Nestle has said there will be some disposals from its portfolio in order to create what the world’s largest food manufacturer called a “more flexible, more agile, crisp” organisation.
CEO Paul Bulcke told analysts a priority for the company was portfolio management.
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“The most important thing is to have the visibility of where should we fix certain things that are sailing under the radar stream for too long without being part of the party. And that is what we are focusing on,” Bulcke told analysts at the company’s investor conference in Switzerland.
“Divestitures, we’re going to have some. We’re not going to give figures on this, as you can imagine, but there are certain things that are not – [where] we can see all the work on the strategy and all that but we cannot enjoy the business.”
He added: “We want to be in business, not in agony. If something doesn’t really show it, well, we have to be sharp and say, ‘Okay, fine, let’s put our energy not in evading the question, but let’s put the energy in getting into a solution to the problem,’ and that’s how it is.”
The chief executive said there was a “shortlist of fixing”, but did not reveal details of which businesses might be on that list.
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By GlobalData“We are business people. We want to do business, not getting rid of business. But there are certain things that we don’t see we can fix.”
Late last month, the company was rumoured to be looking to sell its energy barbusiness PowerBar. Nestle, however, declined to comment on the report.
The Kit-Kat maker has said previously it is actively looking at its portfolio. “There will be restructuring”, finance chief Wan Ling Martello said in August on the release of Nestle’s first-half sales that were below expectations.
Bulcke, however, said the portfolio management Nestle has talked about is not solely based on what the company can divest but suggested it is certainly a key objective.
“I do believe there is quite an upside here that is going to help us be lighter in structure, Lean Enterprise, and yet, at the same time, faster. The biggest upside for us is to have a much more flexible, more agile, crisp organisation so that our decision-making goes faster, that our responsibility definition is clearer and that our roll-outs of good ideas and a lot of new products is faster.”
Lean Enterprise is a project, or programme, Nestle has adopted as part of its long-term strategy to “attack a difficult industry and a volatile marketplace”.
Selling a large food business would be a new move for Nestle. Its deals to divest its infant-nutrition licenses in Australia and Africa to Aspen Pharmacare in April came only to settle anti-trust concerns after its acquisition of Pfizer‘s infant nutrition business worldwide. They were the first major disposals for Nestle since the sale of its canned tomato business to Del Monte Foods in 1997.
In contrast, Unilever has been busy divesting some major assets in its portfolio as it looks to focus on the faster growing non-food portfolio. The company has generated more than US$1bn in sales so far, with more expected.
