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Canada Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 20, 2008 - 37 Pages Table of Contents
AbstractNestle’s sale of its Canadian canned milk business to the Canadian arm of US food group J.M. Smucker inOctober 2007 illustrates a wider shift in consumer preferences in mature food and drink markets. Thecompany sold the rights to the Carnation canned and powdered milk brand, as well as the manufacturing sitein Quebec. The Carnation business achieved sales of around US$50mn in 2006.According to Bob Leonidas, CEO and president of Nestle Canada, ‘after careful consideration, NestleCanada has decided to exit the canned and powdered milk business as it is no longer a strategic focus for ourCanadian operation.’ Nestle looks to position its global business more towards health and nutrition, twostrongly growing sectors in many countries across the globe. In France, Nestle sold three factories, including one powdered milk plant, as part of an ongoing strategy ofmoving away from ‘traditional products’ and into more profitable sectors linked to nutrition and health inNovember 2006. Similar initiatives are being undertaken by other multinationals active in the dairy sector,with a shift towards healthy and functional product variants as well as stronger market segmentation, withmany of the newly launched products targeted at specific consumer groups with particular health andnutritional needs. Product sectors that have seen strong growth include dairy-based drinks, low fat products, products withadded calcium and vitamins, and products containing plant sterols which are believed to lower cholesterollevels and thus reduce the risk of heart disease. Soy milk is another successful product sector - for manyyears only of appeal to a niche customer group of health shop customers, products are today firmlyestablished in MGRs shelves and demand continues to rise. Soy is considered to have the potential to reducethe risk of prostate cancer, breast cancer, heart disease, osteoporosis and Alzheimer’s disease, and to relievethe symptoms of the menopause. Children’s dairy products have been another key focus of manufacturers’ efforts, with sales benefiting fromthe increasing health-consciousness of parents. The sector is of particular interest in developed markets suchas Canada, where falling birth rates reduce the number of child consumers, making it essential to add value toproducts in order to drive sales to a smaller target group. In contrast to Nestle, J.M. Smucker’s chairman and CEO, Tim Smucker, described the Carnation brand as an‘excellent fit’, with the companies portfolio already containing fruit spreads, peanut butter, shortening andoils, flour, ice cream toppings, and sweetened condensed milk sold under brand names including RobinHood, Crisco, Smucker’s, Jif, Pillsbury, Eagle Brand, R.W. Knudsen Family, Hungry Jack, White Lily, FiveRoses, Bick’s, and Martha White. Get Full Details About This Report >> |
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