Is Nestlé’s Restructure a New Era for Global Brand Strategy?

Nestlé CEO Philipp Navratil is accelerating a significant portfolio restructure by concentrating resources around four core business units, a move that could offer strategic insights for marketing leaders navigating complexity in large-scale organisations.

The reorganisation centres on pet care, coffee, nutrition, food and snacking, to reduce costs and centralise key functions, including marketing.

Following his appointment in January 2025, Navratil has prioritised real internal growth-led expansion whilst upgrading the company's marketing and innovation capabilities.

These strategic actions contributed to an organic growth rate of 3.5% in recent performance, with revenue projected to increase between 3% and 4% in the coming year.

The Swiss multinational is focusing on winning categories and leveraging commercial synergies to drive sustained improvement and long-term shareholder value.

Management expresses confidence in the company's recent performance, despite challenging macroeconomic conditions and weakening consumer sentiment. Real internal growth (RIG) remained positive across all zones and global businesses.

"I am encouraged by our performance, which reflects the targeted actions we have taken in a difficult external environment," Philipp says.

He notes that targeted growth investments helped drive RIG acceleration from 0.2% in the first half of the year to 1.4% in the second half. Improving organic growth and market share trends could suggest that the current strategic actions are delivering results for the world's largest food company by revenue.

Concentrating resources on core categories

The company is directing resources towards global powerhouses in coffee, pet care and nutrition, which together account for approximately 70% of sales. Food and snacks remain a strategic priority through leading regional positions and global brands, including Nescafé, Nespresso and Purina.

"We are focusing our portfolio on four businesses, led by our strongest brands, with prioritised resources and a simplified organisation," Philipp says.

To drive this focus, the company is in advanced negotiations to sell its ice cream business to Froneri. Additionally, Nestlé Waters & Premium Beverages is expected to be deconsolidated as the company engages with potential partners. This portfolio simplification approach could provide a framework for CMOs managing sprawling brand architectures across multiple categories.

Directing investment towards growth platforms

Growth investments are being channelled toward high-potential platforms, such as cold coffee, medical nutrition and pet therapeutics. These platforms have been expanded to represent 30% of group sales and are expected to deliver high single-digit organic growth.

"We are upgrading our marketing and innovation and increasing investment behind high-potential growth platforms," Philipp says. He explains that these platforms capitalise on competitive strengths in structurally growing areas.

An additional investment of CHF 0.6bn (US$0.78bn) is planned to support these platforms, as part of a medium-term ambition to grow organic sales at a rate of 4% or more. This targeted approach to resource allocation demonstrates how marketing investment can be concentrated behind platforms with the strongest growth trajectory rather than distributed evenly across a portfolio.

Operational efficiency supporting marketing transformation

Efficiency programmes and business transformation are central to Navratil's plan to strengthen the company's financial position. Nestlé is simplifying its organisational structure and clarifying accountabilities to improve productivity, with direct implications for how marketing functions operate within the business.

"We are stepping up our efficiencies and strengthening our financial position," Philipp says. He indicates that faster execution of this focused strategy is expected to deliver sustained improvement.

The company is targeting CHF 1.0bn (US$1.29bn) in annual operational efficiency savings, with 20% of white-collar professional savings already achieved ahead of the original plan. The centralisation of marketing functions as part of this restructure could mean greater consistency in brand strategy execution whilst potentially reducing duplication across markets.

For the first time in more than a decade, billionaire brands' share growth is turning positive, which Philipp views as a sign of progress. Whilst the infant formula recall is expected to have a sales impact, the overall group volume share is now flat.

"While there is more to be done, we are confident that our faster execution of a more focused strategy will deliver sustained improvement," Philipp says.

He notes that the company's actions have delivered broad-based momentum in organic sales growth, with improvement across every category and zone. This restructure could provide a case study for marketing leaders evaluating how portfolio simplification and centralised functions might drive both efficiency and growth in complex organisational environments.