Vevey / CH. (nsa) Swiss Nestle S.A. announced that it has agreed to sell its Yinlu peanut milk and canned rice porridge businesses in China to Food Wise Co., Limited. The deal covers all of Yinlu’s operations, including its five factories in Fujian, Anhui, Hubei, Shandong and Sichuan. Yinlu brands had sales of CHF 700 million in 2019.
Food Wise Co., Limited, a company controlled by the family of Yinlu founder Chen Qingshui, is well-positioned to enable a smooth transition and ensure the long-term success of that business.
The transaction allows Nestle to focus on key categories in China: infant nutrition, confectionery, coffee, culinary, dairy and petcare, capitalizing on the company’s strong brands, digital capabilities and innovation engine to drive growth.
As part of the transaction, Nestle will retain its ready-to-drink (RTD) Nescafe coffee business and distribute the products across most of the Greater China Region. Nescafe is a strategic growth driver for Nestle, and the company continues to invest to further strengthen the brand across all channels in the market. The entire Nescafe business in China will be managed by one team, using synergies and strengthening capabilities that will help drive further growth in the business.
Yinlu will continue to manufacture the Nescafe RTD products for Nestle and will distribute the products in several provinces. Yinlu will continue to manufacture and sell Nestea products under license from Nestle.
Nestle is fully committed to the Greater China Region, which offers significant growth opportunities. The Greater China Region is the second largest Nestle market globally with sales of nearly CHF 7 billion in 2019. Nestle has invested about CHF 800 million there during the last five years. The transaction is expected to close by the end of this year.