Nestlé CEO says feeding ageing populations a priority as birth rates fall

The chief executive of Nestlé said feeding ageing populations had become a major priority as the world’s largest food company and infant formula pioneer reckons with dwindling birth rates around the globe. 

“You’re seeing there is a longer term secular trend towards globally lower birth rates,” said Mark Schneider. “The 50+ age group in most countries around the world is going to increase significantly over the next 10 to 20 years. With that, and with the specific nutritional needs of that age group, there is an opportunity for us.”

Schneider said the company was focused on developing products that directly address the concerns of ageing populations, including maintaining a target weight, preserving muscle mass, avoiding micronutrient deficiencies and controlling blood sugar levels.

The former chief executive of healthcare group Fresenius has already invested heavily in specialised nutrition — fortified drinks, protein powders, vitamins and supplements — and led the company’s first foray into drugs with peanut allergy treatment Palforzia, which it sold last year after doctors failed to take it up. 

Over the past 15 years food giants such as Nestlé, Danone and Mars have diversified away from just groceries into higher-growth sectors like specialised nutrition, petcare and coffee.

The category, which also includes infant formula, made up 15 per cent of Nestlé’s profits last year, compared with 50 per cent at French competitor Danone. Nestlé’s portfolio is weighted more towards adult and medical nutrition at 30 per cent compared with Danone’s 20 per cent.

“We’re not walking away from what we got started on, which is infant nutrition,” added Schneider, who in 2016 became the first ever outsider to be appointed to the helm of the Swiss multinational. “But we do see that in most economies around the world, the bigger demographic opportunity is among the middle aged and elderly.”

Last year the company announced it was closing an infant formula factory which serves the Chinese market, citing a sharp decline in the country’s falling birth rates. The number of deaths outstripped the number of births in the country by 2mn in 2023.

Schneider acknowledged that the group had made errors in China.

“In China what happened in the last decade was a number of mistakes that prevented us from fully capturing the opportunity. A couple of ventures didn’t work out,” he said, citing the acquisition of peanut milk brand Yinlu and the loss of market share in infant formula.

The opportunity in providing nutritional products for ageing populations intersects with the opportunity presented by the growing uptake of obesity drugs, he added.

Research shows, for example, that people using GLP-1 weight-loss drugs struggle to maintain muscle. Nestlé has responded by launching a line of ready meals — Vital Pursuit — which contain extra protein and fibre, and portioned to suit a GLP-1 user’s appetite.

“When we talk about healthy ageing in humans, it is not only longevity but also about improved quality of life in your later years,” he said.

The ageing opportunity also applied to pets, another growth driver for the group, he added.

“As you become beholden to a particular pet, you want to preserve its lifespan as much as possible and avoid any medical issues.” The company sells a smart litter box system for cats, which can detect health conditions based on the animal’s behaviours and weight changes.

Schneider said premiumisation in wealthier markets, where pets are increasingly seen as fully entitled household and family members, was still driving growth in pet food and petcare sales.

The other driver was “caloric conversion” in emerging markets, he said, where people were switching away from using household food waste to feed their animals dedicated pet food.