Most corporate restructurings begin defensively after growth slows, margins compress, or investors lose patience. Nestlé’s mattered because it began before any of that happened. 

1. Restructuring From a Position of Strength 

In 2017, Nestlé was already the world’s largest food and beverage company, with CHF 89 billion in revenue, nearly 2,000 brands, and a global footprint. It was performing well. 

But when Mark Schneider became CEO, he saw that “performing well” was not the same as being well positioned. Nestlé’s portfolio had grown broad and difficult to manage, just as consumer preferences were shifting away from many traditional processed products. 

Activist investor Dan Loeb of Third Point was making a similar argument: Nestlé was too broad, not focused enough, and not delivering the margins its scale should have supported. 

So Nestlé began reshaping the business. 

2. Selling What No Longer Made Sense 

The first step was to stop keeping businesses simply because they had always been there. 

In 2018, Nestlé sold its U.S. confectionery business including Butterfinger, Baby Ruth, and Crunch to Ferrero for $2.8 billion. The brands remained highly recognizable, but the category offered slower growth, heavier competitive pressure, and weaker strategic alignment with Nestlé’s evolving priorities. 

Galderma was another mismatch. It operated more like a healthcare business than a food company, so Nestlé separated it and it was later listed publicly. 

For Herta charcuterie, Nestlé chose a joint venture with Casa Tarradellas, keeping a minority stake while giving up operational control. It was a reminder that exits do not always have to be all-or-nothing. 

Over six years, Nestlé divested more than $10 billion of assets, shifting capital away from slower-growth businesses and toward stronger long-term opportunities. 

 3. Buying Into Where Things Were Going 

That capital was quickly redeployed. 

The biggest move was coffee. In 2018, Nestlé paid $7.15 billion for global rights to sell Starbucks-branded products outside Starbucks stores. The logic was simple: combine one of the world’s strongest brands with Nestlé’s global distribution system. 

Pet care was another clear bet. As consumers spent more on premium pet products, Nestlé expanded Purina and added brands such as Lily’s Kitchen. 

It also moved deeper into health and nutrition through acquisitions such as Atkins Nutritionals and Vital Proteins, targeting categories with rising demand. 

Just as importantly, Nestlé funded much of this with divestment proceeds, keeping debt under control while improving portfolio quality. 

4. What Changed on the Scorecard 

Over time, the results became clear. 

Margins improved from about 15% toward Nestlé’s 18.5% target. Organic growth strengthened, and a smaller set of brands contributed a larger share of revenue. 

That also helped valuation. Diversified companies are often discounted when investors cannot clearly see the logic of the portfolio. Nestlé’s restructuring made that logic easier to understand. 

Investors responded well. 

5. What This Actually Means Beyond Nestlé 

The bigger lesson is that restructuring does not have to start in crisis. 

In fact, it is often stronger when it starts from a position of choice. 

When management is not reacting to creditors, a collapsing share price, or a board emergency, it can make better portfolio decisions. It can look more honestly at what creates value and what no longer does. 

The mechanics of restructuring are rarely the hardest part. The harder part is letting go of businesses that feel important because they are familiar or historic. 

Nestlé sold Butterfinger for exactly that reason: the capital had better uses elsewhere. 

That is what good corporate finance looks like: not complexity, but clarity. 

The best time to restructure a business is often when you still have the freedom to choose how. 

Contributor: Selvy Evelina | Financial Advisor