Nestle SA to separate its water brands into standalone business in 2025

Presenting a plan to accelerate growth, Nestle SA said the global giant said it will step up the advertising and marketing spend to 9% of sales by the end of 2025, in order to support growth.

Nestle SA has decided to separate it waters and premium beverages brands into a global standalone business from January 2025, the company informed investors and analysts at the Capital Markets Day on November 19.

Presenting a plan to accelerate growth, Nestle SA said the global giant said it will step up the advertising and marketing spend to 9% of sales by the end of 2025, in order to support growth.  Nestle said it aims to to save 2.5 billion Swiss francs by 2027 by means of cost-cutting measures and the water business spin-off. This, the company said, will be used to fund investments.

Nestle owns popular premium water brands Perrier and Acqua Panna, and other global leaders such as Nespresso coffee and KitKat bars.

"Work has already begun on key initiatives across procurement, commercial investments and structural costs," Nestle said in a statement.

Laurent Freixe, Nestle 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."

The CEO said Nestle aims to improve the way it operates and get more efficient, responsive and agile, in order to deliver value for stakeholders. Nestle added that it aims to accelerate its digital transformation to become an end-to-end connected enterprise, powered by data and AI.

Under Nestle CEO Laurent Freixe's predecessor - Mark Schneider - the company has exited from facial injections business and partially pared stake in the ice cream business through a joint venture with PAI Partners. Rival Unilever Plc too is separating its ice cream unit through a spinoff or sale.

The new management of the water and premium beverages business will evaluate the strategy, Nestle said, including exploring partnership opportunities so the brands achieve their "full potential." The water business represents less than 4% of Nestle SA's revenue, and has faced contamination concerns and supply constraints of late.