Nestlé Misses Sales Forecast, Considers Streamlined Organization

Nestlé is revamping senior leadership and its operating structure, the food giant announced, as it cut its full-year sales outlook following weaker-than-expected nine-month underlying sales growth, Richa Naidu reported for Reuters.

Unlike many of its competitors, Nestlé did not reduce prices quickly to woo back shoppers who had switched to cheaper alternatives and had for years cut too deeply into marketing and innovation budgets. I Photo: Nestle

The packaged food industry has struggled in recent years with soaring costs, as the price of everything from sunflower oil and shipping to packaging, grain, and energy surged during the pandemic and after Russia's full-scale invasion of Ukraine.

This year, as inflation has eased, many of Nestlé's competitors have slowed price increases in an effort to woo back shoppers who had turned to cheaper alternatives.

The Swiss group, however, did not reduce prices as quickly and had for years cut too deeply into marketing and innovation budgets, according to analysts.

CEO Mark Schneider was ousted in August after several quarters of weak sales volumes. Nestlé now expects 2024 organic sales growth to be around 2%, with an underlying trading operating profit (UTOP) margin of approximately 17%.