Nestlé Sees Nine-Month Sales Boosted By Coffee, Raises 2021 Guidance For Second Time

Nestlé Nigeria Celebrates 6th Batch Of Technical Training Program Graduates
Nestlé Nigeria Celebrates 6th Batch Of Technical Training Program Graduates

Nestlé has reported organic sales growth of 7.6% for its first nine months and raised its guidance for the second time this year.

In July, the Swiss food giant raised its sales guidance to 5-6% and it has now said that it expects full-year organic growth of 6-7%, after reporting “strong” organic growth in the first three quarters of the year.

For its first nine months, the company’s total reported sales stood at CHF 63.29 billion ($68.59 billion approx.), representing a 2.2% increase on last year’s CHF 61.91 billion figure.

Like its competitors, Nestlé is facing rising input costs but price increases – which accelerated to 2.1% in the third quarter – have helped to mitigate input cost inflation.

By product category, coffee was the biggest contributor to organic sales growth. The first nine months saw strong momentum for the Nescafé and Nespresso brands, as well as Starbucks products, which posted 15.5% growth, with sales reaching CHF 2.2 billion ($2.38 billion approx.) across 79 markets.

Prepared dishes and cooking aids posted high-single-digit growth, as did confectionery, while dairy and water posted mid-single-digit growth.

Meanwhile, vegetarian and plant-based food offerings saw double-digit growth, as Nestlé continued to expand its product portfolio. Earlier this month, the company announced that it was introducing vegan egg and shrimp alternatives under its Garden Gourmet brand.

Sales in Nestlé Health Science grew at a double-digit rate, reflecting strong demand for vitamins, minerals and supplements.

Meanwhile, lower birth rates in the context of the pandemic impacted infant nutrition, which posted a sales decline for the first nine months. However, in Q3, growth in infant nutrition was positive outside of China.  

By channel, retail sales saw organic growth of 6.6%, e-commerce sales grew by 17.2%, while organic growth in out-of-home channels was 22.8%.

According to Nestlé, growth was broad-based across most geographies. Nestlé’s Zone Americas unit posted organic sales growth of 8.4%, while reported sales decreased by 1.5%, reflecting the impact of foreign exchange and divestitures.

Nestlé’s Europe, Middle East and North Africa (EMENA) unit recorded organic sales growth of 7.2%, supported by product innovation and strong momentum in e-commerce and specialist channels.

Meanwhile, organic growth was 4.1% year-over-year for Nestlé’s Zone Asia, Oceania and sub-Saharan Africa (AOA) unit in the first nine months, amid a “difficult economic environment with regional lockdowns”.

“We are pleased with Nestlé’s strong organic growth in the nine months, driven by broad-based contributions from most geographies and categories,” said Nestlé CEO, Mark Schneider.

“The relentless focus of our teams on local execution and agility enabled us to navigate input cost inflation and supply chain constraints.”He added: “In the third quarter, we increased pricing in a responsible manner, while maintaining strong real internal growth”.