Nestlé is doubling down on marketing investments, placing a stronger emphasis on digital channels, the company revealed during its 2024 earnings call on Thursday. The maker of Maggi, Nescafé, and KitKat increased its advertising and marketing spend by 40 basis points in 2024 as part of its strategy to regain lost ground in promotional investments.
Nestlé’s marketing expenses had dropped significantly in recent years, falling from 9 percent of total sales in 2019 to a low of 6.6 percent in the second half of 2022. However, the company has since reversed this trend, bringing the figure back up to 8.1 percent in 2024. Executives now aim to push this further to 9 percent by the end of 2025, maintaining a similar 40 basis-point increase in the coming year.
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Sales Growth Driven by Coffee and Confectionery
Despite rising costs, Nestlé posted stronger-than-expected sales growth in 2024, primarily fueled by price increases. However, the company cautioned that it expects profit margins to tighten in 2025.
Among product categories, confectionery sales grew at a mid-single-digit pace, driven by KitKat and other key local brands in Europe. Coffee sales also saw mid-single-digit growth, with Nescafé soluble coffee and Starbucks-branded products playing a major role. According to Nestlé, coffee was the largest contributor to growth, with Nescafé, Nespresso, and Starbucks leading the charge.
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Profit Outlook and India Performance
Under the leadership of new CEO Laurent Freixe, Nestlé expects organic sales growth in 2025 to surpass last year’s performance. However, the company has projected an underlying trading operating profit margin of 16 percent for 2025, down from
