Nestle Deepens Investment in Skin Care With 10 Skin Care Research Centers

When most people think of Nestle, they picture chocolate bars and Nesquik drink flavoring. But the Swiss company is about to expand far past its chocolaty roots, announcing plans this month to open 10 skin care research centers across the world.

Nestle already had some investment in healthcare products, purchasing the rights to some of Valeant Pharmaceuticals’ injectible wrinkle treatments and buying out L’Oreal’s share of their joint dermatology venture. The purchases together cost $5.7 billion. Another $350 million will go to dermatology research and development this year, though the amount that will be spent on the research centers is undisclosed.

The first Nestle Skin Health Investigation, Education and Longevity Development (SHIELD) centers will open in New York, Hong Kong and Sao Paolo in 2015, followed by other centers in Asia, Europe and North America.

Nestle Skin Care chief executive Humberto Antunes told Reuters that the centers will serve as multi-disciplinary “theme parks” for skin care scientists, experts and researchers. “We’re going to put (known technologies) together so that we can discover new approaches to caring for the health of people,” he told Reuters.

Nestle is banking on the fact that skin health is generally a growth market, more so than the markets for drinks and packaged foods, but the move is still a gamble for the big company. This is especially true since Nestle will be competing with industry stalwarts like Johnson and Johnson and Allergan.

“There is a lot of room for growth in the skin care industry, and with Nestle’s clout and size they stand a good chance to be successful,” says Michael Ter Mors, Head of Marketing at CosMedical Technologies, Inc. “It will be interesting to see if their new in-house R&D capabilities will create opportunities outside of skin care as well.”

Still, Nestle’s size could be a major advantage when it comes to funding research and development. The SHIELD Centers are designed to do just that: research and develop new ideas. Nestle plans to claim any products from the initiative that suit its brand, and others will be sold to other companies for further development.

Ultimately, Nestle plans to come up with a product line that’s 40% prescription drugs and 60% over-the-counter products like wrinkle treatments and sunscreens.

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