Nestle pumping in $500 million in medical food business

The food giant, Nestle has announced that it will be investing $500 million in the medical nutrition business. This will be done in another 10 years and is being done with the idea of grabbing a slice in the growing food market which caters to the patients of chronic diseases and obese people.

Nestle SA said while talking to media that it wants to be a pioneer in this segment and for that it will also be starting a new nutrition institute in Switzerland along with a subsidiary called Nestle Health Science SA.

The company is also one of the largest producers of processed food and makes brands like Nesquik cereal, Haagen-Dazs ice cream and Nespresso coffee. This segment was able to generate a total revenue of $100 billion during last year.

The other major reason for moving into the food sector is that it wants to challenge Abbott Industries. The Illinois-based pharma company has moved into this area. Chairman of Nestle, Peter Brabeck-Letmathe said that health-care systems are suffering and Nestle just wants to give a helping hand.

Nestle is looking to have cost-effective ways to be able to deal with this situation.