Nestlé may sell US confectionery arm

NESTLÉ is to “explore strategic options”, including a possible sale, of its US confectionery business.

The business includes brands such as Butterfinger, BabyRuth, Chunky, Crunch, Nerds and Runts, and accounts for around CHF 900m (US$923m) of sales each year. However, this is just 3% of Nestlé’s total US sales. The company is a leader in various US market segments including petcare, bottled water, frozen meals, infant food and ice cream, and it will continue to expand and invest in these areas.

The company told the Financial Times: “Rather than making the significant investment needed to be a leader in US confectionery, it is the right time to focus on other growth opportunities.”

Nestlé has 120 sites in the US, including 77 factories and 10 R&D centres, employing more than 51,000 people. The review of the business is expected to be completed by the end of the year. Its Toll House baking brand is a strategic growth brand and is not included in the review.

Analysts expect that the US confectionary business could be worth up to US$2bn if Nestlé does decide to sell it.

“Nestlé remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand KitKat. Nestlé’s global confectionery sales amounted to CHF 8.8 billion in 2016,” the company said in a statement.