Indicted after the scandal of contaminated Buitoni pizzas, Nestlé was also indicted regarding illicit treatments of supposedly natural or spring mineral waters. Two cases which shook the world number one agri-food company. And forced him to make strategic decisions.
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The Swiss giant offloaded, in 2023, the Buitoni frozen pizza factory in Caudry, in the North. At the same time, he chose to disengage from the frozen pizza business in Europe by creating a joint venture with the PAI investment fund, holding only a minority share.
Now, it’s the turn of the bottled water business to be in the spotlight. Laurent Freixe, the new boss of Nestlé, who took over the reins of the Vevey group on 1is September, after the surprise departure of his predecessor, the German Ulf Mark Schneider, is in charge. He announced on Tuesday, November 19, during a seminar for investors, that Nestlé's activity in the high-end water and drinks segment would be spun off from 1is January 2025 and placed under the leadership of Muriel Lienau, current head of Nestlé Waters Europe.
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“The new management will evaluate the strategy for this activity. This will include exploring partnership opportunities to enable Nestlé's iconic brands and growth pillars to reach their full potential.”declares the group in a press release. A possible disengagement, or at least distancing, is on the table. In 2021, Nestlé sold its regional spring water brands in North America to two investment funds, for an amount of 4.3 billion dollars (4 billion euros). However, the operation did not concern international brands such as San Pellegrino, Perrier or Acqua Panna.
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This decision is part of the action plan presented Tuesday to investors and analysts during the Financial Markets Day focused on the theme “Accelerate Nestlé”. Mr. Freixe has, in fact, a clear mandate: the agri-food giant must return to marked organic growth (without acquisition). The group is committed in the medium term to an annual increase of 4% in its activity, accompanied by an increase in margins, beyond 17%. However, in July, Mr. Schneider was forced to lower his turnover growth forecasts for 2024, from 4% to 3%. The ax of his ouster fell immediately afterwards. In October, this growth forecast was revised downwards again and maintained today at 2%.
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