Nestlé Canada has announced it will wind down and eventually exit its frozen meals and pizza business over the next six months in Canada.
In a statement, Nestlé Canada said the decision is driven by the company’s strategy to focus on categories that support long-term business growth and allow for reinvestment in portfolio lines.
This includes confectionery, coffee and beverages, ice cream, infant foods and supplements, health science products, foodservice, premium waters and pet food.
Work With Retail Partners
Nestlé Canada does not have a factory in Canada that manufactures any of its frozen meals or pizza products. The company said it will work with its retail partners to facilitate the exit of the affected products.
The affected product lines include Delissio, Stouffer’s, Lean Cuisine and Life Cuisine.
“Nestlé Canada attributes much of its long-term success to its ability to adapt and evolve within the industry," said John Carmichael, president and CEO, Nestlé Canada.
"This decision enables us to further invest in priority categories. We remain open to enhancing our portfolio where it makes sense for our business."
"We look forward to continuing to offer Canadians great Nestlé products now, and in the future."
Nestlé has 3,700 employees in approximately 12 locations across Canada.
Sustainable Value Creation
At its investor seminar last November, Nestlé shared its strategy for sustainable value creation and outlined its 2025 targets.
Nestlé expects to return to an underlying trading operating profit margin range of 17.5% to 18.5% by 2025, following the margin impact of a sharp increase in cost inflation in 2021 and 2022.
The company also expects to deliver an annual underlying EPS growth range of 6% to 10% in constant currency over the period 2022 to 2025. It plans to trend toward free cash flow of 12% of sales and ROIC of 15% by 2025.
'Creating Shared Value'
"We have made significant progress in recent years, accelerating organic growth, increasing margins and enhancing capital efficiency," said Mark Schneider, Nestlé CEO.
"We will continue to invest for future growth, investing behind our brands, delivering impactful innovation, leveraging digitalisation and improving speed and agility. Creating shared value for stakeholders remains our focus, with Good for You, Good for the Planet at the heart of our strategy."