Nestlé to enter partnership with Chinese food company Yinlu

Posted by Nicole Eckersley on 19th April 2011

Nestlé today announced that it had signed a partnership agreement taking a 60% stake in the Chinese food company Yinlu Foods Group (Yinlu), subject to regulatory approval in China. Other details of the transaction, including the acquisition price, are undisclosed.

Family-owned Yinlu is a well established household brand in China and a significant marketer for ready-to-drink peanut milk and ready-to-eat canned rice porridge.

Nestlé said the agreement builds on an already successful partnership between the two companies, with Yinlu a co-manufacturer for ready-to-drink Nescafé coffee in China. Yinlu’s 2010 sales amounted to around CHF 750 million.

Nestlé said that Yinlu’s products are tailored to Chinese consumers’ taste and habits, and complement their existing product portfolio in China, which includes culinary products, coffee, confectionery, bottled water, milk powder and products for the foodservice industry.

The company said that Yinlu’s “healthy and nutritious”products perfectly fit into its global portfolio, and emphasise its core strategy as the world’s leading nutrition, health and wellness company.

Nestlé CEO Paul Bulcke: “We will submit this partnership proposal to the Chinese authorities shortly. It demonstrates our long-term investment in China and our commitment to further developing local brands. We are proud to build this partnership to bring healthy, affordable and tasty products to our consumers in China by combining Yinlu’s entrepreneurship, product expertise and consumer understanding with Nestlé’s innovation and renovation capabilities.”

Yinlu Chairman Chen Qingyuan: “This partnership represents a very important landmark in Yinlu’s long-standing aspiration to be a relevant and favourite brand for consumers.  Nestlé’s proven expertise will undoubtedly provide solid support for Yinlu’s continued growth.  Together we will continue to develop our brand and manufacturing capabilities, in particular in the Central and Western part of China.”

Yinlu’s Chairman, Mr. Chen Qingyuan, will continue to lead the company in the new partnership.