The Swiss food and beverage giant reported strong coffee segment sales across all regions last year, but will need to find a balance between record commodity costs, restrained pricing and planned cost savings
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Nescafé instant coffee and Starbucks ready-to-drink (RTD) products were key performers for Nestlé in North America and Europe | Photo credit: Deepak Rastogi
Nestlé looks set to make further investments in its Nescafé, Nespresso and licensed Starbucks brands after coffee was the standout performer in a challenging 2024 for the Swiss food and beverage giant.
Vevey-based Nestlé saw group revenues fall 1.8% to CHF 91.3bn ($10.1bn) during the 12 months ended 31 December 2024. Net profits declined 3% to CHF 10.8bn ($12bn) amid high inflation, intense price competition and ‘consumer hesitancy towards global brands linked to geopolitical tensions’.
Nestlé is banking on its portfolio of leading coffee brands to lead a turnaround in 2025 after its coffee segment reported mid-single-digit growth across all regions last year.
Nescafé instant coffee and Starbucks ready-to-drink (RTD) products were key performers in North America and Europe, Nestlé’s largest geographic reporting segments by sales, while Nescafé Dolce Gusto and RTD coffee products drove coffee segment sales growth in Asia, Oceania and Africa (AOA), Latin America and Greater China.
Nespresso, Nestlé’s coffee pod division, posted 0.1% year-on-year sales growth to CHF 6.4bn ($7.1bn), driven by robust fourth quarter revenues. Nestlé said Nespresso grew market share in the US amid higher sales of its Vertuo and Momento machines but posted flat growth in Europe.
“In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024 in line with our latest guidance. Increasing investment to drive growth is central to our plan,” said Nestlé CEO Laurent Freixe.
Nestle faces a balancing act in 2025 as it attempts to minimise price rises while grappling with record coffee and cocoa prices, as well as an in-house cost efficiency drive.
“We are not immune to the price of coffee, far from it,” said David Rennie, Head of Nestlé Coffee Brands, at an investor event in November 2024. Having jumped by up to 80% in 2024, the C price for arabica hit a record high $4.29 on 11 February 2025. The price of robusta, primarily used in instant coffee, almost doubled in 2024 leading to fears, which will likely compel many brands to raise retail prices and reduce package sizes.
In November 2025, Nestlé outlined a three-year ‘Fuel for Growth’ cost reduction programme to deliver savings of at least CHF 2.5bn ($2.7bn) by the end of 2027 to fund increased investments.
In commentary accompanying its full-year results, Nestlé said it will increase advertising and marketing spend from 8% to 9% of sales by the end of 2025 while optimising investments in its largest global brands.
As part of this strategy, the Swiss food and beverage giant will seek to add new markets for its Nescafé and Starbucks RTD products, with a Nescafé RTD launch in Brazil underway and plans to launch Starbucks-branded retail coffee products in India already being explored.
Nestlé is also addressing underachieving categories and has developed action plans for 18 key underperforming business cells, which collectively represent 21% of sales. Led by a reorganisation of its waters business to operates as a standalone business, changes will also see Nestlé target higher Nespresso sales in Europe.