Swiss-based Nestlé SA is best known for its chocolate, coffee and breakfast cereals. But it has long been a maker of medical-related products such as the nutrition supplement Boost and specialty foods used in hospitals. Just over a year ago, it decided to take a much bigger plunge into the nutrition business, setting up a separate company called Nestlé Health Science. The goal is to create food-based products that can prevent and treat chronic diseases.
The task of building the new company was handed to veteran Nestlé executive Luis Cantarell, who recently made a rare visit to Canada.
Why is Nestlé investing heavily in the nutrition business?
Around 10 years ago, today's chairman, who was then CEO, said the future of Nestlé should be in delivering good nutrition, health and wellness, rather than just in providing basic food. That stems from the history of Nestlé, which was built by a pharmacist who moved to Switzerland [and developed baby formula]in order to fight infant mortality. The genes of this company started in nutrition.
Our existing business [in this area]provides nutrition for people suffering from malnutrition or living in hospitals, or people who can't swallow. That's been around for years. Eighteen months ago, we took the next step.
We believe that there is a convergence between food and pharma. Chronic diseases [need more]than just the traditional pharmaceutical approach. Our food and nutrition expertise can help create a new industry [where]nutrition plays a bigger role in helping people who live with difficult chronic medical conditions.
With the aging population, getting people healthy at the later stage of life is difficult and costly. We believe health care is going to be in real difficulty if we don't start looking at it in a different way.
What kind of medical problems could be treated with nutrition-based products?
[We are looking at]three kinds of diseases. First, metabolic syndrome [disorders that increase the risk of diabetes and heart problems] Second is gastrointestinal health – all the problems that happen in your intestinal tract. The third area is a more challenging one. We believe there is more and more evidence that good nutrition could help manage cognitive decline.
How would this work?
The idea is to develop good diagnostic tools, and combine them with drugs and nutrition. We believe that the largest drug in your repertoire is the food that you eat three times a day every day of your life. Instead of inventing things, let's try to see how we can work with the components – the nutrients – that are in existing food.
Do you encounter cynicism that a candy-making company is trying to treat diseases like obesity?
It would be easier for Nestlé to say, okay, why do we need to be in ice cream? Why do we have a pizza business? Sell all this kind of stuff and concentrate on [nutrition] But that goes against our fundamental beliefs. Should society ban these kinds of foods? Should we not be allowed to eat ice cream?
We believe that ice cream, eaten in moderation, is a source of pleasure and a source of milk proteins. If you eat 25 servings of ice cream a day, you will die. But the same thing will happen if you eat 25 yogurts a day, and yogurt is considered a good food.
It is about healthy choices, and giving people the right information to make informed decisions.
Why not just teach people to eat better?
Good consumer practices about food are fundamental. We will push that. But it is difficult to teach people when they don't have a [health]issue. They are more open to examining the way they eat once they know something might go wrong. Diagnostics and prevention [through food products]could broaden the scope.
Will you test these products the way drugs are tested?
Yes. The only difference is that, with a drug, you need demonstrate safety as well as efficacy. Here, safety is already a given, because we are going to use what you are already eating.
What happens to your existing nutrition business?
We have taken the existing business and put it into the new company. The medical food arm was already a $1.7-billion business.
What kind of acquisitions have you made?
We bought a company called CM&D in London, with a very promising medical food in the form of chewing gum, that helps people living with chronic kidney disease.
We have bought a company in the U.S. called Prometheus, which is leading diagnostics in gastrointestinal diseases. And we bought a minority stake in a New Zealand company that has products for [digestive health]
What is the status of the research institute you have set up?
When we decided to create a company, we also decided to create an institute. It already has its own buildings, and has engaged around 30 or so scientists. Some of them are leaders [in their fields]from different parts of the world.
Can nutritional treatments cut health care costs?
The cost of malnutrition in Europe, including the cost of people staying longer [than they need to]in hospital, is around €120-billion ($162-billion) a year. [That includes]lost working time, the need for more nurses, etc. But nutrition has never been taken very seriously as a part of the solution [to rising health care costs]
What is the competition like in the nutritional foods sector?
I don't think there is anyone doing the same thing we are. So far, I think our adventure is quite unique.
In the pharmaceutical world, you will see more and more companies [doing this kind of thing,]because it really falls between the food and pharma [worlds] This is a new industry that we are creating.
How did you end up spearheading this effort?
I have been working in this company for 35 years now. I managed the European business for Nestlé and I created the nutrition division some years ago. My last job was as head of the Americas – the biggest division of Nestlé.
The board and the CEO of Nestlé asked me to consider creating something [bigger]in this space. It is outstanding that a big company like Nestlé would put resources and key people into creating this kind of a startup.
How important is nutrition to the parent company right now, and what is its potential?
The business today is 2 per cent of the company. It will grow substantially. My ambition is to create something viable through organic growth, acquisitions, licensing, and partnerships.
President and chief executive officer, Nestlé Health Science
Born in Barcelona, Spain; 59 years old
Economic sciences, Barcelona University
Program for executive development, IMD Switzerland
Joined Nestlé Spain in 1976, in the information systems unit
From 1994 to 1996, ran Nestlé's worldwide coffee marketing operations
Ran the company's nutrition division from 2001 to 2005
Executive vice-president for Europe from 2005-2008, and the Americas from 2008-2010
Named CEO of Nestlé Heath Science on Jan. 1, 2011