Nestle's new taste for risk is welcome -Reuters Breakingviews

Pressure is building on the world's biggest food company. Nestle <NESN.VX> is well run and financially strong. But annual results show sustaining growth is hard, especially in developed markets.
   The Swiss company has a long-established record of growing revenue at between 5 and 6 percent annually. A wobbly world economy meant it fell shy of that target last year, and said sales in 2014 would rise by only "around 5 percent." Most growth will come from emerging markets. They already account for 44 percent of Nestle's overall revenue and generated organic growth of 9.3 percent in 2013, against European growth of 1 percent.
   If Europe continues to drag, it will be hard for Nestle to meet its top-line ambitions. And some Nestle products are on the wrong side of secular as well as economic shifts. All confectioners must worry about how the world tackles obesity, for instance.
   Still, Nestle is adapting. Given tough markets, it did well to avoid shrinking in Europe last year. It has made labels clearer to stem concerns about sugar. More importantly, it is exploring new ideas. Having shifted emphasis from confectionery to nutrition, it is now taking a big step into skincare. A Feb. 11 deal with L'Oreal <OREP.PA> sees Nestle take full control of Galderma, a joint venture, for 2.6 billion euros. Nestle clearly has bigger ambitions for the new "Skin Health" division that will be based around Galderma.
   Skincare sits well with Nestle's existing focus on "wellness." There may be crossovers in the development of nutritious foods and acne creams, and useful overlaps in marketing and distribution. But expansion brings risk. Nestle might buy lemons, misjudge the potential of new markets, or run up against tougher regulators than it is used to in chocolate and coffee. The Jenny Craig weight-control business, bought and now sold at a loss by Nestle, shows the dangers posed by misplaced ambition.
   Nestle shares trade on 19 times forward earnings. That outranks a sector averaging 17 times and Europe's Stoxx 600 index, on just 14 times. The company can only sustain that premium rating if it goes on the offensive.