Nestle U.S. chief seeks to turn around frozen food

Fri Jun 26, 2015 6:41pm EDT
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By Anjali Athavaley

NEW YORK (Reuters) - Nestle SA NESN.VX thinks it can turn around its U.S. frozen foods business despite recent sales declines driven by consumer perceptions that the products are not healthy, the company's U.S. chief executive said in an interview.

Nestle remains committed to investing in its frozen food brands, which include Stouffer's and Lean Cuisine, Paul Grimwood told Reuters on Friday.

"We’ve seen a number of people disinvest in quality in frozen because they’re trying to get their prices lower," said Grimwood, speaking at the Consumer Goods Forum Global Summit in New York. "That’s not the way to go."

Still, the world's largest consumer goods company is grappling with how to counter the U.S. belief that frozen food isn't fresh.

"Fundamentally, our product is as fresh as the product you make in your own kitchen and then freeze," he said.

The business is Nestle's second-largest in the U.S., behind pet care. But it estimates that the category has been declining annually at an average rate of 2 percent in recent years.

Additionally, Lean Cuisine is battling a shift away from diet foods, which Grimwood said are declining annually at a 7 percent to 9 percent rate.

The company is trying to change the product to respond to consumers' new definition of what is healthy. In February, Nestle said it will shift Lean Cuisine frozen dinners from a diet brand to one built around "healthy lifestyles."   Continued...

A Nestle logo is pictured on a van outside the company headquarters in Vevey February 19, 2015. REUTERS/Denis Balibouse