Nestle invests in research for beverages boost

By Neil Merrett

- Last updated on GMT

Related tags Coffee

Nestle intends to step up its focus on beverage production with the
opening yesterday of its first research and development centre
dedicated solely to drink brands destined for the food service

The Nestle Professional Beverage Centre, situated at the company's research and development centre in Orbe, Switzerland, will be the focus for developing new formulations and delivery systems mainly for the group's non-carbonated out-of-home beverage lines.

In an increasingly competitive market place of high commodities and changing consumer demands, companies are coming under pressure to add value to their brands both through functional and health benefits.

Nestle said that with the food service industry becoming an increasingly important area of revenue growth for its operations, requiring a more concerted effort to stay in touch with the market.

Group spokesperson Francois-Xavier Perroud told that the company therefore had decided to focus on pushing its out-of-home coffee, tea and chocolate-based beverage brands, on the back of a company wide shift towards products with health benefits.

"Nutrition, as in all sectors of Nestle, plays an important role in the solutions we want to offer to foodservice operators," he said.

Brands such as Nescafe, Nesquik, Milo, Nestea and Nescau will all undergo development at the centre, the company said.

Through its location in the group's existing R&D site, the company also expects benefits from synergies with other research segments, as a result of a 1,100 workforce at the centre.

The beverage centre will be part of a wider shake up of the group's foodservices division, which was rebranded last month as Nestle Professional.

Nestle said that the out-of-home food and beverage segment, in which it is currently market leader, is one of three higher growth areas that it intends to focus on.

The company claims that sales from its food service division currently amount to €3.6bn, which it hopes will be boosted through a dedicated segment specific research division.

Like a number of its rivals, Nestle has moved to expand it focus towards health and nutrition in a bid to dominate the growing market for added-value products through the acquisition of a number of specialist health and nutrition groups.

In April this year, the company announced a deal to acquire nutrition group Gerber worth $5.5bn (€4bn), following on from the purchase of the Australian cereal business Uncle Toby's, and Novartis Medical Nutrition since 2006.

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