Food group Nestle plans to return up to 20 billion Swiss francs to shareholders over the next three years and reorganise its struggling waters business after organic sales growth slowed in the third quarter. 

Packaged food makers are branching out into new areas such as plant-based meat alternatives or products made from all natural ingredients to boost growth in an otherwise sluggish market. 

Nestle has followed this trend with its vegan Awesome and Incredible burgers.

Under CEO Mark Schneider, it has sold its US confectionery and skin health businesses and also polished up big brands including Nescafe. 

Its organic growth, which strips out currency swings and acquisitions, dipped to 3.7% in the third quarter from 3.9% in the second as prices for its products fell slightly, the maker of KitKat chocolate bars and Maggi noodles said.

The figure was in line with analyst forecasts in a poll compiled by the company given that the second quarter marked its fastest growth rate in three years. 

Nestle confirmed its outlook for organic sales growth of around 3.5% and an operating margin of 17.5% or above for the full year, pointing to strong momentum in the United States and its petcare business.

China reported flat growth as infant nutrition slowed and sales at its Yinlu brand fell. 

It decided to distribute up to 20 billion francs to shareholders over the period 2020 to 2022, mainly in the form of share buybacks, but special dividends were also possible. 

"Should any sizable acquisitions take place during this period, the amount of cash to be distributed to shareholders will be adjusted accordingly," Nestle said. 

In a separate statement, Nestle announced it would no longer manage its waters business, which posted weak organic growth of 0.5% for the nine-month period, as a global business. 

It will instead integrate it into its three geographical zones. Nestle's bottled water brands include Perrier and San Pellegrino.  

"This move, subject to employee consultation where required, will help utilise Nestle's strong local expertise, better respond to rapidly changing consumer preferences, accelerate profitable growth and create synergies," it said. 

Maurizio Patarnello, head of the waters business, will leave the executive board at the end of this year.

Nestle appointed Sanjay Bahadur, head of acquisitions and business development, to lead a new group strategy and business development function that should help identify internal and external growth opportunities.

Analysts said the announcement of a new buyback programme was a sign of strong brand development and cost savings gaining traction.

Elsewhere, consumer goods giant Unilever reported weaker-than-expected third quarter sales, blaming softer demand in India and a slowdown in China.