Nestle to boost healthy food products in Brazil, eyes partnerships

By Gabriela Mello

SAO PAULO (Reuters) - Nestle SA will increase its natural and organic products in Brazil, its No. 4 market worldwide, as part of a wider Americas plan to cut sugar, sodium and saturated fats in its food, a spokesman said.

The local subsidiary of Swiss-based Nestle has 25 initiatives in its pipeline for 2019, compared with 20 last year, with most geared toward natural and healthier products, its Brazil head of Marketing and Communications, Frank Pflaumer, told Reuters.

Like other packaged food makers, the producer of Nescau chocolate powder and Kitkat bars is aligning itself with a worldwide consumer shift toward healthier food.

Nestle Brazil allocated 400 million reais ($99.66 million) to innovation in the last five years, Pflaumer added. He declined to give estimates for capital expenditure in the coming years, but said investment levels were unlikely to fall.

Pflaumer said Nestle has cut over 14,000 metric tons of sugar, 5,000 tons of saturated fats and 300 metric tons of sodium from its manufacturing process in Brazil since 2014.

Last year, Nestle opened a new quality assurance lab and launched its first organic food line in Brazil.

"Producing organically is not the hardest part, the most challenging is producing organically on a large scale," Pflaumer said, adding that Nestle is about to enlarge its portfolio with four flavors of a new organic baby food later in May.

Partnerships with startups, including Colombian delivery firm Rappi, are also underway as the company looks for new ways to bring its products to consumers, he said.

Asked about potential acquisitions, Pflaumer said Nestle is monitoring all opportunities, while it remains focused on four priority business areas: coffee, pet care, children's nutrition and water.

"There is no fixed-budget for innovation ... Deals can happen," he added.

Outside of Brazil, Nestle has been actively acquiring other businesses. In 2018, the Swiss company bought a majority stake in Terrafertil, an Ecuadorian firm selling natural and organic plant-based foods, after a deals in the U.S. for Blue Bottle Coffee, Sweet Earth vegetarian foods, Chameleon Cold-Brew Coffee and ready meals group Freshly.

($1 = 4.0135 reais)

(Reporting by Gabriela Mello; Editing by Susan Thomas)