Nestlé to divest Yinlu businesses to Food Wise in China

Swiss food giant Nestlé has agreed to divest its Yinlu peanut milk and canned rice porridge businesses in China to Food Wise Co for an undisclosed sum.

Food Wise is controlled by the family of Yinlu founder Chen Qingshui.

As part of the deal, Food Wise Co will acquire Yinlu’s five factories in Fujian, Anhui, Hubei, Shandong and Sichuan.

Last year, Yinlu brands had sales of Sfr700m ($766m).

By divesting the Yinlu peanut milk and canned rice porridge business, the Swiss firm intends to focus on its infant nutrition, confectionery, coffee, culinary, dairy and pet care categories in China.

Nestlé has not included its ready-to-drink (RTD) Nescafé coffee business in the deal.

Yinlu will be manufacturing Nestlé’s RTD products for the Swiss company and also distribute the products across several provinces in China.

Nestlé said that it will continue to invest in Nescafé to further strengthen the brand’s presence across all channels in the market.

Yinlu has also agreed to produce and sell Nestea products under licence from Nestlé.

Over the last five years, Nestlé is said to have invested nearly Sfr800m ($877m) in the Greater China Region.

The deal is expected to close by the end of this year.

Earlier this month, Nestlé USA acquired New York-based prepared meals supplier Freshly in a $950m deal.

Established in 2015, Freshly offers fresh, chef-cooked meals to customers across the US.

It currently distributes more than one million meals in a week to its customers across 48 US states.