Industry updates

Nestlé projects 25% of sales will soon be digital

Nestlé S.A., the world’s biggest public food and drink processing company headquartered in Vevey, Vaud, Switzerland, sees more ecommerce in all forms too sweet a deal to pass up.

Nestlé, which counts North America as its biggest market and is the maker of baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks, has laid out an ambitious plan to make ecommerce account for 25% of all sales as soon as 2025.

“Nestlé is accelerating its data-driven digital transformation across all categories and geographies,” Bernard Meunier, executive vice president and head of strategic business units, marketing, and sales, said at the company’s annual investors day in Barcelona last week.

Today, ecommerce, which many consumer brand companies define as the online sales of their retailers and distributors accounts for about 15% of all sales, up from 8% in 2018. Nestle did not break out any specific ecommerce sales but the company, which produces such well-known brands as Nescafé, KitKat, Nespresso, Maggi, Toll House, and Milo, posted total sales of $95.71 billion in fiscal 2021.

Digitalization is a key ingredient to continued business success, Nestlé says. “Digitalization touches on all aspects of Nestlé’s business, from supply chain management to production to marketing and sales firmly establishing Nestlé at the leading edge of the food and beverage industry,” the company says.

The company says is moving to connect with consumers in a relevant and personalized way. In 2019, 20% of all consumer contacts with Nestlé were personalized. The objective is to reach 40% by the end of 2020. Nestlé also has also built a network of more than 25 e-content studios. “These studios create impactful and locally relevant content with speed and efficiency, producing market- and consumer-specific communication materials in less than 48 hours,” the company says.

Nestlé is also transforming operations by further digitalizing its supply chains and manufacturing. The goal is to create a competitive edge through data, artificial intelligence, automation, and predictive analytics. For example, at the end of 2019, 100 Nestlé factories were equipped with ‘collaborative robots’ that interact with humans in a shared space or work safely in proximity.

We expect to increase our investment in digital marketing by 50% and almost double the percentage of e-commerce by 2025,” the company says. “Nestlé is accelerating digitalization, using data and technology to unlock efficiencies and growth opportunities,” the company says. “We are taking advantage of rapid shifts in consumer behavior by amplifying our digital-centric businesses and scaling digital capabilities.”



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