From Efficiency to Equity: Nestlé's Marketing Reset Blueprint for Every Industry
Nestlé's pivot back to marketing fundamentals is a masterclass in recognizing when operational efficiency has cannibalized brand equity—offering critical lessons for brands across every sector.
When Efficiency Kills Growth
Under former CEO Mark Schneider (2017-2024), Nestlé gutted its marketing and advertising budget and invested less in innovation during the cost-heavy COVID-19 pandemic. The repercussions continue to weigh on the Swiss company's revenue after shoppers switched to cheaper, better advertised or more innovative brands.
This isn't just a Nestlé story — it's the cautionary tale of our efficiency-obsessed era. When brands prioritize cost-cutting over customer connection, they discover that the cheapest marketing budget is often the most expensive mistake.
New CEO Laurent Freixe's solution is refreshingly bold: increasing advertising and marketing investment to 9% of sales by the end of 2025 — levels not seen since 2019. But the real lesson lies in understanding why this costly retreat became necessary and how other industries can avoid the same trap.
Strategic Implications Across Key Sectors
Consumer Packaged Goods: The Brand Equity Reckoning
Nestlé's struggles reflect a broader CPG crisis where operational efficiency has eroded brand differentiation. About 70% of Nestle's sales in the UK were of foods high in fat, salt and sugar, exposing the company to regulatory pressure and health-conscious consumer shifts that require brands to evolve beyond traditional positioning or risk losing market share to wellness-focused competitors.
Marketing Transformation Imperatives:
Purpose-Driven Positioning: Move beyond product attributes to meaningful lifestyle connections that resonate with values-conscious consumers
Health-Forward Innovation: Invest in R&D that aligns with wellness trends rather than just operational efficiency—addressing the regulatory and consumer pressure facing unhealthy product portfolios
Local Market Relevance: Counter private label growth through hyper-local brand storytelling that creates emotional connections generic brands cannot replicate
Premium Tier Development: Create higher-margin products that justify increased marketing investment and drive profitability
The Nestlé Lesson: Instead of spreading resources across hundreds of products, Freixe is betting big on just six new product innovations for 2025. Each must generate at least 100 million Swiss francs in new sales annually. This "fewer, bigger bets" strategy creates the focused growth and higher margins needed to fund the 9% marketing investment—proving that portfolio discipline enables brand building.
Technology Services: Beyond Feature Wars
While Nestlé retreated from marketing, tech companies face the opposite challenge—building emotional connections in an industry obsessed with feature comparisons.
Key Strategies:
Focus on Outcomes, Not Features: Like Nestlé's core brand strategy, emphasize what customers achieve rather than technical specifications
Invest in Long-term Brand Building: Resist quarterly pressure for immediate ROI—brand equity compounds over time like Nestlé's renewed marketing commitment
Emphasize Human Impact: As AI commoditizes technical capabilities, highlight how technology improves human experiences
Resist Constant Pivoting: Freixe wants to "fix, rather than sell" underperforming businesses—tech companies should similarly commit to strategic consistency
Financial Services: Trust Through Consistency
Nestlé's brand erosion from price hikes and reduced marketing mirrors financial services' efficiency-first approach during regulatory pressure and digital disruption.
Essential Tactics:
Maintain Marketing Investment: Nestlé last spent 9% on marketing in 2019—financial institutions that maintained brand investment through uncertainty outperformed cost-cutting competitors
Constantly Reinforce Value: Nestlé's pricing struggles prove brands must continually communicate worth, especially during economic pressure
Balance Global Scale with Local Relevance: Mirror Nestlé's geographic restructuring by building community connections alongside operational efficiency
Prioritize Lifetime Value: Focus on long-term customer relationships over quarterly acquisition metrics
Healthcare & Pharmaceuticals: Beyond Clinical Efficacy
Healthcare brands face Nestlé-style pressure to prove value while maintaining trust. The food giant's health-focused pivot offers a marketing evolution roadmap.
Critical Approaches:
Shift to Prevention Messaging: Move beyond treatment-focused communication to lifestyle and wellness narratives
Create Seamless Patient Experiences: Like Nestlé's "every life stage" approach, build cohesive brand touchpoints across the entire patient journey
Lead with Transparency: Nestlé faced criticism for opaque sustainability reporting—healthcare brands must proactively address transparency concerns before they become liabilities
Align B2B and Consumer Messaging: Ensure healthcare professional communications reinforce, rather than contradict, direct-to-consumer brand positioning
The Strategic Framework: Four Pillars of Brand Renaissance
Nestlé's transformation reveals four essential elements for any brand rebuilding growth:
1. Portfolio Discipline: Less Is More
Focus resources on your strongest brands and biggest opportunities. Concentration beats sprawl every time.
2. Counter-Cyclical Marketing Investment
Increase brand spending when competitors are cutting. Freixe's 9% marketing commitment during slow growth takes courage—and creates competitive advantage.
3. Operations Serve Brand, Not Vice Versa
Efficiency improvements must strengthen brand promises, not replace them. Make operations invisible to customers while making brand benefits obvious.
4. Authentic Leadership Drives Change
Freixe's 38-year Nestlé tenure proves transformation requires cultural credibility. External messaging without internal buy-in fails.
The Competitive Advantage of Going Basic
In our complex, data-driven marketing landscape, Nestlé's "back to basics" approach feels revolutionary. But basic means fundamental, not simple.
The Bottom Line: Nestlé's struggles were self-inflicted through eroding marketing discipline, not external forces. Freixe's strategy proves the fundamentals never change: know your customers, deliver distinctive value, never stop investing in the relationship.
Every industry faces efficiency pressures. The brands that thrive remember why customers choose them—and never stop reminding them.