Nestlé’s strategy of moving into high-growth categories appears to be paying off, as the company reported a first-quarter revenues rise of 4.3%, continuing its momentum from last year’s strong results.
Nestlé, the world’s biggest food producer, reported revenues of CHF 22.2 billion ($21.9 billion) for the quarter, while the company’s organic sales growth increased 3.4% during the period.
The company claimed that its sales were supported by growth across all product categories, and this acceleration was supported by significant growth in Brazil, its fourth-largest market, while the company “maintained good momentum” in the US and China, Nestlé’s two largest markets.
Waters experienced strong growth during the quarter, with organic sales rising 2%. In North America, growth was supported by price increases to reflect rising packaging and distribution costs, and premium brands S.Pellegrino, Perrier, and Acqua Panna achieved strong growth, with particularly strong demand for the newly-launched S.Pellegrino Essenza.
Nestlé also reiterated its intention to offload its Nestle Skin Health and Herta cold cuts and meat-based products business as part of its portfolio reshuffle, particularly as the company is focusing more on plant-based products to keep pace with changing consumers demands. As part of this strategy, Nestlé launched a plant-based burger for the European market earlier this month.
Mark Schneider, Nestlé CEO said: “We are pleased with Nestlé’s solid organic sales growth in the first quarter, building on our full-year 2018 momentum. Our increased speed, innovation for a changing world and execution focus are clearly paying off. We confirm our outlook for the year.”
To cater to the increased consumer demand for premium coffee options, Nestlé agreed to acquire the exclusive rights to Starbuck’s line of packaged coffees and teas around the world for $7.15 billion last year, and the company launched its first range of Starbucks-branded coffee items during the quarter.
“In the quarter, we announced the launch of a new range of 24 premium coffee products under the Starbucks brand. The Nestlé and Starbucks teams did an outstanding job and developed these products in just 6 months.”
© FoodBev Media Ltd 2019
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