Will Nestle Sell Off US Confectionary Division?

Nestle may be the world’s largest food and beverage company in the world—a title they have held for many years—but that might soon be changing. The company is currently considering the sale of its US division as part of “strategic options” which could see a deal closing as early as the end of 2017. The US division of the company, of course, is responsible for making the famous Butterfinger and Baby Ruth candy bars, though the deal, the company said, will not include the Toll House line of baking products.

According to the Swiss company, the US confectionary business did nearly $930 million, last year, and the US is is Nestle’s biggest market in this international business: with roughly $27.3 billion in overall sales.

The company was originally founded in 1866 and now currently operates in 191 countries around the globe. In the United States alone, Nestle employees more than 51,000 people through 47 of the 50 states.

Jon Cox, who is the Kepler Cheuvreux head of European consumer equities, notes: “Nestle’s chocolate business in North America has been a distant fourth in terms of market share when company typically aims to be No. 1 or 2, so overall the move toward a disposal is not a surprise.”

Of course, candy is only part of what makes Nestle so successful. The Nestle catalog also includes brands like Purina, Stouffer’s, Nestle Pure Life, Gerber, and Coffee Mate. The continued success of these brands, then, will help to ensure that Nestle can keep its strong hold within the US industry. After all, roughly 97 percent of all households in the United States probably have Nestle products in their refrigerators or pantries at any given time.

All that in mind, then, the company comments, “Nestle will continue to invest and grow in the U.S., where it has leadership positions across a large number of categories such as petcare, bottled water, frozen meals, infant food and ice cream. Nestlé will continue to innovate across these categories to meet rapidly-changing consumer demand.”

Today, Nestle stock closed up 0.43 percent, at 81 Swiss Francs.

 

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