Nestle Eyes Q1 2018 Sale of U.S. Confectionery Unit

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Nestle Eyes Q1 2018 Sale of U.S. Confectionery Unit

12/27/2017
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VEVEY, Switzerland — Nestle expects to sell its U.S. confectionery business in the first quarter of 2018, following a review launched earlier this year as part of efforts to improve performance at the company.

In June, Nestle said it was exploring strategic options for the $900-million per year business, which includes popular chocolate brands like Butterfinger, BabyRuth, 100Grand, Skinny Cow, Raisinets and sugar brands like SweeTarts, LaffyTaffy, Nerds and Runts. It also comprises the international chocolate brand Crunch.

The review was limited to the United States, where Nestle is No. 4 behind Mars, Hershey and Mondelez. The review did not cover Nestle's Toll House baking products.

"Our strategic review has led to us deciding to divest the business and a robust sale process is currently underway which we expect to conclude in Q1 2018," a spokeswoman said.

Nestle's Chief Executive Mark Schneider said in September that about 10 percent of the group's sales would change in the mid-term as a result of buying and selling assets.

The company has been trying to make itself into a "nutrition, health and wellness" business by reducing sugar, fat and salt in its products and moving into health-related businesses. Earlier this month, it announced a deal to buy Canadian vitamin maker Atrium Innovations.

Nestle has stressed that its decision to sell the U.S. confectionery business is more about its weak competitive position rather than chocolate being unhealthy.

"Overall, confectionery category remains very attractive for the company," Marco Settembri, Nestle’s head of Europe, Middle East and North Africa, said in September.

According to Nestle, it has has developed a new technology with the potential to reduce sugar in some products without affecting the taste and will begin to use it next year.

Nestle will continue to invest and grow in the United States, where it has leadership positions across a large number of categories such as petcare, bottled water, frozen meals, infant food and ice cream, as CSNews Online previously reported.