Nestlé commits US$550M to expand Brazilian confectionary operations

BRAZIL – Nestlé, the global food and beverage conglomerate, has revealed plans to invest a staggering US$550 million into expanding its chocolate and confectionery production operations within Brazil.

This landmark investment is triple the amount invested in the last four years in Brazil, according to Nestlé, and marks a strategic step to tapping into the growing demand for high-quality new confectionary products in the Brazilian market.

The Swiss giant will mainly put the investment towards expanding and modernizing production lines at factories in Caçapava and Marília in São Paulo, as well as in Vila Velha in Espírito Santo.

In Caçapava, Nestlé produces the KitKat brand, while in Vila Velha, production is focused on the Garoto brand of chocolates. The Marília unit manufactures biscuits. These facilities employ more than 4,000 people and are export hubs for over 20 countries.

In February 2022, Nestlé revealed that it was increasing its investment in the South American country to more than 1.8bn reais for that year, investing in areas including production, distribution, and technology.

The group has also planned to expand the Nestlé Cocoa Plan sourcing programme, which has been in operation in Brazil since 2010. The scheme encourages regenerative agriculture practices in the cocoa supply chain, Nestlé said.

Patricio Torres, vice president of biscuits and chocolates for Nestlé’s Brazilian arm, said: “Nestlé’s Brazilian operation has been growing consistently and sustainably over the years. In the last 12 months alone, we have seen an increase of 24%, based on the high demand in Brazil for the chocolate and biscuit portfolio.”

Overall, the company employs more than 30,000 people in Brazil and has 20 industrial units and nine distribution centers.

The Swiss Group posted organic sales growth of 8.7% for the first half of 2023, driven by the food giant’s raised prices to cope with higher input costs.

Zone Latin America, where Brazil belongs, delivered an 11.6% revenue growth. Brazil posted “double-digit growth” for the period.

Nestlé said: “By product category, confectionery was the largest growth contributor, reflecting strong demand for KitKat and key local brands as well as new product launches.”

In March, the company launched a new KitKat cereal in March, and in May unveiled a new limited-edition churro-flavored KitKat.

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