Nestlé is creating a new business to house its bottled water and premium beverage brands, as the Swiss conglomerate seeks to recalibrate its portfolio in the wake of anemic growth.
The new global standalone business – which includes brands like Perrier, Acqua Panna and San Pellegrino, among others – will be based in Paris and administered by Muriel Lienau, head of Nestlé Waters Europe. The change takes effect January 1.
The move represents Nestlé’s latest attempt to reorganize and revitalize its bottled water business. After a year-long divestiture, the company unloaded its North America water division for $4.3 billion in 2021 to private investors to form BlueTriton Brands, with the idea of focusing on its premium import labels. Those water brands generated around 3.6% of total company sales for Nestlé in 2023.
It also leaves the future of Nestlé’s stake in the water business in question. Under the new leadership of CEO Laurent Freixe, the Swiss company has promised to back its underperforming brands with increased marketing and ad spending; investment is pegged at 9% of sales by the end of next year.
Yet in a statement announcing the move, Nestlé indicated that “new management will evaluate the strategy for this business,” noting “this will include exploring partnership opportunities to enable Nestlé’s iconic brands and growth platforms to achieve their full potential.”
The move is part of a larger effort by Freixe’s administration to arrest Nestlé’s slipping market share, which has been battered by high supply costs for ingredients like cocoa and coffee, as well as price hikes. Earlier today, the company lowered its profitability projections for the full-year, while vowing to deliver more than $2.8 billion in additional cost savings by the end of 2027. Organic sales growth is projected to be around 2% for 2024.
“Our action plan will also improve the way we operate, making us more efficient, responsive and agile,” said Freixe in a statement. “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.”