Nestlé Returns to Its Roots to Regain Lost GroundBy Ion Jauregui – Analyst at ActivTrades
Nestlé (SWX: NESN), one of the world’s food industry giants, has announced a major strategic shift: a renewed focus on what it does best. The company’s new CEO, Laurent Freixe, has made it clear that the era of forced diversification—particularly into areas like nutritional supplements—is over.
Since taking the helm in September, Freixe has been steering the company back to its traditional food and beverage business, acknowledging that moving away from this core was a mistake that undermined strategic clarity and market share, especially in the U.S. In his own words, mergers and acquisitions are no longer part of the plan: “they are not a strategy in themselves.”
This reorientation comes at a crucial time, as Nestlé seeks to regain momentum and reinforce its position in a challenging U.S. market, shaped by tariff pressures and increasingly specialized competitors. Still, early signs point to a gradual recovery, without the need to reinvent itself as a health or supplement company.
Recent Financial Results
In 2024, Nestlé posted sales of 91.354 billion Swiss francs, representing a 1.8% decline from the previous year. However, organic growth came in at 2.2%, driven by a 1.5% price increase and real internal growth (RIG) of 0.8%. Net profit stood at 10.884 billion Swiss francs, down 2.9% from 2023.
Regionally, sales in North America declined by 2.5% to 25.336 billion Swiss francs, while European sales dropped 1% to 18.910 billion. Sales in Asia and Oceania fell 4.1% to 16.793 billion, and Latin America saw a 2.2% contraction to 11.933 billion Swiss francs.
For the first half of 2025, Nestlé reported revenues of 45.045 billion Swiss francs, a 2.7% year-on-year decrease. Comparable sales grew by 2.1%, driven by a 2.0% price hike and 0.1% volume growth. Net profit reached 5.644 billion Swiss francs, slightly below market expectations.
Technical Analysis
Nestlé’s stock has been correcting since its May 2023 highs, reaching a low in January 2025 before rebounding toward a mid-range level between 78.50 and 98.28 Swiss francs per share. The current price of 88.64 is close to the average zone and the point of control at 86.75 francs. The RSI indicates mild overbought conditions at 60.35%, along with a long-term moving average crossover formed in late March that appears to signal a bullish extension continuing to reflect in the price action. A move up to the 0.5 Fibonacci level (89.60 francs) is plausible, and a further advance toward the next resistance at 94.15 francs (0.618 fibo) cannot be ruled out.
Why Does It Matter?
Because Nestlé serves as a bellwether for the global food sector. Its recent loss of strategic focus shows that even established brands can stumble when they stray too far from their core. This return to fundamentals could not only improve margins and operational efficiency, but also inspire other corporations to reevaluate their strategies. Nestlé is not innovating for the sake of it—it’s reconnecting with its essence: delivering quality products for everyday life.
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