Friday, January 20, 2017

Nestlé and Unilever have different strategies for Brazil

Multinational companies Nestlé and Unilever adopt different strategies to expand its business in Brazil and in Latin America in 2017. In the midst of a consumer still hesitant pace in the region, the first foresees inflation of inputs and one-off increases their prices; the second bet in more volume.
In an interview with Value, the President of Unilever, Paul Polman, said that in 2016 much of business growth in Latin America was due to the increase of prices for inflation, as in Argentina and in Venezuela. "But it''s not going to have that in the future, because inflation is falling," '' said the Executive on the sidelines of the World Economic Forum, where it''s always one of the major speakers. "We''re going to see less chance of price and more volume".
Second Polman, that''s not even the companies '' decision. "Is that consumer in Brazil instead of buying an ice cream for ten real went on to buy a cheaper one of seven real", exemplified. Unilever owns brands such as the ice cream Kibon, Omo washing powder, Dove and hygiene line Hellmann''s mayonnaise. In Brazil, "tried to give more attractive products in a difficult economic period" and the business works, says the CEO of Unilever.
Nestlé Nestlé prices eye has a different strategy. Nestlé ''s Executive Vice President for the Americas, Laurent Freixe, points out that the inflation of some raw materials such as coffee, sugar, milk; and the energy prices have an impact on packaging and transport. Inflation in Latin America is also impacted by the devaluation of their currencies against the dollar, said the Executive.
"So, we have some specific price increases, but in a limited way in 2017 to limit the impact on the consumer," said to the value. Travel to Brazil soon Freixe to inaugurate the new production line of "pet food" (animal feed) in Ribeirão Preto (SP). Nestlé also provides for investing more in Montes Claros (MG) in the second stage of the Nescafe Dolce Gusto. Last year the investment planned for Brazil, its fourth-largest market in the world, was 400 million R$.
"Latin America is going to (have) a little better in 2017, because Brazil has some signs of recovery," noted the Vice President of Nestlé. "The recovery is long, it takes time, but the direction is good."
Unilever optimistic with emerging countries
In General, the CEO of Unilever envisages a scenario in which the emerging world, as a whole, get out of the economic downturn, based on projections from the IMF (International Monetary Fund) and the World Bank that growth will increase little by little.
Unilever maintains the goal arrived within three years with about 70% of the turnover coming from the emerging markets. Are in 62% currently, because of acquisitions made in Europe and the United States, and the exchange rate.
In the U.S., now with the Government of Donald Trump from this Friday (20/1), Nestlé sees a "good momentum" for the business. The company expects the 2017 scenario will be of a moderate increase in consumption in the largest economy in the world.
Polman says that Unilever will continue producing in the US and that''s not up to pressures that might come from the White House. The Executive commented that if the company react to pressure, each time that the policy change, there would be panic among shareholders and the company could be thrown out of business.
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