Nestlé sharpens focus on water business, plans partial sale in North America

SWITZERLAND – Nestlé has unveiled a new strategic direction for its waters business aimed at unlocking opportunity for long-term profitable growth in the category.

The company said that it will focus on its iconic international brands, its leading premium mineral water brands, and invest in differentiated healthy hydration, such as functional water products to drive growth in the business.

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The food and beverage company has also confirmed its intent to explore strategic acquisitions to grow in this category, which counts of 48 brands and generated US$8.24 billion 2018.

As part of the strategic focus, Nestlé has resolved to explore strategic options of its regional spring water brands, purified water business and beverage delivery service at its Nestlé Waters North America.

The company’s board said that the business lies outside the new strategic direction. Nestlé revealed that it is considering a potential sale for the majority of the Nestlé Waters business in North America covering U.S. and Canada and excluding its International brands.

The Nestlé Waters business in North America, excluding International brands, had sales of around US$3.59 billion in 2019. The business also comprises the direct-to-consumer and office beverage delivery service ReadyRefresh by Nestlé, and the Nestlé Pure Life brand.

The Switzerland-based beverage company note that the review is expected to be completed by early-2021.

Nestlé noted that it remains fully committed to growing its iconic International brands in the U.S. and globally, including Perrier, S.Pellegrino and Acqua Panna.

The company has unveiled plans of further expanding its leading premium mineral water brands around the world and invest in differentiated products under the Nestlé Pure Life brand, such as functional water with health-enhancing ingredients.

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Mark Schneider, Nestlé CEO, said that the creation of a more focused business will enable the company to more aggressively pursue emerging consumer trends, such as functional water, while doubling down on its sustainability agenda.

“This strategy offers the best opportunity for long-term profitable growth in the category, while appealing to environmentally and health-conscious consumers,” Mark said.

“Nestlé is one of the pioneers in the global water business and remains committed to healthy hydration. We are working tirelessly to ensure that consumers can enjoy our beverages in an environmentally responsible way.”

Pledge to de-carbonize business

Alongside the new strategic direction, Nestlé has made a commitment to make its entire global water portfolio carbon neutral and replenish associated watersheds by 2025.

Nestlé plans to pursue high-quality offsets as well as to invest in projects that reduce or capture carbon across its portfolio to achive the goal. Markedly, the company revealed that it will be prioritizing international brands Perrier, S.Pellegrino and Acqua Panna to achieve carbon neutrality by 2022.

In addition, Nestlé Waters has made a commitment to support the environmental sustainability of watersheds by replenishing 100% of the water it uses, strengthened by a pledge to certifying all of its water sites globally to the internationally respected Alliance for Water Stewardship (AWS) standard.

While Nestlé Waters’ packaging is already 100% recyclable or reusable, the company has further committed to cutting its use of virgin plastic by 50% by using more recycled PET and supporting the roll out of alternative delivery systems.

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