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Nestlé recently announced its purchase of Jenny Craig. Nestlé is well known for products such as NESQUIK, OH HENRY!, NESCAFÉ, Baby Ruth, Nestlé Toll House cookies and many other indulgent snacks. What they are not known for is health food products although they sell products such as Lean Cuisine, Lean Pockets and Powerbars. The purchase of Jenny Craig provides diversification of their current product strategy into the health food market. Cynically, it also allows Nestlé to serve a number of customers twice. Offering the indulgent products that help gain weight and also offering nutritional products to help them lose weight.
Nestlé is the world's largest food and beverage maker by sales (WSJ, 2006) and is looking to increase its sales in the nutritional food market. Jenny Craig offers a well know name with over $400M in sales annually (WSJ, 2006). It is a ready made solution to allow Nestlé to diversify their product portfolio through acquisition. It also capitalizes on the current North American trend to curb the obesity epidemic. The World Health Organization (WHO) defines 300 million adults worldwide as obese. WHO identifies some of the leading contributors to obesity as the following: "Increased consumption of more energy-dense, nutrient-poor foods with high levels of sugar and saturated fats, combined with reduced physical activity, have led to obesity rates that have risen three-fold or more since 1980 in some areas of North America, ?"
As a manager of Nestle Foods, it is imperative that recognition of the future trend away from junk food is acknowledged and planned for. The purchase of a nutritional food and diet plan prov ...