Nestlé to spin off water business in attempt to fuel growth

Nestlé is to separate its water and “premium beverages” activities into a global stand-alone business from the start of next year. The move is part of a wider plan Nestlé presented 19 November at the company’s capital markets day to “fuel and accelerate growth”.

Nestlé said the new management of the drinks assets will “evaluate the strategy” for the business, including “exploring partnership opportunities”.

The hived-off operation will be based in Paris under the leadership of Muriel Lienau, head of Nestlé Waters Europe.

Nestlé owns the water brands Perrier, San Pellegrino, Acqua Panna and Pure Life. A company spokesperson confirmed to Just Drinks the “premium beverages” aspect of the spin-off relates to flavoured waters linked to brands such as Maison Perrier.

At the capital markets day event, Nestlé CEO Laurent Freixe, who took the helm in September, described an overall “plan to drive operational excellence, unlock the full potential of the portfolio and strengthen foundational capabilities”.

Delivering its sales for the first nine months of 2024 on 17 October, Nestlé said its water business had delivered mid-single-digit growth “underpinned by continued momentum for San Pellegrino and a recovery in Perrier”.

More widely, in its announcement this morning, Nestlé said it wants to achieve cost savings of at least SFr2.5bn ($2.83bn) above existing initiatives by the end of 2027 to fund increased investments.

Its actions will include targeted investments in “winning” brands and growth platforms, more focused innovation activities to drive greater impact and systematically addressing “underperformers”. Nestlé said it will also step up investment in advertising and marketing to support growth.

Just Drinks