Commentary: Nestlé's music has improved, but the supertanker is still too slow

Nestlé, the Swiss food giant, is attempting to navigate the evolving landscape of the consumer world, but commentary suggests the company's adjustments are too sluggish. While the sale of its mineral water brands, including names like San Pellegrino and Perrier, is seen as a positive move, it is deemed insufficient to address the company's broader challenges.

The sheer scale of Nestlé, operating 335 factories in 75 countries and selling products in 185 nations, has long been compared to a supertanker, slow to turn. This immense size, while enabling global reach, can hinder agility in a rapidly changing market. Despite possessing a portfolio of well-known brands, some appear dated compared to competitors in the saturated consumer goods sector, leaving Nestlé uncertain about optimal brand positioning.

Approximately two years ago, Nestlé acknowledged its strategic drift, leading to the abrupt departure of its long-serving CEO. The subsequent leadership, initially seeking to recapture past successes, is now under the direction of Philipp Navratil, who aims to steer the company in a new direction. The recent partial divestment of the mineral water business, though anticipated, marks a significant shift for the company, historically closely associated with water.

Market analysts largely support the sale of the mineral water division, characterizing it as a slow-moving business with limited potential for innovation. Furthermore, the numerous controversies surrounding Nestlé's water operations, including allegations of using unauthorized methods to process water for some brands, have drained resources. The deal is expected to inject 2.8 billion Swiss francs into Nestlé's coffers.