Nestlé bets big on China to accelerate innovation, says GlobalData

Following the recent news that food and beverage giant Nestlé has inaugurated a new research and development (R&D) center in Beijing and a System Technology hub in Shenzhen as part of a plan to accelerate its trend-based innovation in China,

Shagun Sachdeva, Consumer Insights Analyst at GlobalData, offers her view:

“Nestlé has been looking for opportunities to accelerate the intensity of its trend-based innovation in China to take advantage of emerging trends in Asian food and beverage markets. The company reported a 2.1% year-on-year organic growth in sales in 2018, supported by strong momentum in the US and China, the company’s two largest markets. Especially, China saw improved growth backed by innovations in infant nutrition, coffee and culinary. Having recognized China as a global innovation leader and as one of the fastest-growing food and beverage markets in the world, Nestlé intends to develop new products not only for Chinese consumers but also for consumers across Asia.

“The move to open a new R&D site, which includes prototyping and packaging labs as well as a consumer insight area, is as an effort to strengthen its operational processes by collaborating with local universities and innovation partners to create new products aligned with the latest emerging trends. The new facility will house 40 specialists across multiple product categories with expertise in sensory sciences, food technology and nutrition. The choice of location of R&D centers will be an added advantage for the company as the proximity of the R&D team to the Nestlé China headquarters and of the System Technology Hub to the suppliers and manufacturers will allow it to quickly produce innovative beverage products, and new system technologies and components.”

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