Food empire Nestle's CEO Paul Bulcke has expressed interest in attempting to crack the high-end chocolate market.
Speaking to investors at a trade show in Boston earlier this month, Bulcke admitted that the luxury chocolate business remained a source of frustration.
“Premium chocolate is my small intimate frustration,” he told those gathered at the conference.
Bulcke also spoke of Nestle’s waning interest in underperforming brands.
“It's going to be a long-term journey but we do have the quality in chocolate, we do have the knowledge, we do have the 'metier'. We just have to do it,” said Bulcke.
He admitted that Nestle’s decentralised set-up was part of the problem.
“Super-premium luxury chocolate brands should be monolithic worldwide, like Nespresso is.”
“That goes against the DNA of our organisation, so we're going to have to find ways to go around that,” he said.
While Nestle is currently selling high-end brands Cailler and Baci Perugina, its mainstream chocolate lines - e.g. Aero, Butterfinger, Crunch and Kit Kat - bring in the most revenue.
While the food manufacturer is well known for its mass-market chocolate brands, analysts are predicting that it may look to acquire chocolate brands in the premium sector - with emphasis on the US market.
Last autumn, Italian media reported that Nestle had made an offer for Ferrero, producer of Kinder chocolate.
The company is valued at more than €10 billion ($13.5 billion).
However, Ferrero denied the media reports.
There have also been repeated rumours of Nestle’s interest in Swiss chocolate producer Lindt & Spruengli and Italy's Ferrero over the years.
Nestle’s chocolate sales were valued at 7.5 billion Swiss francs ($8.39 billion) in 2013 – around 8% of overall sales.
Nestle's confectionery sector has grown at an average rate of 5.7% since 2007.
According to Euromonitor, the global confectionery market is valued around $196 billion in sales.
© 2014 - European Supermarket Magazine
