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Nestlé Navigates a Challenging First Half as Pressures Mount Across Key Markets
Nestlé SA reported a 10.3% decline in first-half 2025 earnings, citing headwinds in several major categories and geographies, most notably coffee, confectionery and China. Earnings fell to 5.1 billion Swiss francs ($6.4 billion), with revenues slipping 1.8% to 44.2 billion francs ($55.6 billion). Despite the decline, the company is maintaining its full-year guidance, citing confidence in medium-term growth strategies.
CEO Laurent Freixe emphasized on a July 24 earnings call that Nestlé delivered a "good performance in a difficult environment," while CFO Anna Manz noted weak conditions in North America and a ripple effect into Latin America. Manz added that the company is making progress in market share gains, even as overall demand remains subdued.
Nestlé’s pricing strategies in coffee and confectionery led to mixed results. While coffee showed resilience with lower elasticity and positive internal growth, confectionery sales were hit harder by price sensitivity. Margins in both categories are expected to come under further pressure in the second half due to rising commodity costs.
In China, business decelerated significantly in Q2. Nestlé is now shifting its strategy from expanding distribution to driving consumer demand — a transition expected to create a headwind for up to a year. The Chinese market continues to be impacted by a deflationary environment and low consumer confidence, contributing to what Manz called a “flat” and “underlying negative” market backdrop.
Meanwhile, Nestlé is restructuring its vitamins, minerals, and supplements (VMS) division to focus on premium brands like Garden of Life and Solgar. The company has launched a strategic review of mainstream and value brands, including Nature’s Bounty and Osteo Bi-Flex, signaling possible divestitures.
“This is all part of our broader focus and simplification strategy,” said Freixe, “which will help us accelerate performance in a category that continues to show strong growth potential.”
Original reporting by Food Business News.
Read the full article by Keith Nunes here.
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