Nestlé's center of scale, content studios drive ecommerce efficiency

Nestlé's annual report outlines steps for ecommerce to reach 25% of sales by 2025.

a jar of coffee beans sitting on top of a pile of coffee beans
Photo by Prasann Tank on Unsplash

In 2022, 15.8% of Nestlé's sales came through ecommerce. By 2025, the world's largest food company wants to increase that share to 25%.

While the annual results tell a story, the company's recently-released annual report makes clear that it is the activities taking place across teams and technology that will ultimately push it toward that goal. In 2022, the Gerber and Purina owner prioritized building skills on its teams, focusing on digital shelf execution and advancing analytics.

The report illustrates a balance that the company is striking on the path to its 2025 goal: It is aiming to drive growth of sales across digital channels, while at the same time increasing efficiency in the operations that drive them.

Here are takeaways on this progress in ecommerce from Nestlé’s recently-released 2022 annual report:

Building community

Nestlé is working to build digital skills across the organization. To advance this effort, the Gerber and Purina owner created a global community of 3,000 employees who connect to share best practices, and even challenges. Webinars and trainings have reached 11,000 people across the company.

Perfect shelf execution

Nestlé’s vision for the digital shelf is called “Perfect Shelf Execution.” It measures by market and retailer, and down to the SKU level. With a standardized approach in place, Nestlé said it is able to improve the text, content, ratings and reviews that are major ingredients of success on ecommerce platforms.

Retail media

Nestlé is working to advance retail media, which is a fast-growing form of advertising that places advertising on ecommerce marketplaces, close to the point of purchase. With retail partners, Nestlé is focusing on both how teams work, and driving return on investment.

Amazon center of scale

As channels expand, Nestlé is also creating ways to do “more with less,” the report states. With Amazon, the company created a center of scale, in which the team outsources and automates routine tasks so that teams can focus on tasks that provide the most value.

Analytics are ‘critical’

The ability to use data to gain deeper insight into operations and make changes quickly is of growing importance to businesses. In 2022, expanding this capability was especially important to Nestlé as it navigated “an extremely volatile retail environment and rising costs of raw materials,” the report states.

Nestlé’s analytics activities include a strategic revenue management program, which now covers 95% of its markets. It is also tapping AI and end-to-end analytics on collaboration with customers, product assortment and promotions.

In marketing, the company is investing in proprietary solutions that are being deployed to increase effectiveness of marketing investment.

Nestlé also recently launched a data science hub in Bangalore to track return on investment and predict scenarios for particular channel strategies.

More efficient content

Nestlé said 55% of its media spend is directed to digital platforms. With this, the company has worked to build a more efficient model for creating and optimizing content that is tailored to each platform.

As a result of work to build out this model in 2022, Nestlé now has 37 content studios operating, and has reduced creation costs by 50%.

The company is also using AI to track and adjust the relevance of more than 500,000 digital assets across digital platforms. This produced a 66% improvement in return on ad spend on Meta-owned Facebook and Instagram.

Online recipes

The report highlighted one example of how Nestlé is reaching consumers with content that can be put to use as people prepare products from the company. Online recipe platforms are reaching more than 100 million consumers annually in Latin America.

Receitas Nestle features 20,000 recipes, tutorials and a feature that allows consumers to ask chefs questions. Working with retailers, Nestlé is also driving customers toward shoppable recipes that allow consumers to order ingredients that arrive at their home.

In Brazil, the platform helped to drive a 30% frequency increase in consumption of Nestlé products.

It's an example of how digital commerce can take familiar forms of content, create a more interactive experience, ease the path to a sale. When they enjoy this process, consumers are more likely to seek out recipes again and again.

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