Nestlé is to sell a 60% stake of its German sausage maker Herta and create a joint venture with Spain’s Casa Tarradellas, in a move that illustrates its CEO’s aggressive deal-making and desire to focus on pursuing products of the moment, particularly in the plant-based space.
Nestlé CEO Mark Schneider has vowed to replace up to 10% of the Swiss food giant’s existing portfolio with products of the moment by the end of 2020. Schneider has overseen more than 50 transactions and reviews since he was appointed in 2017. In October, he indicated he would not stop at the 10% target, calling the portfolio review an 'ongoing process'.
Last month, when discussing Nestlé’s ‘triple play’ new plant-based bacon cheeseburger, he infamously told a US audience they should eat less meat, adding that plant-based foods were “coming out of the specialist corner" and into the mainstream.
Changing consumer demands
Nestlé put its Herta lunch meat business up for sale in February this year as part of a portfolio reshuffle. It said it wanted to focus more on plant-based products to keep pace with changing consumer demands. Nestlé offers a wide range of plant-based products, including through Garden Gourmet in Europe and Sweet Earth in the US.
The deal announced today (20 December) sees the disposal of a 60% stake in Herta to Spanish family-run business Casa Tarradellas. Nestlé and Casa Tarradellas will create a joint venture with their respective stakes. This will include Herta’s cold cuts and meat-based products, available in six European countries, and its dough business in France and Belgium.
Nestlé will retain and develop its existing Herta vegetarian business, in line with its increased focus on plant-based offerings.
According to Nestlé, the Herta meat and dough business had reported sales of EUR 667 million in 2018 and has been valued at EUR 690 million. The deal is expected to close in the first half of 2020.
Marco Settembri, Executive Vice President, Chief Executive Officer Zone Europe, Middle East and North Africa, Nestlé, said: "The Herta business has delivered strong performance over the past years and is well-positioned for future growth. We are happy to have Casa Tarradellas as our partner, a family-run business that is a market leader in Spain for pizza, fresh dough and charcuterie. Both companies have a true passion for quality and innovation and are proud to be in a joint venture to provide our consumers with great ingredients for their daily meals."
The joint venture will be incorporated in Spain. Operations will continue to be managed by the existing local Herta businesses in France, Germany, Belgium (also covering Luxembourg) and the United Kingdom (also covering Ireland).
This deal will ensure the continuity of production sites and the current structure of the business, including its employees, said Nestlé.