Established Dairy Portfolio Leaves Nestlé Better Poised To Grow Market Share

Swiss food giant Nestlé plans to invest around CNY2.5bn (US$395.0mn), with a local Chinese government and investors to increase dairy output and improve the quality of its dairy products in China over the next five years. This investment chimes with our view that China could potentially see a greater influx of foreign dairy brands in the near term amid heightened consumer sensitivity over product quality of domestically produced consumer goods. With its well-established portfolio of reputable dairy brands, we believe Nestlé is in a stronger position to take advantage of softened consumer confidence in domestic brands and grow its market share in China, and its investment clearly bears out its ambition in this regard.

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