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Nestlé is conducting a broad review of its U.S. portfolio with a “sense of urgency” as the DiGiorno pizza maker seeks to strengthen its brand and secure more dining opportunities amid falling spending and changing consumer preferences, the division’s chief executive said.
In the first interview after Inauguration of Nestlé USA CEO in JanuaryMarty Thompson said the company is considering restructuring the brand by revisiting some of its packaging sizes, focusing innovation on smaller, bigger bets and conducting blind taste tests as part of an aggressive effort to better connect with consumers.
“Our focus right now is on growing the core to its full potential and we believe we have a lot of runway,” said Thompson, 64, who acknowledged the company had previously failed to put enough “energy and emphasis” on its biggest brands. “We will be much more focused on how we manage our resources.”
After running the coffee business for nearly five years, Thompson’s rise to the top U.S. job at Nestle comes as the Swiss-based consumer goods giant and its peers scale back operations in the face of slowing sales and a shift to better products.
Marty Thompson, CEO of Nestlé USAAuthorized by Nestlé
Nestlé is moving forward lay off 16,000 peopleOr about 6% of the company’s global workforce over the next two years. global CEO Philippe Navratil, who took over last September, said this. nestle It will “mercilessly” assess 277,000 employees as part of a wider effort to cut costs by $3.8 billion by the end of 2027.
Thompson acknowledged that job losses in the U.S. “will affect every market and every function in some way, and we’re on the front lines of that.”
nonetheless, He is confident that Nestlé, which already accounts for 97% of U.S. households, can post growth that outpaces the broader U.S. food and beverage sector over the next few years, adding hundreds of millions of dollars in sales to the company’s bottom line.
“We are optimistic and focused,” Thompson said. “When the category is tight, we’re looking for things that will help us grow.”
‘We have work to do’
A big part of driving growth started with product. To ensure that Nestlé USA’s products were as good as they thought, the company launched blind taste tests in which it asked consumers to try its own products and those of its competitors to see which they preferred.
For example, DiGiorno’s pizza by the slice went toe-to-toe with frozen pies like Red Baron, a top-selling brand, and delivery options including Domino’s.
“More often than not, we are out of favor,” Thompson acknowledged. “But we have work to do. We are too hard on ourselves.”
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Provided by Nestle
Nestlé USA expects to complete testing of three-quarters of its portfolio by the end of March and may decide to change recipes, packaging or marketing depending on what it finds.
The United States is Nestle’s largest market, with the region’s food and beverage segment accounting for about 15% of the company’s $114 billion in global sales. Nestlé’s extensive food and beverage business in the United States includes 31 brands across four categories: baking, beverages, coffee, and refrigerated and frozen.
Thompson takes on the role of inheriting a strong portfolio, with most of Nestlé’s U.S. products becoming the number one or two best-selling brands in their respective categories.
DiGiorno, Stouffer’s, Coffee mate and Starbucks packaged coffee each generate more than $1 billion in annual sales, while Hot Pockets, Nestlé Toll House, Nesquik, Nescafé and Lean Cuisine exceed $500 million.
But Nestlé’s top U.S. executives were quick to identify growth opportunities that could be achieved through structural changes or transformations in innovation and marketing.
Earlier this year, Nestlé USA added a single product to its Hot Pockets brand, giving consumers an affordable option that has proven useful in attracting new people to the brand. Additionally, the following innovative products are launched: DiGiorno Wood Fired Style Crust Pizza got help last summer. Nestlé USA increases market share and capitalizes on consumer interest in restaurant-quality dining.
The company also recently consolidated Pizza, Snacks and Meals into one division to better adapt to the way consumers shop in frozen aisles, increase competitiveness and enable better, faster decisions. Likewise, it merged its coffee and creamer segments this year, an important step in narrowing the market share gap between the two segments.
Some of the changes are already starting to pay off.
Nestlé regained market share in its pizza business by ‘rebalancing’ the price-value equation of its products. The decision to combine the coffee and creamer divisions provided Nestlé with an opportunity to cross-promote the two categories, which:“The U.S. creamer business has recovered significantly.” a spokesperson said.
As Nestle focuses on key categories in the U.S., it may also consider divesting some of its underperforming brands. The company has already overhauled its U.S. portfolio in recent years, selling some water. Sale of candy businesses including Butterfinger and Crunch to the Ferrero Group We offload the following ice cream products: Dreyer’s as a joint venture.
Nestlé is currently considering whether to sell some of its struggling vitamin brands and is deciding the future of its premium bottled water business, including Essentia and Sanpellegrino. According to the company, Considering options for Blue Bottle This is a coffee business purchased in 2017.
Thompson did not deny reports of a possible sale, but declined to provide further details.
The executive said he was optimistic about the company’s future and the categories it operates in, despite the headwinds facing Nestle and other CPG manufacturers.
“These are difficult times, but in some ways they are energizing,” Thompson said. “If you look closely at Nestle, you will see that it is resilient and ambitious.”
