EUROPE – Nestlé Portugal will be investing up to €40 million (US$44.15 million) in two organic baby snacks production facilities in Portugal to expand its product range.
The company will be investing €11 million (US$12.14 million) in a new production line in Avanca facility, south of Porto and an additional investment in expanding the production capacity of its factory in Porto.
Scheduled for completion by the first quarter of 2020, the line will produce a new product range NaturNes Bio NutriPuffs, which will be exported to 35, reports ESM.
The new line has capacity to produce 80 packs per minute, equivalent to 130 kg per hour, with several ingredients, including tomato, carrot, onion, orange and raspberry sourced from national fruit and vegetable suppliers.
NutriPuffs will be available in four varieties, banana, raspberry, tomato and carrot flavoured cereal snacks, and are aimed at babies aged 8-10 months.
The investment in the European country will capitalise on the growing baby food market in the region, which is projected to reach €9.2bn (US$10.16bn) by 2024 registering a CAGR of 5.2% during the forecasted period 2019-2024.
The growth, according to a Business Intelligence report, is being driven by increasing demand for convenience, variety, and more nutritional baby food.
In addition, the growth of the middles class and the increasing number of working female population are also factors boosting the market.
Consumers are also becoming more conscious about the health of the baby, a factor that is steering growth in natural and organic baby food segment.
In Portugal, the organic baby food segment accounts for around 3% of the baby food market, of which Nestlé has 40% share ahead of other few top players including Danone and H.J. Heinz.
Nestlé Portugal is expecting 3% to 4% growth in 2019, with the business performing ahead of the market.
Last year’s the company’s turnover increased by 3.2% to €500 million (US$552m) however exports dropped by 37% to €53 million (US$58.5m), mainly due to the sale of a milk powder factory in the Azores.