Nestlé acquires remaining stake in confectionery manufacturer Hsu Fu Chi
CHINA – Nestlé Greater China, operating in the country for nearly 40 years with 23 factories and 5 product innovation centers, has announced its agreement with the Xu family to acquire the remaining 40% stake in Xu Fuji, China’s leading confectionery manufacturer and marketer.
Nestlé had previously bought Hsu Fu Chi in 2011, acquiring 60% of its shares providing technical and market support to the Xu Fuji brand series, including formulation, research and development, quality control, etc.
Xiqiang Zhang, CEO of Nestlé Greater China, said, “This move combines Hsu Fu Chi’s operational efficiency and entrepreneurial spirit with our proven innovation capabilities, accelerating the growth of the Hsu Fu Chi brand and further strengthening Nestlé’s market presence in China.
“It also demonstrates our long-term commitment to the Chinese market and will enhance our ability to develop international and local brands in this dynamic market.”
Nestle stated that Xu Fuji gradually transformed into a “national classic snack brand” and penetrated daily consumption scenarios since the first acquisition.
Xu Fuji has launched many healthy, new products and expanded from a product portfolio dominated by shachima and candy to multiple categories, such as jelly, pastries, Kit Kat chocolate, and the recently successfully launched Milo Sports biscuits.
Through this transaction, Xu Fuji will have broader and more convenient access to Nestlé’s global brand and product resources, enabling it to achieve its growth goals.
The acquisition comes shortly after successful year in its operation in Asia. In China, a positive RIG in each quarter was achieved, laying a solid foundation for growth.
This performance was driven by faster innovation in key categories and adjustments to deep distribution and channel strategies to capture new growth opportunities.
Organic growth was 2.1%, with RIG of 4.3% and pricing of -2.1 %. Reported sales fell 1.3% to 5.0 billion Swiss francs (US$5.59 billion), with exchange rates reducing sales by 3.5%.
The infant nutrition and confectionery businesses gained market share, while the seasoning and dairy products businesses lost it.
The underlying trading operating profit margin fell 40 basis points to 16.1%, reflecting higher input costs and more investment in advertising and marketing.
Regarding the 2025 outlook, CEO Franz Fuhrer said, “We have a clear roadmap to boost performance and transform for the future. Investing more to drive growth is at the heart of our plan. We plan to fund these growth investments by achieving annual savings of CHF 2.5 billion (US$2.80 billion) through our new three-year cost savings program.”
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