Nestle, the maker of Nescafe, said on Wednesday that by increasing marketing and technological investments, it intends to nearly increase its e-commerce sales to 25% of its total by 2025.
Nestle CEO Mark Schneider said the company will push sales of its products directly to consumers through its own online channels, or direct to consumer, building on the success of Nespresso coffee pods and Purina PetCare, which are increasingly sold directly to consumers via Nespresso.com and Purina.co.uk.
Bernard Meunier, head of Nestle’s strategic business units and marketing and sales, said at the company’s investor meeting, “We want to take (e-commerce) sales from around 13 percent in 2020 to 25 percent by 2025.”
He noted that this will be accomplished by boosting digital marketing investment to 70% by 2025, up from 47% in 2020.
The value of the investment, which will be funded by self-financing and savings, was not disclosed by the KitKat chocolate maker. Nestle’s e-commerce efforts have not been dilutive to the company so far, according to the company.
Nestle expects total revenues of 84.34 billion Swiss francs ($90.71 billion) in 2020. In the first nine months of 2021, e-commerce sales accounted for 14.1 percent of total sales, compared to 12.8 percent in the same period of 2020.
Markets such as the United States, Europe, and China, according to Meunier, will drive e-commerce sales growth.
Big food companies are attempting to sell more of their products directly to consumers in order to collect data on shopping patterns. Also, Alphabet’s GOOGL.O and Apple Inc. Google is taking steps to prohibit marketers from tracking users’ data without their agreement, prompting businesses to look for new ways to market their products.
Instead of depending on digital agencies, the digital marketing investments will be used to hire additional people and grow the company’s in-house advertising studios.
“A lot of learning has already been done in an environment where there are no rules to follow,” Schneider said. “We are looking forward to the next phase.”
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