Nestlé has announced a major cost-reduction initiative aimed at saving £2.2bn by 2027.
- A separate unit for its water and premium drinks will be established in January 2025.
- Advertising and marketing investments will rise to 9% of sales by 2025.
- New CEO Laurent Freixe initiated a company reorganization to streamline operations.
- These strategic moves aim to enhance Nestlé’s market agility and innovation.
Nestlé is embarking on a significant financial strategy to cut costs by £2.2 billion by 2027. This ambitious plan, spearheaded by newly appointed CEO Laurent Freixe, involves not only trimming expenses but also boosting the company’s advertising and marketing budget. By enhancing these areas, Nestlé aims to maximize its market presence and consumer engagement.
A notable change in Nestlé’s strategy is the decision to create a separate global unit for its water and premium drinks division, effective from January 2025. This restructuring is expected to foster innovation and growth within these categories, as resources are reallocated to support these strategic priorities.
Freixe, who assumed his role in September, has committed to increasing Nestlé’s investment in advertising and marketing to 9% of total sales by 2025, in contrast to the 7.7% recorded in 2023. This shift is a clear indication of Nestlé’s intent to strengthen its brand visibility and consumer outreach.
The CEO’s plans also include making the company more responsive and efficient. A recent reorganization of Nestlé’s executive team aims to streamline operations, a necessary response after the company experienced lower-than-expected sales. This leaner structure is designed to enhance Nestlé’s operational agility.
Freixe expressed confidence in these initiatives, highlighting Nestlé’s strong brand portfolio and global reach. He emphasized that these structural changes are designed to unlock the full potential of Nestlé’s products. By focusing on efficiency and market responsiveness, Nestlé aims to deliver value to all stakeholders.
Nestlé’s strategic initiatives under its new leadership are expected to foster innovation and operational efficiency.
