By Rupert Steiner
He’s the man behind KitKat, Nespresso and Haagen-Dazs, but despite manufacturing some of the world’s best-known products, Mark Schneider, chief executive of Nestlé, thinks the future lies with a brand unfamiliar to most – Incredible Burgers.
The plant-based meat substitute is being developed by Nestlé /zigman2/quotes/210131093/delayed NSRGY +1.70% /zigman2/quotes/208115528/delayed CH:NESN +1.37% the world’s largest food group, in response to fast changing consumer habits.
“The whole notion of giving consumers a choice when it comes to plant-based alternatives is going to be a key theme going forward,” Schneider told MarketWatch in an exclusive interview. “We’re talking about a pretty significant mega-trend.”
So out, it seems, goes Herta, Nestlé’s European meats business, though the official line is it has been placed under review, and in comes Incredible, the trendy new food creation. “It’s not only limited to plant-based burgers,” says Schneider. “We have plant-based chicken products, and we’re working on a whole lot of other formats, including even sausages and bacon.”
The German boss was parachuted in as chief executive of the Swiss-based conglomerate in 2017 after a period of weak financial performance which saw the business lose market share. Organic sales growth had also slowed from 4.6% in 2014 to 2.4% in 2017.
Nestlé, which also owns Purina pet food, Nescafe, and Perrier bottled spring water, had been too slow to react to the changing marketplace and the shares had significantly underperformed their European peers.
The shares rose 20.6% between the end of 2013 and the end of 2018, compared with a 23.2% increase in the benchmark S&P 500 stock index /zigman2/quotes/210599714/realtime SPX -0.27% . The lackluster performance attracted the attention of activist investor Third Point, which in 2017 took a $1.5 billion stake in Nestlé.
Schneider was in Vancouver, Canada to give a speech at the annual summit of the Consumer Goods Forum. The 53-year-old strode across a windowless meeting room and grabbed a bag of Nestlé products. Tall and focused, he took out an empty tub of Haagen-Dazs to showcase the reusable metal container.
“Starting from the beginning of 2018, quarter after quarter, we began to accelerate again,” he said. “What is amazing with millennials is for the first time in decades people are again spending a higher percentage of their disposable income on food and beverage.”
The future he says is in premium products, and their personalization.
“I think confectionery overall may be one in the future,” Schneider said. “Think about the proverbial box of chocolates, where you always find a few chocolates that are left, and imagine you buy a box of chocolates where there is a number of varieties in there, but all of them pretty much right up your alley.”