A recent Wall Street Journal Article by John Revill explains how a new food market is emerging, and how Nestlé is at the forefront for researching it. Nestlé scientist are investigating genetic profiles to develop new prescription foods and drinks to meet specific nutritional requirements to treat diseases. With an aging world population, it’s a market with big potential and has an estimated $15 billion in potential revenue.
Ed Baetge, head of Nestlé’s Institute of Health and Science states, “For a long time, nutrition has been seen as a sort of pseudoscience. For many conditions like age related dementia, for example, there is a major clinical need for new approaches, and where food can make a big difference.”
Nestlé has machines costing
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Many bioengineering scientists are still not satisfied that these medical food products will work. Scientist Ben Locwin states, “There is currently insufficient evidence documenting that these foods provide a medically relevant effect.”
With any uncharted market, it has its risks and rewards. Being an early entrant, Nestlé is taking that risk in hopes of gaining an advantage over its competitors with a strong product that can be sold for years. According to the article, if Nestlé can successfully enter this new market, then the profits could potentially be massive. With that potential revenue comes the threat of new entry. Nestlé must continue to invest money into their research and development programs to deter any new competitors.
Nestlé is a Fortune Global 500 company. From that comes incumbency advantages over potential rivals. It was stated in the article that Nestlé has been purchasing many bioengineering firms. This gives Nestlé the advantage of having proprietary technology, and having cumulative experience that can allow Nestlé to learn how to produce these new foods more efficiently over