Pour one out for the Häagen-Dazs at Nestlé HQ, because the world's largest food company just published its full-year 2025 results—and disclosed that it's in advanced negotiations to sell its remaining ice cream business to its joint business partner Froneri, has begun the formal engagement process with potential partners to de-consolidate its water business, and is accelerating a planned reduction of around 16,000 roles through end-2027.
New CEO Philipp Navratil, who took over in September 2025, headlined the press release "accelerating strategic change." The numbers were actually decent, with 3.5% organic growth, and CHF 9.2 billion in free cash flow, but the structure news swamped the financials. The portfolio is being trimmed down to Coffee, Petcare, Nutrition, and Food & Snacks, with everything else either being folded in, de-consolidated, or shopped. A company that once had 200 operating companies and subsidiaries in 80 countries is consciously narrowing to a handful of global category bets.
What made this move possible?
A lot of work, over a long, long time.
In June 2000, Nestlé SA signed what was then a "much-publicized $200M contract with SAP" (plus $80M in consulting and maintenance) to install a global ERP system. They called the broader initiative GLOBE (Global Business Excellence). The idea was to take all those autonomous operating companies (all running on different systems, with different processes, in different countries) and make them all run the same way.
Nestlé USA had already tried a version of this domestically, code-named BEST (business excellence through systems technology). A backronym hates to see IT coming. The CIO at the time put it bluntly: "I took eight or nine autonomous divisions and said we are going to use common processes, systems and organization structures." It took six years and over $200 million. She compared it to what Nestlé's global parent was attempting: "They're just taking it up a notch." (Why does everything cost $200m in this category? Spending limits? Rounding?)
GLOBE took more than a decade to roll out globally. By 2005, Nestlé was presenting it to investors as a platform—not just for efficiency, but for business agility. By 2009, it was the backbone for a global shared services organization. By the early 2010s, Nestlé Business Services (NBS) was handling finance, HR, and IT across dozens of markets. Recently, they migrated to SAP S/4HANA, the current-generation version of SAP's enterprise software.
The whole arc was expensive, disruptive, and deeply unpopular with the managers who lost autonomy. (See the same CIO article. It's full of juicy detail.). And it created the conditions for what happened this week.
The Org Design Angle
It's much easier to cleanly exit a business if the underlying systems let you carve it out. Dissolvability is usually framed more narrowly, in terms of sunsetting projects or disbanding teams gracefully, but it absolutely can apply to entire business units. If your ice cream operations are entangled with your coffee operations at the data, process, and finance layer, it's hard to sell ice cream without selling everything. GLOBE, for all its pain, created modularity; it separated Nestlé's businesses into legible, portable units.
The companion pattern here is Domains, Assets & Standards. What GLOBE built was a shared standard layer: common processes, common master data, common reporting. Standardization even over Centralization: Nestlé's businesses still operated with considerable autonomy in terms of products, marketing, and local execution. What GLOBE took away was the freedom to run a different version of the books. Infrastructure can be Rule of Law for the enterprise.
Navratil is explicit about this in the FY2025 press release. Nestlé is now simplifying around "nine end-to-end business processes, such as procure-to-pay and hire-to-retire." The press release notes that while these processes are "underpinned by consistent IT infrastructure, they vary considerably market to market"—and that variation is what slows them down and limits the value of their data. Nestlé is accelerating shared services, standardizing and automating, just like GLOBE intended to do, but with a clearer logic around service design.
Is everything a Pace Layers story? Sorta! The infrastructure layer (GLOBE, SAP) moves slowly and expensively...decades of investment and pain. But that slow layer is precisely what enables the strategy layer to move fast(er). Navratil's "accelerating strategic change" is riding on infrastructure and culture built between 2000 and 2025.
What to Watch
- Whether the carve-outs are actually clean. Water is targeting deconsolidation from 2027. If shared services dependencies cause friction, we'll see it in scope creep, delay, and one-off costs.
- The Nestlé Health Science integration. NHS is being folded into Nutrition rather than sold off, with the idea of finding synergies and simplification. The CEO also is stepping down. Watch whether this is real integration or a rebranding exercise.
- The phased headcount reduction. Around 16,000 roles targeted by end-2027, including ~12,000 white-collar, tied to CHF 1B in annual savings. 20% of that CHF 1B savings target has already been delivered, ahead of schedule. How much of what remains is enabled by the shared services expansion (where you centralize first, then automate and reduce, and sometimes return to the BUs as a strategic embed...perhaps this time via software?) versus harder cuts in operating units?