The regional unit of Swiss food company Nestlé is selling its iconic Cremora brand to French group Lactalis. This is part of a “strategic realignment” affecting its divisions in South Africa and Zimbabwe.
The transaction means Nestlé’s plant in Harare will no longer produce the popular creamer. Nestlé Zimbabwe will however continue to make other products, such as Nestlé Everyday and Cerevita. The company commissioned its Cremora and milk powder plant at its Southerton factory in 2015, before adding another Cremora filling line in 2018.
“This strategic realignment will ensure the Harare facility remains an integral part of Nestlé’s efforts to drive future investments and sustainable development within Zimbabwe,” Nestlé says in a statement.
Nestlé says the sale is part of a strategy to remain competitive. Lactalis SA makes brands such as Parmalat, Melrose, Steri Stumpie and Bonnita, which are also widely distributed in Zimbabwe.
“This decision was reached after considering various factors and was not taken lightly. We believe that Cremora is in good hands with Lactalis SA, a leading food company known for its expertise and commitment to excellence,” says Nestlé’s Head of External Communications, Mota Mota.
He gave “assurances that job security, remuneration, and benefits will remain unaffected” in the affected businesses.
Nestlé is one of multiple multinationals that are shifting strategy in Africa, driven by rising local competition and shifting consumer demand for global brands. Nestlé, which also makes Nescafé and Ricoffy has been dropping brands targeted at lower-income groups and focusing more on the heigh-end market. In South Africa, Cremora has faced stiff competition from rivals such as Ellis Brown.
In Zimbabwe, Nestlé’s factory can produce 45 million litres of milk per year. Much of that capacity has not been used due to low raw milk production. This prompted the company to launch a project to support small-scale dairy producers to increase milk output. Under the Tamuka mu Zimbabwe Nespresso project, Nestlé is also a major buyer of Zimbabwean coffee.
