Nestlé is reducing the sugar content in its Nesquik chocolate drink powder and updating its marketing to boost slowing sales. It has launched lower-sugar versions in the U.S. and Europe and plans further reductions. Nestlé recognizes that consumer tastes are changing, with demand growing for healthier options and less sugar. It is also overhauling marketing to better target digital native families. Through reformulations and a new advertising approach, Nestlé aims to make Nesquik a more sustainable brand for the long term.

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VEVEY, Switzerland—The Nesquik bunny is slimming down, and so is the chocolate
drink whose package it has adorned for decades.
Nestlé SA is betting reduced sugar and a new advertising strategy will boost sales amid a
growing consumer backlash against sweet drinks.
The revamp comes amid a broader makeover at the world’s biggest packaged-food
company by sales, as it attempts to deploy its research and marketing muscle to meet
rapidly changing consumer tastes—and turn around lackluster revenue growth.
Nestlé for years has fallen short of its own 5% to 6% target for annual organic growth.
For a company with sales of around $90 billion a year, that’s a tall order in the best of
times. But Nestlé and its rivals have struggled to boost volumes and lift prices amid
consumers’ push for healthier fare and super-competitive markets.
A recent push into health sciences offers hope, but that unit is too small to make a big
difference in the short term, analysts say. That leaves Nestlé reliant on standbys
including Stouffers’s frozen TV dinners, KitKat chocolate bars, Nescafé instant coffee
and powdered drinks like Nesquik.
Nesquik and Milo, a malted beverage popular in Asia, generate combined sales in their
various forms of about 3.5 billion Swiss francs ($3.4 billion) a year for the company,
according to analyst estimates, or 4% of Nestlé’s overall revenue. Nesquik’s status has
endured with powdered, syrup and ready-to-drink options. It is No. 2 in the global
flavored-powdered drinks market behind Milo, according to market-intelligence firm
Euromonitor.
Nesquik, launched in 1948 in the U.S. as Quik, once benefited from some healthy-eating
bona fides: chocolate powder got children to drink milk. Today it faces a barrage of
competition from cheaper chocolate drinks sold by big supermarket chains. It also finds
itself, along with powdered competitors and sodas, at the epicenter of debate over sugar
content.
A few years ago, Nestlé executives concluded that Nesquik—a prized “billionaire” brand
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http://www.wsj.com/articles/nestle-seeks-to-sweeten-nesquik-sales-by-cutting-back-on-sugar-1485513004
BUSINESS EUROPE EUROPEAN BUSINESS NEWS
Nestlé Seeks to Sweeten Nesquik Sales
by Cutting Back on Sugar
Revamped chocolate drink and new marketing strategy come amid a broader makeover at
packaged-food company
| |
Nestlé has introduced lower-sugar versions of its Nesquik chocolate drink. PHOTO: ANDREW BURTON/GETTY IMAGES
Jan. 27, 2017 5:30 a.m. ET
By BRIAN BLACKSTONE

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in Nestlé speak, meaning
more than $1 billion a year in
sales—was showing its age. It
had too much sugar and a
marketing theme centered on
the omnipresent cartoon
bunny.
“We did not believe that
where Nesquik was is a
sustainable way of continuing
with this brand,” said Nestlé
executive vice president
Patrice Bula, who is
spearheading the revamp, in
an interview.
In 2015, the company
introduced a reduced sugar
version in the U.S. The next year, it launched an additional version in France, cutting
added sugar from 10.6 grams a serving to five grams. It plans another new launch this
spring in the U.K. and then other European countries, cutting added sugar by an
additional 30% to 3.4 grams a serving.
Nestlé plans a U.S. launch in 2018 of the lower-sugar version it is introducing in Europe
this year. That is something even big fans of the drink say they would embrace.
“Sometimes, I worry that I’m overindulging the girls since they do drink their milk with
it twice a day,” said Erica Chao, 37 years old, of Miami, who has been drinking Nesquik
since she can remember, and now gives it to her daughters. “A new formula with less
sugar is not a bad idea at all. I really don’t think the girls will even notice it.”
After Nestlé introduced its lower-sugar version in the U.S. two years ago, Nesquik
market share moved higher, to 10.8% of the U.S. market for chocolate-flavored powder
drinks in 2016, according to Euromonitor, up from 9.8% in 2013.
Still, skeptics say there may be limits to what Nestlé can do. Nestlé excels at R&D and
traditional marketing, but it hasn’t reacted quickly enough to an era when parents and
young children get information on mobile devices as much as they do from TV, some
analysts say.
“The new generation is so different from the moms and kids they were serving from the
1950s through 2010,” said beverage-industry consultant Tom Pirko. “How relevant is
that bunny to four- or five-year-olds on their iPad; how do they identify with that?”
With the Nesquik revamp, the company is taking steps to catch up.
In November, Nestlé teamed up with Barcelona’s soccer team to promote Nesquik and
Milo. Nestlé has made two global brand films and plans a website, called Nesquik
Studios, this year.
The Nesquik bunny, the cartoon rabbit that has appeared on the package for decades, is
smaller and no longer dominates the packaging.
The urgency behind the Nesquik retooling forced executives to overhaul how they make
and execute decisions, Mr. Bula said: “Nestlé has, and also I think it is part of a certain
appetite or sense of Swiss perfection, tried to get everything really right, which delays
you.”
A short drive from company headquarters along Lake Geneva, scientists at Nestlé’s
labyrinthine research center—cut into the hills near Lausanne—are tackling the health-
taste trade-off. “The innovation is on the ingredients side,” said Olivier Roger, a 12-year
Nestlé veteran whose team of 10 scientists experiments with ways to reduce sugar.

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Mr. Roger looked at 160 suppliers over two years to create the new formula for Nesquik.
In the same building, Nestlé built a mini factory where prototypes can be produced and
tested quickly.
“We have a little more pressure to succeed,” said Mr. Roger.
—Stu Woo contributed to this article.
Write to Brian Blackstone at brian.blackstone@wsj.com
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