Nestlé announced in a press release today it is seeking to divest several core products and services from its Nestlé Waters North America unit, including regional spring water brands, its purified water business and its beverage delivery service ReadyRefresh.
According to the release, excluding international brands the Nestlé Waters North America portfolio reported over $3.6 billion in sales in 2019. Among the regional water brands considered for sale are Poland Spring, Deer Park, Ozarka, Ice Mountain, Zephyrhills and Arrowhead as well as the Nestlé Pure Life brand, which is available in bottles and 5 gallon jugs.
In addition to the planned divestment, which was approved today by the Nestlé S.A. board of directors, the company will focus on increasing sales of its international brands such as Perrier and S. Pellegrino. As well, the company will seek out “strategic acquisitions” in the water category “while pledging to make its entire global water portfolio carbon neutral and replenish associated watersheds by 2025.”
According to market research firm Nielsen, Nestlé’s unflavored bottled water sales have declined over the past year. Despite reporting over $3.4 billion for the 52-week period ending June 9, sales were down 2.4% year-over-year and declined 14.8% over the past four weeks. Volume sales were down 3.2% year-over-year and 16.9% in the four-week period. Although the division’s sparkling flavored water dollar sales were up to $278 million, a 2.6% increase for the year, those products have also seen recent declines, down 14% in the past month.
“The creation of a more focused business enables us to more aggressively pursue emerging consumer trends, such as functional water, while doubling down on our sustainability agenda,” said Nestlé CEO Mark Schneider in the release. “This strategy offers the best opportunity for long-term profitable growth in the category, while appealing to environmentally and health-conscious consumers..”
The announcement comes roughly four months after Nestlé Waters North America president and CEO Fernando Mercé stepped down, citing personal reasons. Mercé had held the position since 2017 and no successor was named, with the company only saying a new CEO would be named “in due course.” Since February, the division has reported to U.S. market head and CEO of Nestlé USA Steve Presley.
It is unclear how the divestment may affect ReadyRefresh’s partner brands. In addition to delivering Nestlé water brands to homes and offices, the service expanded its portfolio first in November, bringing on Vita Coco, and later adding nitro coffee maker RISE Brewing Co., hellowater and UPTIME Energy.