Nestlé’s waters and premium beverages to become a standalone business to “unlock full potential”
Nestlé is turning its water and premium beverages activities into a global standalone business as part of an updated action plan to optimize operation performance.
Effective January 1, 2025, the unit will be under the leadership of Muriel Lienau, head of Nestlé Waters Europe. The F&B giant will explore partnerships to leverage Nestlé’s brands and existing growth platforms.
The action plan is presented on the company’s Capital Markets Day for investors and analysts. The presentation includes plans to define its long-term future.
Laurent Freixe, Nestlé CEO, says: “Nestlé is a strong company with global reach, exceptional demand generation and in-market capabilities. We have a diverse and strategically well-positioned product portfolio. Our brands and innovative products connect with people every day, at every stage of their lives.”
“We will now invest further in our brands and growth platforms. Our action plan will also improve the way we operate, making us more efficient, responsive and agile. This will allow us to deliver value for all our stakeholders. We can deliver superior, sustainable and profitable growth and gain market share while transforming Nestlé.”
Growth in the medium-term
Last month, the company lowered its 2024 organic sales growth to 2% after adjusting it to 3% in July amid “weakened” consumer demand. It also introduced key organizational changes, such as merging Zone Latin America and Zone North America to form Zone Americas.
Among product categories, coffee emerged as the largest growth contributor to the company’s nine-month sales record, supported by its leading brands, Nescafé, Starbucks and Nespresso. Confectionery sales grew moderately, with KitKat, Shark Wafer and other local brands being the main contributors.
Water delivered modest growth, driven mainly by the sustained demand for S. Pellegrino and the launch of Maison Perrier.
Under the action plan, the Swiss multinational aims to deliver incremental cost savings of at least CHF 2.5 billion (US$2.8 billion) by the end of 2027, in addition to its ongoing programs. Given a stable operating environment, the company expects its organic sales growth to be around 4% plus in the medium term.
Nestlé plans to speed up its digital transformation to be a real-time, end-to-end connected enterprise supported by data and artificial intelligence. Additionally, it aims to strengthen its focus on integrating sustainability into its activities and increase its investment in marketing and advertising.
