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Nestle explores possible sale of North American bottled water business MIBIZ COURTESY FILE PHOTO

Nestle explores possible sale of North American bottled water business

BY Sunday, June 14, 2020 08:21pm

International food and drink conglomerate Nestlé SA may be interested in selling a majority of its North American waters business, a portfolio that includes the Ice Mountain brand. 

Nestle’s Ice Mountain brand pumps water from a well near Evart and bottles at a Stanwood facility. The company employs about 280 people in Michigan.

Nestlé announced its new strategic direction on Thursday, which has the company focusing on high-end international brands like San Pellegrino and Perrier as well as functional (i.e. mineral, vitamin, caffeinated) water.

The company also announced that it would be focusing on its environmental conservation efforts, per a Wall Street Journal report. These measures would include limiting the use of virgin plastic while working to achieve carbon neutrality for its international water brands by 2022 and replenishing local watersheds.

The environmental effects of its operations has been a hot-button issue in West Michigan for a few years. Nestlé has been at odds with many Michigan residents and environmental groups since applying for a permit in 2018 that nearly doubled the amount of groundwater the company extracted from a well near Evart for the Ice Mountain brand, as MiBiz previously reported.

The Michigan Department of Environmental Quality granted the permit under then-governor Rick Snyder. A state administrative judge upheld the decision in April of this year after being challenged.

In addition to Ice Mountain, Nestlé also produces a wide range of other regional brands, including names like Poland Spring and Pure Life.

The pivot would allow Nestlé to focus on what it views as higher-growth, higher-margin products, despite the fact that selling North American operations would cut its bottled water sales ($3.6 billion in 2019) nearly in half.

Bloomberg reported potential suitors could include Coca-Cola Co. and PepsiCo Inc., which command 10 percent and 7.8 percent of the North American market respectively. Nestlé has a 20 percent share of the market.

"The creation of a more focused business enables us to more aggressively pursue emerging consumer trends, such as functional water, while doubling down on our sustainability agenda,” Nestlé CEO Mark Schneider said in a statement. “This strategy offers the best opportunity for long-term profitable growth in the category, while appealing to environmentally and health-conscious consumers.”

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