formula and other nutritional products, with the rest from Nescafe instant coffee, other cold beverages, Nestle ice cream, KitKats and Maggi soups and sauces.

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