Nestle S.A. (OTC:NSRGF, VTX:NESN) has unveiled a restructuring plan that will cut costs by an extra US$2.8 billion and see its waters and premium beverages spun out into a separate business.
New chief executive Laurent Friexe unveiled the plans at a capital market day as part of a strategy that will double organic sales growth to 4% from 2% currently, fuelled by a hike in advertising and marketing spend to 9% of sales from 7.7%.
"Our action plan will also improve the way we operate, making us more efficient, responsive and agile," Freixe said in a statement, adding the focus will be on core brands such as Kit Kat (pictured), Nescafe and Maggi.
"This will allow us to deliver value for all our stakeholders," he added.
Nestle Waters includes Perrier, acquired in 1992, San Pellegrino and Aqua Panna.
Freixe, a 40-year ‘lifer' at the Swiss food giant, took over as chief executive in September after Mark Schneider departed when a pullback on ad spending saw sales volumes plummet as consumers switched to cheaper own-label brands due to Covid.
"For our brands to win in the market, we need to invest," Freixe said on Tuesday.
"We will generate the resources we need through efficiencies and growth leverage."