Nestle is trying to spin off its bottled water business
The Swiss food giant has brought in Rothschild to advise the sale of its water division, including S.Pellegrino and Perrier.
Nestle, the world’s largest food and beverage company, likes big markets with lots of potential customers. And yet, the company wants to get out of the water business.
After announcing plans to spin off its bottled water segment as a stand-alone unit last November, the Swiss giant has now hired investment bank Rothschild to advise on the sale of the division, as reported by Reuters on Thursday.
The unit features heavyweights in the “I have enough money to not ask for tap water” game, like Perrier and S.Pellegrino, and could be worth as much as 5 billion euros (~$5.5 billion), with several private equity firms purportedly interested in bidding.
Drop in the ocean
The move comes as part of Nestle’s wider strategy to slim down, with new CEO Laurent Freixe trying to focus on just 30 or so of the bigger names in the food giant’s portfolio of some 2,000-brands — including Nescafé coffee, Purina pet food, Lactogen baby formula, and Kit-Kat chocolate bars, among many others.
Indeed, it’s hard to overstate how vast Nestle actually is. If you sampled one of the company’s brands every single day, it would take you over 5.5 years before you’d tried them all.
But the group’s revenues still boil down to its biggest names. Nestle’s beverage sector constituted 27% of the group’s huge net sales, worth ~91 billion Swiss francs (~$101 billion) in 2024, with petcare brands making up 21%. Meanwhile, its water division made up just 3%.
Lost its sparkle
Still, water has become a turbulent category for Nestle in recent times. Besides scarcity fears mounting and demand for bottled water weakening more broadly, Perrier in particular is currently embroiled in a filtering scandal. Just last week, the French government ordered Nestle Waters to remove its microfiltration systems and stop using the term “natural mineral water” to describe the brand.
Inside scoop… Nestle previously spun off its ice cream business, including household name Häagen-Dazs, into a joint venture with a private equity firm in 2019 — which has more than doubled its revenue since.
