Switzerland’s Nestlé agrees to sell insurance unit for $1.55 billion

Nestle said Monday that it had agreed to sell its Gerber Life Insurance unit for $1.55 billion (€1.3 billion), in the company's latest bid to redouble its focus on food and beverage.

Switzerland's Nestlé agrees to sell insurance unit for $1.55 billion
A file image of Nestlé CEO Ulf Mark Schneider. Photo: AFP

The Switzerland-based food giant said the deal with Western & Southern Financial Group does not affect the iconic Gerber baby food unit, which Nestlé will continue to control. 

“This move is part of the ongoing evolution of our portfolio. It will allow us to invest further in our core food and beverage business and in consumer healthcare,” Nestlé's chief executive Mark Schneider said in a statement. 

Nestlé has made a series of moves in recent months to more tightly focus its operations, with health food products and coffee emerging as key priorities.

The company announced in February that it was exploring options to sale the Gerber insurance business. 

Nestlé said it expects the deal to close later this year, or early in 2019.

Read also: Switzerland's Nestlé seals deal to market Starbucks coffee


‘Unlimited resources’: Switzerland’s Nestle goes vegan

Swiss food giant Nestle, which has made billions with dairy products, said Monday it will host start-ups that want to develop vegetarian alternatives.

'Unlimited resources': Switzerland's Nestle goes vegan

Nestle could thus find itself at the forefront of a sector that has strong growth potential, an analyst commented.

It plans to open its research and development (R&D) centre in Konolfingen, Switzerland to “start-ups, students and scientists” a statement said.

In addition to testing sustainable dairy products, the group plans to encourage work on plant-based dairy alternatives, it added.

Chief executive Mark Schneider was quoted as saying that “innovation in milk products and plant-based dairy alternatives is core to Nestle's portfolio strategy.”

The group unveiled a vegetable-based milk that had already been developed with the process, and technical director Stefan Palzer told AFP it planned to focus on 100-200 such projects a year.

Jon Cox, an analyst at Kepler Cheuvreux, noted that while Nestle had missed some consumer trends in the past, it has now “taken something of a lead in the plant-based alternative market for food”.

And “given its pretty much unlimited resources, Nestle is going to come out one of the winners in the space,” Cox forecast in an e-mail.

Nestle said that “internal, external and mixed teams” would work at the R&D centre over six-month periods.

Nestle would provide “expertise and key equipment such as small to medium-scale production equipment to facilitate the rapid upscaling of products for a test launch in a retail environment,” it added.

The Swiss food giant has long been known for its dairy products, but faced a boycott in the 1970s for allegedly discouraging mothers in developing countries from breastfeeding even though it was cheaper and more nutritious than powdered formula.

On Monday, the group's statement also underscored that the research initiative was part of its commitment to help fight global warming.

“As a company, we have set ambitious climate goals. This is part of our promise to develop products that are good for you and good for the planet,” it said.