Nestlé bets on cat food to claw back growth momentum

SWITZERLAND – Nestlé is sharpening its focus on the cat food market as part of efforts to revive growth in its struggling pet care division and drive overall business momentum. 

The Swiss food giant unveiled the strategy during its nine-month and third-quarter earnings call, alongside plans to cut 16,000 jobs globally over the next two years to reduce costs and boost efficiency. 

For the third quarter ending Sept. 30, Nestlé’s Pet Care segment reported net sales of US$5.47 billion, down from US$5.73 billion during the same period last year. 

Real internal growth (RIG) stood at 1.3%, with organic growth at just 0.9%. Over nine months, sales reached US$17.07 billion, compared to US$17.62 billion in 2024, a drop the company attributed to a general category slowdown.

Nestlé said growth was led by wet and dry cat food, partly offset by a weaker performance in dry dog nutrition. 

“In pet generally, we think the fundamentals of the category are really strong,” said Philipp Navratil, chief executive officer of Nestlé, during the Oct. 16 call. “We see that the number of pets is increasing and pets are more and more treated like members of the family.”

CFO Anna Mantz added that the Pet Care business remains “sluggish but stable,” noting that Nestlé is “focused on accelerating category growth through innovation, and investment in fast-growing areas, such as therapeutic diets and supplements.”

Regional shifts and opportunities

Across regions, performance varied. In the Americas, pet care growth was positive, led by Latin America and cat food sales, while the dog segment lagged. 

In Europe, pet care grew by mid-single digits, supported by strong demand for Felix, Purina Pro Plan, and Purina ONE brands. 

Mantz attributed Europe’s success to the region’s “cat-skewed market,” saying, “We are benefiting from the category momentum, and, actually, we’re driving the category momentum, because we are innovating well into that category and the innovations are performing strongly.”

However, in the United States, the company is facing slower growth, with stronger performance in cat food and weaker momentum in dog products. 

Mantz explained that Nestlé is currently constrained by limited capacity in wet cat food production but noted that additional capacity is expected to come online in the third quarter to help the company capitalize on the growing demand.

In Asia, Oceania, and Africa, pet care posted a decline, driven by weakness in Greater China and developed markets, though emerging markets recorded double-digit growth.

Cost-cutting and the road ahead

Nestlé’s overall third-quarter sales fell to US$27.20 billion, compared with US$27.78 billion a year earlier. Over the nine months, total sales dropped 1.9% year over year to US$82.78 billion.

As part of its turnaround plan, the company aims to save US$3.77 billion by 2027 through process automation, operational efficiency, and workforce reduction. 

The planned layoffs include about 12,000 white-collar workers and 4,000 staff in manufacturing and supply chain functions, with expected annual cost savings of US$1.26 billion by the end of 2027.

“The world is changing, and Nestlé needs to change faster,” Navratil said. “This will include making hard but necessary decisions to reduce headcount over the next two years… The actions we are taking will secure Nestlé’s future as a leader in our industry.”

Despite the slowdown, Nestlé remains confident that focusing on innovation and premiumization in the cat food category will help it reclaim growth. 

“Driving RIG-led growth is our number one priority,” Navratil affirmed. “We will be bolder in investing at scale and driving innovation to deliver accelerated growth and value creation.”

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