Nestle SA, the world’s largest food company, said it’s setting up a unit to develop personalized nutrition products to treat or prevent diabetes, obesity, cardiovascular disease and Alzheimer’s.
Luis Cantarell, who leads Nestle’s business in the Americas, will be chief executive officer of Nestle Health Science SA, the Vevey, Switzerland-based maker of Nescafe coffee said today in a statement.
The manufacturer can use cash from a sale last month to fund fund research and takeovers to become a leader in foods targeted at health needs, surpassing Groupe Danone SA, said Jean-Marie L’Home, an analyst at Aurel in Paris. Nestle received $28.3 billion from Novartis AG last month for a majority stake in the Alcon eye-care division.
“Nestle’s cash and know-how really make it a powerful machine,” he said. “Nestle will probably be the leader in this category within the next few years.”
The manufacturer is establishing the new division as regulators increase scrutiny of the food industry’s health- benefits promotion. Danone, whose medical-nutrition unit had sales of 925 million euros ($1.2 billion) in 2009, withdrew applications with the European Food Safety Authority for its Actimel yogurt drinks’ health claims in April, saying it wants clarity on rules.
Backing New Institute
The new unit will include Nestle’s existing health-care nutrition business, which had sales of 1.6 billion Swiss francs ($1.6 billion) last year, the manufacturer said. The company is also creating the Nestle Institute of Health Sciences, an organization to be based at research partner Ecole Polytechnique Federale de Lausanne.
The Swiss company formed a research alliance with the EPFL in 2006. The company donates 5 million francs a year to help the Lausanne-based university study ways to improve children’s cognitive development and prevent brain degeneration in the elderly, and learn more about links between gastrointestinal functions and the brain.
Nestle rose as much as 0.6 percent to 53 francs as of 10:07 a.m. in Zurich trading. The stock has gained 5.6 percent this year, valuing the company at 183.6 billion francs.
Emmanuel Baetge, former chief scientific officer of ViaCyte, a San Diego, California-based company that’s developing diabetes treatments from stem cells, will lead the research institute, the Swiss company said. The manufacturers said it will invest hundreds of millions of francs over the next decade in the project.
Nutrition Businesses
Nestle also said Nandu Nandkishore, who became temporary head of its nutrition unit when Richard Laube resigned last month, will continue in that role. The division will consist of infant nutrition, the Jenny Craig weight-loss service and products for athletes after the health-nutrition business is shifted into Nestle Health Science.
Nestle Health Science will become operational on Jan. 1. Chris Johnson, head of Nestle in Japan, will succeed Cantarell in Nestle’s Americas post on that date.
Johnson joined Carnation as a trainee in 1983, two years before Nestle bought the maker of condensed milk. He also worked in Nestle’s U.S. pet-care and bottled water divisions and has been head of Nestle for Taiwan.
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