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Swiss Company Strengthens Bet on the Brazilian Market, Which Is the Third Largest in the World, with a Focus on Production Expansion and New Business Models Such as Franchises.
Nestlé announced a new and robust cycle of investment in Brazil. The company will allocate R$ 7 billion to the country between 2025 and 2028. The amount represents an increase compared to the previous cycle, which totaled R$ 6.3 billion. This decision reinforces the strategic importance of the Brazilian market, the third largest for Nestlé in the world.
A New Investment Cycle for Nestlé’s Third Largest Market
Brazil is consolidating itself as a fundamental piece for Nestlé. The country is the third largest global market for the company, surpassed only by the United States and China. Last year, revenue here reached about 4 billion Swiss francs, approximately US$ 5 billion.
According to the CEO of Nestlé in Brazil, Marcelo Melchior, the previous investment cycle was successful. “Almost all businesses had a return on investments according to the initial plan,” he stated.
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He explains that the new phase of investments will be more diversified. The resources will be allocated to areas such as information technology, product development, and new production lines.
From Animal Feed to Chocolates
One of the highlights of the previous plan was the construction of the second pet food factory of the group. Located in Vargeão (SC), the unit received R$ 2.5 billion and has a scheduled inauguration for August.
The factory will serve as an export platform for Latin America, the United States, and Europe. Its strategic location allows the use of fresh raw materials, optimizing logistics costs.
Now, the new investments will continue to expand production capacity. The Vila Velha (ES) factory will be enlarged with new lines of chocolates, bonbons, and “chocobiscuits.”
The Untapped Potential of Franchises
A crucial part of the new investment is venturing into uncharted territory for the group: the franchise model, driven by the acquisition of CRM, the parent company of Kopenhagen. Marcelo Melchior states that the company is learning from the network of 520 franchisees:
“It’s a ‘know how’ very different from ours.” The potential of this model is seen as a “new avenue for growth” where “the sky is the limit,” according to the executive. He mentioned Nespresso as a brand that could eventually adopt the system, which is well established and mature in Brazil.
Strategic Investments in Coffee, Infant Formulas, and Technology
The new cycle of investment in Brazil already has defined destinations. Over R$ 500 million will be allocated to coffee businesses by 2028. Plans include the expansion of the Dolce Gusto capsule factory in Montes Claros (MG) and a new soluble coffee extraction line in Araras (SP).
The company will also expand the beverage machine park of Nestlé Professional. The goal is to reach 30,000 machines by the end of 2025. Additionally, the factory in Ituiutaba (MG) will receive new investments for the production of infant formulas.
“Our focus is on strengthening the ‘core,’ on ‘premiumization’ of categories, and on accelerating brands with high potential,” concluded Melchior.
With information from CNN Brazil.
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