Nestlé to create waters and premium beverages standalone business

Nestlé’s water and premium beverages activities will become a global standalone business from 1 January 2025.

Muriel Lienau, head of Nestlé Waters Europe, will lead the new business, with brands including S.Pellegrino, Perrier, Acqua Panna and Nestlé Pure Life.

The new management will evaluate the strategy for this business. This will include exploring partnership opportunities to enable Nestlé’s brands and growth platforms to achieve their full potential.

The move is part of an action plan called ‘Accelerating Nestlé’, which aims to deliver incremental cost savings of at least £2.2b (CHF2.5b) for the Swiss-headquartered company by the end of 2027.

The plan is intended to drive category growth and improve market share performance. Other actions will include targeted investments in winning brands and growth platforms, more focused innovation activities to drive greater impact and systematically addressing underperformers. Nestlé will also step up investment in advertising and marketing to support growth.

Work has already begun on key initiatives across procurement, commercial investments and structural costs.

Laurent Freixe, Nestlé CEO, said: “We will now invest further in our brands and growth platforms to unlock the full potential of our products for our consumers and our customers.

“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. I am confident that we can deliver superior, sustainable and profitable growth and gain market share, while transforming Nestlé for long-term success.”

In the medium term, the company’s organic sales growth is expected to be at 4%+ in a normal operating environment, with an underlying operating profit margin of 17%+.

Nestlé confirmed 2024 guidance, with organic sales growth of around 2%, underlying trading operating profit margin of around 17%.

Looking ahead to 2025, Nestlé expects an improvement in organic sales growth compared to 2024, with the underlying trading operating profit margin anticipated to be moderately lower than the 2024 guidance.

Image courtesy of Nestlé/Flickr