Silver economy is worth 60% of Nestlé Italy's business, eyes on new M&A

(Il Sole 24 Ore Radiocor) - The 50 to 65 year old consumer target group is worth 35% to 38% of Nestlé Italy's sales. Extending the range to the over 65s the incidence reaches almost 60% of the company's business in our country. This was highlighted in an interview with Radiocor by Marco Travaglia, president and CEO of the Nestlé Italia group. Originally the company was set up to address the nutritional needs of children, to be precise children born prematurely, but today the future strategy of the Nestlé group in Italy also looks to the Silver economy. "It is an age group that is certainly important for us and prospectively will be increasingly so because it will have a growing weight," says the top manager.

According to Istat data, in fact, life expectancy at birth in Italy is growing and in 2024 it will reach 81.4 years for men and 85.5 for women. "This inverted demographic pyramid is worrying because of the lack of births, but at the same time it is a fact that this part of the population will become more and more predominant and will have an evolution in its needs," says the CEO. Moreover, "looking at the agro-consumer sector 'boomers' spend on average almost 10 per cent more than the national average and are also more inclined to buy premium and healthy products," Travaglia explains. Several strategies are being implemented by the company to intercept this target, starting with organic growth, with the strengthening of the product portfolio. Inorganic growth is also fundamental: a year and a half ago, the acquisition of Solgar, a nutraceuticals, vitamins and supplements company, made it possible to expand the products in the portfolio and 'as a company we remain attentive to the possibilities offered by acquisitions', says the CEO. Finally, the channel strategies that aim at strengthening in pharmacies also to intercept consumer needs. Different strategies that inevitably entail investments: 'We continue to invest between 1.5 and 2% of our turnover in research and development and the bulk of these investments, I would say at least 50%, is now oriented towards this type of strategy of improvement and continuous refinement of the nutritional quality of our product portfolio,' Travaglia says.

Nestlé Italy's turnover in 2024 amounted to EUR 1.921 billion with a growth of 2.3% compared to 2023, accounting for approximately 2% of global turnover: the Nestlé Group in fact ended last year with a turnover of CHF 91.4 billion (approximately EUR 97.6 billion), down 1.8% compared to the previous year.

Turning to the silver economy, a recent study by Itinerari Previdenziali estimated that its value in Italy over the next few years could oscillate between 325 and 500 billion euro: that is, a share of 20-30% of the national GDP. It is, therefore, a large and potentially growing market segment, one in which Nestlé Italia is present but which it also aims to strengthen by focusing on research: 'We have many active research and development centres around the world on nutrition issues. Our R&D Centre in Switzerland is the largest research and development centre in the food sector, with about 400 experts who are engaged in scientific studies precisely to improve people's health, in addition to the collaborations we have had with start-ups and universities. That is why at the moment we are more focused on organic development, but we remain attentive to what is happening in the market,' says the ceo

And it is in this direction that "Ageless Age", the 15th edition of the Nestlé Observatory dedicated to the theme of ageing, is set. Giuseppe Fatati, the Observatory's scientific coordinator, and Nic Palmarini, Director of the UK's National Innovation Centre for Ageing, led the collection and analysis of data to create a picture that photographs the lifestyles and diets of Italians. "The aim is to deepen the wealth of insight that has emerged from these initial analyses and then seek to create product proposals increasingly tailored to different needs and to orient the company's future choices in this direction," thus expanding Nestlé Italia's market share within the silver economy sector, concludes Travaglia.