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Nestle aims to nearly double sales via e-commerce by 2025

Nestle aims to nearly double sales via e-commerce by 2025
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The company’s logo appears at the Nestle factory in Konolvingen, Switzerland on September 28, 2020. REUTERS/Arnd Wegmann/File Photo

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(Reuters) – Nescafe maker Nestlé (NESN.S) said on Wednesday it expects to double its e-commerce sales to nearly 25% of its total portfolio by 2025 via increased marketing and technology investments.

Mark Schneider, CEO of Nestlé, said Nestlé will drive sales of its products directly to consumers via its own online channels, or directly to the consumer, building on the success of Nespresso and Purina PetCare coffee capsules, which are increasingly being sold directly to consumers via Nespresso. com and Purina.co.uk.

“We plan to raise (e-commerce) sales from around 13% in 2020 to 25% by 2025,” Bernard Meunier, Head of Strategic Business Units, Marketing and Sales, Nestlé, said at the Virtual Investor Summit.

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This will be achieved by increasing investment in digital marketing to 70% by 2025 from 47% in 2020, Monnier added.

Chocolate maker KitKat did not provide details on how much investment will be funded through self-financing and savings. So far, the company said, Nestlé’s e-commerce investment has not been dilutive for business.

Nestle’s total sales in 2020 were 84.34 billion Swiss francs ($90.71 billion). E-commerce sales represented 14.1% of the total in the first nine months of 2021, compared to 12.8% in the same period in 2020. Read more

Monnier said e-commerce sales growth will be driven by markets such as the US, Europe and China.

Major food manufacturers are seeking to sell more of their products to consumers directly, in part to collect data on shopping habits. Also, Apple Inc (AAPL.O) and Alphabet’s Google is taking steps to prevent advertisers from tracking user data without their consent, forcing companies to look for new avenues. Read more

Nestlé said its investment will generate 400 million first-party data points – information collected directly from consumers – which will feed an analytics system to predict how out of stock and where sales can be boosted. The company currently collects about 205 million data points.

Digital marketing investments will also be used to add more staff and expand the company’s in-house advertising studios rather than relying on digital agencies.

“In a world where there is no rulebook to follow, a lot of learning has already been done and we are looking forward to the next stage,” Schneider said.

(1 dollar = 0.9298 Swiss francs)

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Additional reporting by Siddharth Cavalli in Bengaluru. Editing by Jean Harvey and Jane Merriman

Our Standards: Thomson Reuters Trust Principles.

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