Nestlé fortifies Brazilian milk products to capture added-value trend

By Ben Bouckley

- Last updated on GMT

Related tags Milk

Nestlé is tapping growing demand within an 'under-penetrated' Brazilian dairy sector
Nestlé is tapping growing demand within an 'under-penetrated' Brazilian dairy sector
Nestlé has launched two new fortified milks in Brazil that it claims will help parents to increase the iron and vitamin content of children’s diets, as the firm rides regional interest in added-value dairy.

The Swiss food giant has ridden a dairy boom in recent years within the developing world, and posted double-digit growth within the sector in Brazil throughout 2010.

One City analyst, who wished to remain anonymous, told that Nestlé was benefitting from a dairy boom that was not specific to Brazil with Latin America.

He added that the category was “under-penetrated”​, and this fact, coupled with rising middle-class incomes and an increased interest in nutrition, underpinned the firm's growth.

Added-value dairy boom

Nestlé’s new ready-to-drink (RTD), dairy-based beverage lines are additions to its Ninho range.

The first is Ninho Fruit, which contains real fruit and is claimed by Nestlé to provide 32, 21 and 40 per cent respectively of children’s recommended daily intakes (RDAs) of vitamins A, C and D.

Ninho Fruit is also fortified with iron to provide children with 30 per cent of their RDA.

The second product, Ninho Baixa Lactose, is fortified with the same vitamins and iron, but is designed to cater for the 10 per cent of children in Brazil (according to Nestlé) who are lactose intolerant.

Brazilian Institute of Geography and Statistics (IBGE) figures in a report published this July showed that national consumption of low-fat milk (along with greens and fruits) increased in line with income from 2008-2009.

“The daily consumption of several items considered part of a healthy and balanced diet decreases as the per capita family income increases,”​ the report concluded.

Families with a per capita monthly income of R$296 (€122) ingested only 1.8g of low-fat milk a day, compared with 9.4g with those families earning R$ 1,089 (€450) the researchers found.

Insufficient calcium consumption

The IBGE also highlighted low calcium consumption (as well as high sodium consumption) across all age groups in Brazil, highlighting a clear opportunity for firms such as Nestlé within added-value dairy.

For instance, in the 10-13 age group, around 97 per cent of teenage boys and girls recorded ingestion levels below Brazil’s minimum RDA of 1,100mg.

The same trend was apparent with recommended Vitamin D consumption (10mcg), with around 99 per cent of teenagers across both sexes falling short in terms of actual intake.

Conversely, 77.7 per cent of girls and 81.5 per cent of boys within this age group exceeded the maximum daily limit for sodium intake (2,200mg).

These trends were repeated across other age groups, with widespread deficiencies in calcium, vitamin D and vitamin E also recorded for 14-18, 19-59 year-olds and over-60s at respective RDA levels. A high percentage within each group also exceeded sodium levels.

Nestlé announced in March that it was investing R$163m (€67.7m) in a 20,000m2 facility in the state of Rio de Janeiro.

The site will produce RTD milk products under the Ninho and Molico brands in Rio de Janeiro, with the site scheduled for completion at the end of 2011.

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