Nestlé’s new CEO promoted a five-prong plan last week that will sharpen its portfolio – and shrink its headcount – in a bid to become a “simpler, faster, more competitive and more innovative” business, as described by the company’s chairman at the CPG giant’s annual general meeting last week.
Speaking to shareholders for the first time as CEO after 25 years with the company, Phillipp Navratil acknowledged Nestlé has had to “navigator our own challenges” – an oblique reference to the abrupt dismissal of his predecessor Laurent Freixe due to an undisclosed relationship last fall and the more recent theft of more than 400,000 KitKats last month that revealed how vulnerable the food supply chain is to criminals. The upheaval comes as it separates its ice cream unit and advances the sale of a stake in its premium water business – both of which include iconic brands.
But, he emphasized, “we have a plan.”
He explained Nestlé is “moving forward with renewed focus and urgency” on five strategic priorities that will center the company on four core businesses.
Early results, including market share gains in the second half of the year, underscore the promise of the strategic shift – but the gains come with losses, most notably 16,000 jobs, or about 6% of its global workforce, that will be cut under Navratil’s restructuring plan.
‘Nestlé is at a turning point’
The first prong of Navratil’s turnaround strategy focuses on creating a “winning portfolio” that is smaller, but stronger.
“After reviewing our entire portfolio, we have sharpened our focus on four core businesses: Coffee, Petcare, Nutrition and Food & Snacks,” which together “give us strong competitive advantages and powerful synergies” to deliver “sustained, profitable growth,” Navratil told shareholders on April 16.
Left off this list are the company’s lowest performing businesses, including milk products and ice cream, which accounted for 10.8% of the company’s sales in 2025 and is being spun out, and water, which accounted for 3.5% of sales.
The company’s strategic evaluation of its water business “is ongoing” and includes “exploring partnership opportunities,” the company said its in annual shareholder report.
Also potentially on the chopping block is the company’s vitamins, minerals and supplements business, for which a strategic evaluation is “continuing” and “may result in divestment,” according to the report.
On the list of businesses to keep are the top selling segments. This includes Nestlé’s powdered and liquid beverages, which brought in 28.1% of sales last year and which includes its iconic coffee brands. The company’s pet care business brought in 20.6% of sales, followed by its nutrition and health sciences division, which earned 16% of sales and its prepared dishes and cooking aids business that earned 11.3% of sales. Confection also follows under food and snacks and brought in 9.7% of sales last year, according to the company.
The decision about what to keep and what to divest was based on “an unbiased, data-driven approach,” according to the company.
RIGged for success
Each of these businesses will be supported by Nestlé’s second strategic priority – achieving high single-digit organic growth led by real internal growth, or RIG.
This includes building consumer-driven, multi-year innovation pipelines at a global scale in three areas in 2025, including coffee, pet care and nutrition and health, according to the company.
Within coffee, the brand plans to leverage its three iconic, billion dollar brands – Nescafe, Nespresso and Starbucks – to attract consumers who want barista-style experiences at home and more customization options, according to the company.
Likewise, the brand will appeal to younger shoppers by creating more cold coffee products in different formats and flavors, Navratil said.
The company will focus on products that can be replicated across brands and global regions, such as its concentrates and ready-to-drink options, he added.
Other food trends the company is leaning into include expanding its air fryer range of flavors and recipe mixes, debuting new noodle offerings, combining chocolate and biscuits with its Chocobakery treats, making protein more readily available through its Orgain shakes and high-protein Milo Pro line.
Transforming the culture
To effectively deliver the full potential of these businesses, Nestlé’s third priority focuses on transforming how it works, which includes “strengthening our shared services by expanding their scope, scaling their use and driving greater standardization and automation,” Navratil said.
It also includes “simplifying our structure” by “removing layers” and reducing duplication,” and consolidating activities that benefit from global coordination, like innovation, he said.
“This results in a simpler, more agile Nestlé, which is helping us increase our speed and drive efficiencies,” he said. “In fact, we are on track to deliver three billion Swiss francs in cost savings by the end of 2027.”
This streamlining also includes the loss of upwards of 16,000 jobs, but for those who are staying Navratil said the company will clarify their roles and responsibilities as part of another strategic prong focused on enhanced performance culture.
“To provide employees with clear expectations, we have revised our performance framework. We have linked personal goals to standard KPIs. And we have adapted our incentive structures to reward tangible results,” Navratil said.
He added: “Employees appreciate the clarity. They know what’s expected. And they feel empowered to deliver. There is a stronger focus on execution. We support each other. We celebrate the wins.”
Not everyone feels empowered though.
The Teamsters Food Processing Division recently argued that “Nestlé is actively engaged in union-busting at facilities where workers with Teamsters Local 238 are fighting for a voice on the job.”
Division director Jesse Case alleged the company is “deploying pressure tactics, stalling organizing efforts and denying workers a fair process.”
A strong cash flow
The last prong of Nestlé’s five-part plan is to increase cash flow and prioritize capital allocation “through financial discipline, better data and enhanced governance,” Navratil told shareholders.
Together the five-prong plan and focus on four strategic areas is a numbers game that Nestlé leaders say can help make the company #1 if executed quickly and correctly.
“We are executing this plan with discipline and urgency” and grounding it in “our unwavering commitment to taste, quality and safety” to deliver a “stronger Nestlé” that can enhance the quality of life, Navratil concluded.
