Nestlé Unveils a Focused Innovation Strategy: "Fewer, Bigger, Better"
Vevey, Switzerland — Nestlé SA is taking a bold step to redefine its innovation approach by shifting focus from quantity to quality. Annually known for launching over 1,000 innovations and product renovations, the company is set to halve this number, embracing a more strategic and targeted approach aimed at maximizing impact.
“This does not mean investing less in innovation,” said Laurent Freixe, Chief Executive Officer, during Nestlé’s Investor Day on November 19. “It means focusing on fewer, bigger, and better — the bigger bets that have the greatest potential to bring incrementality.”
Sharpening the Focus
The shift comes as Nestlé recognizes that its top 4,000 stock-keeping units (SKUs) contribute to half of the company’s sales and margins. The refined strategy will prioritize breakthrough innovations that significantly impact the market.
“With fewer and bigger initiatives, we leverage our leading science and research capabilities,” Freixe added. “We invest more in R&D than any other company in our industry, and this focused approach ensures we deliver innovations that create a ‘before and after’ moment when they hit the market.”
Five Pillars of Growth
Nestlé has identified five categories for its strategic investments:
- Infant Formula
- Coffee
- Meal Preparation
- Snacks
- Pet Food and In-Home Coffee Appliances
Spotlight Innovations
Among the highlighted products is Sinergity, an advanced infant formula launched in 2023. It incorporates probiotics and six human milk oligosaccharides (HMOs) tailored to support age-specific infant development. Nestlé's research has identified the dynamic nature of HMOs in breast milk, enabling the company to create formulations that adapt to an infant’s evolving nutritional needs.
Another standout innovation is Nescafé Espresso Concentrate Coffee, introduced in May 2023. Designed to cater to the growing demand for cold coffee, this product provides consumers with a customizable option to craft cold lattes and Americanos conveniently. With cold coffee consumption growing 15% in the past four years, this segment is one of the fastest-expanding in the industry.
Scaling Big Bets
Freixe shared that Nestlé plans to add more "big bets" by 2026 and 2027, aiming to have 15 to 20 high-impact projects in development. These initiatives are projected to deliver at least 100 million Swiss francs ($113 million) in incremental sales.
Building on Strength
The new strategy centers on amplifying Nestlé’s existing market strengths. For instance, coffee remains a critical category. “We are the No. 1 coffee company globally, with 25% of the at-home market and the three best brands in the industry,” Freixe said. He noted significant growth opportunities in ready-to-drink coffee, which already generates over 1 billion Swiss francs in sales.
Evolving Marketing Strategies
In addition to its innovation shift, Nestlé is transforming its marketing strategy. According to Anna Manz, Chief Financial Officer, the company aims to increase its marketing investment to 9% of sales by the end of 2025.
“This is not about spending a little bit more everywhere,” Manz clarified. “It’s about significant, targeted investments in our biggest growth opportunities.”
Freixe concluded, “We are determined to allocate the resources it takes to win in the marketplace. This is about building on our winners and ensuring sustainable growth for years to come.”
With its renewed focus on fewer, bigger, and better innovations, Nestlé is poised to continue shaping consumer experiences and driving growth across its key markets.