Nestlé's decision to sell its Buitoni pasta business in North America forms part of a wider series of disposals aimed at making the food giant a more streamlined operation, an analyst has suggested.
Dean Best of GlobalData was commenting following the announcement this week that Nestlé was to sell its Buitoni North America business to private-equity firm Brynwood Partners.
'Step-Up In Efforts'
"It's coming up to four years since Nestlé announced the appointment of Mark Schneider as CEO, and his time at the helm has been characterised by a step-up in efforts to reshape the business through acquisitions and divestments," Best said in a briefing note.
"Out have gone assets such as Nestlé's US confectionery business, candy and frozen-food assets in Italy and dairy operations in Malaysia. More ice-cream assets have been moved to Froneri, the company in which Nestlé owns 50%, while majority control of the Herta meats unit has also been sold."
At the same time, Nestlé has looked to incorporate businesses with strong health and wellness credentials, such as Sweet Earth vegetarian foods, vitamins and supplements group Atrium Innovations and Ecuadorian organic and plant-based company Terrafertil.
Best argues that the Buitoni assets is not he only US-based business that Nestlé could seek to offload, as it seeks to embrace faster-growth categories.
"The overall trend of the largest players in packaged food – including Nestlé – stepping up moves to sell off assets deemed to not offer the best growth prospects will continue," he said.
"In April, Schneider said Nestlé was "working on a number of interesting leads" when it comes to adding to the business through M&A."
Before joining Nestlé, Schneider was the global CEO of healthcare group Fresenius, and he has carried this willingness to invest in wellness products into his new role, as evidenced by the group's recent acquisition of gastrointestinal medication Zenpep.
'With this move, Nestlé aims to expand its medical nutrition business and complement its portfolio of therapeutic products,' the company recently said of the Zenpep acquisition.
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