Nestlé, the Swiss food and drinks giant which has been operating in China for more than 30 years, is undeterred by the economic upheaval caused by COVID-19 and intends to expand its presence in some key consumer segments.
These include a foray into China’s rapidly expanding “meat-free” market with the development of the company’s first production facility in Asia for plant-based products.
Nestlé announced last week that it would invest more than 100m Swiss Francs (RMB730m, US$103.6m) to expand its existing facilities in the Tianjin Economic-Technological Development Area (TEDA) to tap into the “quiet revolution” of plant-based substitute food.
According to Reuters, research firm Euromonitor has estimated that China’s free-from-meat market increased 33.5% since 2014 to be worth about $10bn in 2018 and is on course to be valued at $11.9bn by 2023.
Quite apart from the coronavirus pandemic, China, which consumes about half of the world’s pork, has also suffered from an outbreak of African swine fever, while trade tensions with the US have driven up the price of imported meat.
With its new plant-based processing capabilities in Tianjin, Nestlé stands poised to benefit from the growing trend in China for healthier eating options, while also strengthening its long-term commitment to the country.
“Having successfully managed the effects of the COVID-19 pandemic with the support of the Chinese authorities, Nestlé has decided to increase its investments in China which is another clear demonstration of our long-term commitment and confidence in the country,” said Rashid Qureshi, chairman and CEO of Nestlé Greater China.
“By launching a series of innovative products in Chinese markets, we hope to further enhance people’s quality of life and contribute to a healthier future,” he added.
On top its plans for plant-based food, Nestlé’s investment includes a significant expansion of its Purina pet food facility, an upgrade to the production line of its Chengzhen Wafer, as well as development of the Tianjin Nestlé Quality Assurance Center.
Sourced from Nestlé, Reuters; additional content by WARC staff