Nestle Intends to Offload its French Subsidiary Davigel

Nestle Intends to Offload its French Subsidiary Davigel

The Swiss group announced on Friday, November 14, its decision to sell the company that specializes in the production of frozen food for catering and community activity.

Davigel, headquartered in Dieppe (Seine-Maritime), France, employs 3100 workers. The company posted a turnover of 700 million euros in 2013, after 783 million the year before. The company had entered the fold of Nestlé in 1989 when it bought Buitoni.

This transfer occurs after shedding other operations. The global leader in food, like other giants like Unilever and Procter & Gamble, launched a strategy of business grooming. One year ago, almost to the day, Nestle shook off the brand Jenny Craig. Then, the brands Musashi Sports Nutrition Powerbar and Juicy Juice drinks were also sold.

In France, Nestlé has already sold its regional mineral water brand Plancoët Carola. It also restructured its operations last year by stopping the production of frozen meals of the Maggi brand at its plant in Beauvais, focused on producing ice.

The scandal of horse meat substituted for the beef had caused sales plunge of lasagna and other dishes prepared by Maggi, which had contributed to the decision. Traces of horse meat were discovered in lasagna cooked in Beauvais for Davigel.

These operations correspond to the line set by Paul Bulcke, CEO of Nestlé, in October 2013. He had not hidden that the activities whose performances were not satisfactory do not belong in the group. But Davigel sees its revenue decline and the catering sector remains worthwhile, affected by sluggish growth.

In parallel, the Swiss group wants to integrate into high-growth markets. It thus brings the skin care in its new perimeter with the acquisition of 100% of the capital of Galderma and marketing rights to dermatology care cosmetic in North America. Nestlé did not reach its growth target in 2013, committed to a growth in turnover of almost 5% in 2014.

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