Nestle brands come under scanner

Following a lag in sales, Nestle is looking to let go of some of its brands which are beyond fixing.

CEO Paul Bulcke told investors that he has shortlisted several businesses that are beyond fixing and another shortlist of brands that needed fixing.

Bulcke (pictured) said: “We have allowed under performers to under perform for too long. That is not the case anymore. We will go after them. We want to be in business, not agony.”

Nestle Singapore, told Marketing the changes were "unlikely to affect Asia because the brands doing poorly do not have a presence in this region."

During its half yearly results, Nestle Asia, Oceania and Africa  saw 5.0% organic growth and 4.0% real internal growth. While some emerging markets experienced slower growth, China, Indonesia, Malaysia and much of Africa continued to grow well. There was also a pick-up in recent months in the South Asia and the Central West Africa regions and in the Middle East.

Kit Kat and Nescafé Dolce Gusto led the growth in developed markets, with good performances also from Nescafé Barista in Japan and Milo in Australia.

Struggling brands

Sources told Reuters that PowerBar energy bars were up for sale and earlier this year the company admitted that the performance of its weight loss brand Jenny Craig was below expectation.

Jenny Craig has struggled for growth outside North America since Nestlé acquired the business in 2006 and the brand was forced to exit the UK market shortly after its entry in 2010.

Bloomberg also added that the frozen food and bottled water categories have been identified to have the slowest growths. The frozen-food unit faces slow growth because of the growing perception among consumers that these meals are unhealthy compared to fresh food. Nestle even built a US$53 million research and development center to help with the category but has still faced slow growth.