Navratil’s Strategic Overhaul Reshapes Nestlé’s Future

Nestlé's new chief executive, Philipp Navratil, is accelerating a sweeping corporate transformation, with the recent full divestment of the Herta processed meats business serving as a clear signal of his intent. The Swiss food and beverage conglomerate is decisively shedding non-core assets to sharpen its focus on cost efficiency and high-margin growth categories, including pet care and coffee.

In a definitive move, Nestlé has exited the sausage and processed meats sector entirely after six years. The company sold its remaining 40% stake in the Herta joint venture to its Spanish partner, Casa Tarradellas. While the financial terms of the deal were not disclosed, the strategic rationale is unambiguous: traditional meat products no longer align with a portfolio increasingly oriented toward health and wellness.

This transaction concludes a process initiated in 2019, when Nestlé first sold a majority stake in the business. The Herta unit had been generating annual revenues in the high hundreds of millions of Swiss francs.

Deep Cost Cuts and Targeted Growth Initiatives

The Herta sale represents just one component of Navratil's broader strategy to boost Nestlé's free cash flow back to CHF 10 billion. In a recent interview, the CEO—who took the helm in September—confirmed that strategic reviews of the complex bottled water and vitamin divisions are also proceeding at pace.

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Concurrently, a significant cost-cutting program is being implemented, with structural changes including:
* Workforce Reduction: A total of 16,000 positions will be eliminated by the end of 2027.
* Primary Impact: Approximately 12,000 of these cuts will affect administrative roles, with 4,000 in production.
* Financial Goal: These measures are designed to reduce costs by CHF 3 billion.

Alongside these cuts, Navratil has pinpointed specific areas for expansion. He identifies "incredible opportunities" within the pet food and coffee segments to accelerate progress toward the company's 4% organic growth target. Meanwhile, the multibillion-dollar stake in L'Oréal remains unchanged, described as a pure financial investment subject to ongoing review.

Market analysts currently see room for appreciation in Nestlé shares, which trade at CHF 77.83. The average price target among experts stands at CHF 87.90. The effectiveness and timing of Navratil's strategic pivot will become clearer when the company reports its full-year results in February 2026.