On November 25th, Nestlé Group announced that it had agreed to sell Yinlu peanut milk and Yinlu canned porridge in China to Food Wise Co., Ltd., a deal that includes all shares in Yinlu Food Group’s five enterprises in Fujian, Anhui, Hubei, Shandong, and Sichuan. The Yinlu brand had sales of 700m Swiss francs in 2019 (700m Swiss francs or 5 billion yuan, according to the Nestlé group exchange rate).
It is worth noting that, Food Wise Co., Ltd. is controlled by the Chen Qingshui family, the founder of Yinlu.
However, the parties to the deal agreed not to disclose the financial terms of the deal. The deal is expected to be completed by the end of this year.
The deal will allow Nestlé to focus more on key areas in China: baby nutrition, candy, coffee, seasoning, dairy products, and pet care, Nestlé said in a briefing today. The company is able to take advantage of strong brand advantages, digital capabilities, and innovation engines to drive business growth.
As an important founder of Yinlu food brand and business, Chen Qingshui has controlled Yinlu Food for many years, is also the informant of the marriage between Nestlé and Yinlu, and has been the president of Yinlu joint venture since October 21, 2014.
After handing over the post of president of Yinlu to Cui Woody, an executive from Nestlé, Chen Qingshui will continue to serve as vice-chairman of the Yinlu joint venture.
In an internal document announcing the appointment, Nestlé praised Chen Qingshui for his achievements during his tenure.
The problem encountered in Yinlu business is not only the dispute between popularity and high-end products but also some categories that have lost the favor of consumers. Nestlé is trying to replace these businesses with ready-to-drink coffee products.