RSS Feed

Nestle plans to sweeten its UK market share

Posted by Flora Sawita

YORK, England, May 14 (Reuters) - Nestle SA, the world’s biggest food group, plans to grow its market share in the 4.5 billion pound (US$6.6 billion) UK confectionery market each year despite rivals getting bigger and more competitive.

The KitKat and Aero bar maker aims to gain share although it faces a new Kraft and Cadbury combination, and hopes to safeguard 2,000 UK jobs as the industry comes under intense pressure as its key raw material, cocoa, hits 32-year highs.

Nestle’s head of UK and Ireland confectionery David Rennie plans to grow his share up to 0.2 percentage points a year from 16 per cent although its rivals Kraft and privately owned Mars have made acquisitions to heap the pressure on the Swiss group.

“We aim to grow the business with steady market share growth of 10 to 20 basis points each year,” Rennie told Reuters in an interview on Friday at its York plant in northern England that churns out one million KitKat bars a day.

Kraft took the lead in the UK market when it swallowed Cadbury earlier this year, boosting its relatively small 2 to 3 per cent share to around 30 per cent, while Mars after chewing up Wrigley in 2008 pushed its market share to 24 per cent.

“The two moves have concentrated the players, but not concentrated the brands. Consumers still have a similar number of brands to choose from,” Rennie said.

The strengthening of its two bigger rivals with more marketing muscle and distribution reach along with soaring cocoa prices have put a microscope on costs, but Rennie does not see big job cuts like those made in 2006 to remain competitive.

“Cocoa prices are very high and the market is very competitive but I am not looking to cut jobs to allow myself to compete,” he said. Cocoa prices doubling over the last three years to around 2,400 pounds a tonne have put massive pressure on the business with modest price rises unable to absorb the cost increase.

The commodity has been pushed higher by tight supplies from major growing nations like the Ivory Coast, an anticipated upturn in demand as the world comes out of recession, and speculative buying. “Cocoa is at a historic high level and the indications are that it will stay high for a while, with no big decline anticipated in the next 6 to 12 months,” Rennie said. “There is massive pressure on the business and had we not done massive restructuring 3 to 4 years ago it would have been very tough,” he added.

Nestle went through big restructuring since acquiring Rowntree in 1988. Four years ago, it cut a third of the staff in York and now employs about 2,000 confectionery staff across York and three other sites.

Rennie’s focus is on his “magnificent seven” brands — KitKat, Aero, Smarties, Milky Bar, Quality Street, After Eight and Rowntree’s — which account for 70 per cent of his sales, largely produced from Nestle’s four northern English plants.

With UK industry volumes largely flat in recent years, manufacturers have relied on price rises to drive the annual market in the UK by 2 to 3 per cent.

Rennie is looking to KitKat, his fastest-growing brand with high-single digit percent annual growth, and new innovations to drive that growth. Rennie has helped create a multi-million pound brand in 9 months with Randoms, fruit-flavour shapes that are made in a Nestle Czech factory.

Randoms are now Britain’s No. 2 sugar confectionery brand after Nestle’s own Fruit Pastilles, outselling Mars’s Starbursts and Kraft/Cadbury’s Maynards wine gums.

Confectionery is a core Nestle business that makes up 11 per cent of sales, and one in which it ranks No. 3 in the world after Kraft and Mars. The business contains two of its 30 billionaire brands — KitKat and Nestle chocolate — with annual sales of over 1 billion Swiss francs. --- Reporting by David Jones; Editing by Mark Potter and Quentin Webb

0 comments:

Posting Komentar

Label

2011 News Africa AGRIBISNIS Agriculture Business Agriculture Land APINDO Argentina Australia Bangladesh benih bermutu benih kakao benih kelapa benih palsu benih sawit benih sawit unggul Berita Berita Detikcom Berita Info Jambi Berita Kompas Berita Padang Ekspres Berita Riau Pos Berita riau terkini Berita Riau Today Berita Tempo bibit sawit unggul Biodiesel biofuel biogas budidaya sawit Bursa Malaysia Cattle and Livestock China Cocoa Company Profile Corn corporation Cotton CPO Tender Summary Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) Dairy Dairy Products Edible Oil Euorope European Union (EU) FDA and USDA Fertilizer Flood Food Inflation Food Security Fruit Futures Futures Cocoa and Coffee Futures Edible Oil Futures Soybeans Futures Wheat Grain HUKUM India Indonesia Info Sawit Investasi Invitation Jarak pagar Kakao Kapas Karet Kebun Sawit BUMN Kebun Sawit Swasta Kelapa sawit Kopi Law Lowongan Kerja Malaysia Meat MPOB News Nilam Oil Palm Oil Palm - Elaeis guineensis Pakistan palm oil Palm Oil News Panduan Pabrik Kelapa Sawit pembelian benih sawit Penawaran menarik PENGUPAHAN perburuhan PERDA pertanian Pesticide and Herbicide Poultry REGULASI Rice RSPO SAWIT Serba-serbi South America soybean Tebu Technical Comment (CBOT Soyoil) Technical Comment (DJI) Technical Comment (FCPO) Technical Comment (FKLI) Technical Comment (KLSE) Technical Comment (NYMEX Crude) Technical Comment (SSE) Technical Comment (USD/MYR) Teknik Kimia Thailand Trader's Event Trader's highlight Ukraine umum USA Usaha benih varietas unggul Vietnam Wheat