Nestlé's New Strategies for Growth

VEVEY (Reuters) – Nestlé will enhance advertising and marketing efforts, reduce costs, and separate its water and premium drinks businesses into a standalone global unit under new chief Laurent Freixe, as announced on Tuesday.

The Swiss food giant aims to achieve cost savings of at least 2.5 billion Swiss francs ($2.83 billion) by 2027, alongside ongoing savings of around 1.2 billion Swiss francs.

Nestlé (NS:NEST) forecasts medium-term organic growth of over 4% in a normal operating environment, with an underlying trading operation profit margin of 17%.

The company plans to increase its investment in advertising and marketing to 9% of its total sales by 2025 to support growth, as stated during its capital markets day event in Vevey, Switzerland.

In 2023, advertising and marketing expenses accounted for 7.7% of sales, up 80 basis points from the previous year, according to Nestlé's annual report.

Additionally, Nestlé announced that its water and premium beverages businesses will be carved out into a global unit starting January 1, 2025.

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