Mead Johnson to increase portfolio
Valor Econômico
American multinational Mead Johnson is studying entering in new categories with its food supplement brand Sustagen. According to its President, Nestor Sequeiros, segments such as yoghurt, ready to drink products, "petit suisse" and nutrition bars are being analyzed. This is one of the initiatives to leverage the business in Brazil, which gained more relevance after its spin-off from Bristol-Myers Squibb, last year. "With the separation, Brazil became one of the priorities of the company. We have to launch products and invest. Before, we were merely a Division. The speed of the decisions is now three times faster", he said.
The Executive intends to make the sales of Mead Johnson increase more than 50% this year - from R$ 64 million (US$ 35.6 million) to R$ 100 million (US$ 55.6 million). He bets on two fronts: the Sustagen brand, which is a leader in the segment of nutritional supplements with 64% of market share, and the market of formulae for babies, with Enfamil line, the best selling product of the segment in countries such as China, but with little presence in Brazil. It is for this segment, "pediatric nutrition", that the company is known worldwide. "It's our core business", says Sequeiros. The company ended 2009 with overall net income of US$ 2.8 billion, 2% less than in 2008. The net profit increased 2.4%, to US$ 410.6 million.
It is only in Brazil that Sustagen is the flagship. Today the company opens a plant of the product in São Bernardo (SP), the first independent plant of Mead Johnson in South America (so far, the line was being produced in the Brazilian unit of Bristol). The supplement was launched in the country in 1963. "It is such a strong brand that we are thinking about expand it to other categories". The new products will be intended for the children public, following the strategy that the company has been adopting for a little more than ten years, with the launching of Sustagen Kids, for children, trying to undo the image that nutritional supplements are intended solely for convalescents. A new marketing campaign for the Kids line has just gone on the air.
The company has strong rivals, such as the multinationals Nestlé and Danone, both in nutritional supplements and in children formulae. According to Nestlé, the food supplement market grows in Brazil at an average rate of 10% a year and the company foresees launchings to move forward in such niche in 2010, such as a product intended for the elderly. Today, Nestlé sells seven types of supplements in the country and its main product is Nutren Active - direct rival of Sustagen. Besides the regular Sustain, Danone has Sustain Júnior, for children.
In the segment of baby formulae, also known as "infant milk", the dispute for Mead Johnson is harder, since it only launched the Enfamil line in Brazil in 2008, with little distribution. Rivals NAN, by Nestlé, and Aptamil, by Danone, have been in the market longer and cost less. But the Executive does not see that as a problem. "Our product is more expensive, but it is superior".
To convince the consumer, Mead Johnson, and the rivals, invests in communication with pediatricians -the advertising of formulae for children is prohibited in Brazil so as not to discourage breast-feeding.