Nestlé controls 19% of the world’s bottled water market, followed by The Coca-Cola Company with 9%, and posted total sales of about €6bn last year in 37 countries with water brands such as Vittel, San Pellegrino and Perrier.
But decreased consumption due to the economic crisis, rising fuel costs and environmental concerns have had a strong impact on the division. It posted a 2.5% drop in organic sales in the first quarter, while all other divisions at the Swiss group posted increases.
Harris, who heads the water division, said emerging markets have been the division’s growth drivers despite the economic crisis. “We will continue to look at drivers in emerging markets,” he said. “We’re still looking at acquisitions in some markets, and we’re looking to expand our market share organically in those markets, too.”
Nestlé acquired a source and bottling plant in Brazil late last year, and the head of Nestlé Brazil said in June that the company was negotiating at least another two purchases.
“We’ve identified Brazil as a key growth opportunity and are developing our business there,” Harris said.
The strategy for emerging markets may also include divestments, he added. In Russia, for example, Nestlé sold its Saint Spring bottling company in April. “We’ve divested that business in Russia and, yes, we’ve identified markets we’re going to focus on,” Harris said. “Our objective is to be number one or number two in every marketplace, and when it becomes clear that we can’t do that, we may divest.”
Source: Reuters
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