Nestlé reduces water business

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The largest food company in the world, Nestlé, has further reduced its water business and sold the North America division for more than four billion dollars.

Nestlé's business with water has been upsetting for years. Entire campaigns and numerous documentaries were unified by the accusation: The food giant was making billions in profits from natural water sources and thus destroying the livelihoods of people and animals on site.However, it is questionable whether the latest transaction by the Swiss is related to this international criticism. The food giant is selling its North American water business for $ 4.3 billion to the US financial investor One Rock Capital Partner, as the Swiss group announced on Wednesday night. Brands such as Poland Spring, Deer Park, Ozarka, Ice Mountain, Arrowhead and Pure Life, as well as the US beverage delivery service ReadyFresh, are sold.

CEO Mark Schneider said, this sale enables us to create a more focused business around our international premium brands, local natural mineral waters and high-quality, healthy hydration products.

The sale of the North American business is thus part of a larger plan. For some time now, Nestlé has been focusing its water business on premium brands such as Perrier, S.Pellegrino and Acqua Panna. They are therefore not part of the deal.

CEO Schneider wants to put another focus on functional water, for example water enriched with magnesium.

The CEO said, we are continuing to transform our global water business and align it for long-term, profitable growth.

Nestlé sold its Chinese water business at the end of August 2020.

The new deal is no big surprise in the financial market. At the beginning of February, the media had already reported on the relevant negotiations. Nestlé itself announced the strategic review of the water business in the US and its possible sale last summer. The water business is actually one of the product categories that Nestlé itself has defined as high-growth.But the division has not been able to meet this requirement for a long time. In the first nine months of the 2020 financial year, water revenues fell organically by 7.9 percent. No wonder, then, that Nestlé has recently been buying into high-growth areas such as healthy ready-to-eat meals.