Nestle has reportedly made an agreement regarding the sale of its China Yinlu peanut milk & canned rice porridge enterprises to Food Wise Co., Limited. The transaction includes all of Yinlu’s operations, comprising its five factories in Sichuan, Fujian, Hubei, and Shandong. The financial terms of the deal have not yet been disclosed.
In 2019, Yinlu brands accounted for sales of up to CHF 700 million, cite sources. The terms of the agreement state that Nestle will retain its RTD (ready-to-drink) Nescafe coffee business and proceed with the distribution of these products through most of the Greater China Region.
In addition, the company is making consistent investments for the further reinforcement of Nescafe across all channels given that the brand stands out as an essential strategic growth driver for Nestle. Further, the complete Nescafe business in China will be managed by one team via the utilization of synergies and strengthening of capacities that would help in progressing the growth of the business.
Controlled by the family of Yinlu’s Founder, Chen Qingshui, Food Wise Co., Limited is well-placed for enabling a smooth transition that could ensure the long-term success of the enterprise. The deal permits Nestle to focus on vital categories in China comprising dairy, infant nutrition, confectionery, coffee, culinary, and pet care, capitalizing on the organization’s innovation engine, strong brands, and digital capacities that would drive business expansion.
Sources with knowledge of the transaction further state that Yinlu will not only be consistent in manufacturing Nescafe RTD products for Nestle but will also proceed with the distribution of these products in numerous provinces. The brand will also advance the production and sale of Nestea products under license from Nestle. The company is completely committed to the Greater China Region, providing remarkable growth opportunities.
For the uninitiated, Nestle is a multinational food & beverage processing corporation founded in 1866. Based in Vevey, Switzerland, Nestle remains the largest food organization since 2014, on the basis of revenue and other metrics.
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