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Global Management Forum 2019

Aging markets still have healthy appetites: Nestle chairman emeritus

Brabeck-Letmathe sees chance to feed Asia's growing and graying populations

Nestle Chairman Emeritus Peter Brabeck-Letmathe speaks to the Nikkei Asian Review in Tokyo. (Photo by Yoichi Iwata)

TOKYO -- Food and beverage companies often lament the challenge of coping with aging and shrinking markets. But Peter Brabeck-Letmathe, chairman emeritus of the world's largest food company, Nestle SA, still sees a wealth of opportunity.

First, the world's overall population is projected to grow from 8 billion to 10 billion, he noted in an interview on the sidelines of the Nikkei Global Management Forum in Tokyo.

Second, graying societies require more specialized food to meet the needs of different age groups and health conditions.

And third, he said, there is growing demand for food that has less of an environmental impact. Meat production tends to consume more resources than crops, spurring the development of artificial meat, for instance.

"We should not think only about economic development in general," he told the Nikkei Asian Review. "You can achieve growth for your company even if economic development isn't as favorable as in the past. As a businessman, I'm looking at opportunity, not problems of today."

The 74-year-old Austrian, who served as Nestle's CEO from 1997 to 2008, is also a vice chairman of the World Economic Forum. Underscoring his optimism, he added, "The reason why we have so many new startup businesses is, for me, a sign that there are many, many, many opportunities out there."

In Japan, some food companies attribute stagnant revenue growth to the nation's demographic decline and are increasingly shifting to other businesses, such as pharmaceuticals. Brabeck-Letmathe, however, said the food industry's focus on health and nutrition does not mean it will simply meld together with the drug sector.

"The pharma industry produces medicament. The food industry produces nutrition. Good nutrition can be preventive to sickness," he pointed out. Food, he suggested, is better suited to prevention than healing.

Food can also boost the effectiveness of medication. "If you go through chemotherapy or radiation, which is destroying your immune system, good nutrition can help you reinforce your immune system and help the medicament to be more effective," he said.

Coffee, for which Nestle is best known, will also enjoy strong demand in Asia, Brabeck-Letmathe predicted. A moderate amount of coffee consumption makes people more alert, concentrate better and avoid heart disease, thanks to antioxidants, he argued.

"You see today coffee penetration in China, and even in India, which are all traditional tea-drinking markets," he said. "The opportunity for coffee in Asia is very, very big."

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