Nomad Foods has updated its organic growth forecast for 2025, highlighting an optimistic outlook driven by innovation, increased promotional spending, and potential mergers and acquisitions (M&A).
Chief Executive Stefan Descheemaeker is confident about achieving volume growth in the upcoming fiscal year after experiencing three consecutive quarters of increases. The UK-based frozen foods manufacturer is now aiming for a 1-3% organic growth rate in 2025, which would be an improvement from the 1% reported for 2024.
In terms of financial performance, adjusted EBITDA for the upcoming year is projected to be slightly lower than the prior year, estimated at 2-4%, compared to the 5% achieved in the last 12 months. Investment efforts will primarily focus on Nomad Foods’ key brands and categories, referred to as the Must Win Battles, where the company seeks to enhance market share and competitiveness.
According to Descheemaeker, the Must Win Battles represent nearly 50% of sales, amounting to €3.1 billion ($3.3 billion) in 2024, despite a 0.3% decline in price/mix, paired with a 1.3% increase in volume. During the fourth quarter, these figures became more pronounced, showing a 1.6% decrease in price/mix and a 4.7% rise in volume.
Descheemaeker emphasized the importance of these Must Win Battles to the company’s success and noted, “While our focus remains on our Must Win Battles, we have also begun strategically investing in select growth platforms.” These platforms target markets where Nomad can leverage its existing capabilities to expand more effectively.
Looking ahead, advertising and promotional spending (A&P) is anticipated to exceed sales growth once more in the new year. This follows a 4% rate in 2024 and a remarkable 14% in 2023. Descheemaeker explained that innovation rates have improved from 4.2% in 2023 to 4.8% in 2024, with expectations to surpass 5% in 2025. By combining innovation with product renovation, the renewal rate—indicating sales from new or refreshed products—could double from high-single digits in 2024 to the mid-to-high teens by 2025.
While Descheemaeker did not commit fully to acquisitions this year, he remains open to potential deals, particularly smaller transactions as valuation discrepancies between buyers and sellers narrow. He remarked, “We keep buying back shares, which is the best acquisitions we can do. At the same time, we see some opportunities, perhaps less visible ones, in our category—new sub-categories in certain countries where we have significant synergies. This is the type of avenue we are increasingly considering.”
Nomad Foods’ Chief Financial Officer Ruben Baldew, who has been with the company for about eight months, noted that while inflation has shown signs of easing recently, pricing adjustments may still be necessary to counter potential challenges. Additionally, he downplayed any significant impact from recent tariffs imposed by the Trump administration on imports into the U.S. He clarified, “We don’t export into the U.S., and outside of fish, we don’t import ingredients from the U.S. We don’t expect a major impact from tariffs. The significant point is that we do not foresee substantial repercussions from retaliation in the form of tariffs.”
In a rapidly evolving food and beverage industry, Nomad Foods is strategically positioning itself to harness opportunities in the food and drink business while navigating consumer trends and challenges. By focusing on innovation and strategic investments, the company aims to maintain a competitive edge in the dynamic marketplace.
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This proactive approach will help Nomad Foods effectively adapt to emerging food and beverage industry trends while potentially driving growth through increased market share and innovative product offerings.
