Nestlé has recorded 7.7% organic sales growth in the first quarter, driven by a boost in coffee sales and a gradual recovery in out-of-home channels.
The Swiss food giant posted Q1 net sales of CHF 21.09 billion ($23.02 billion), compared to CHF 20.8 billion at the same time last year.
Coffee was the largest contributor to growth thanks to strong demand for Nespresso, Nescafé and Starbucks products. Nestlé also benefitted significantly from its dairy and pet care products.
The company’s Nespresso unit grew organically by 17.1%, reflecting the continued expansion of its Vertuo system and strong demand for its Original system. In March, Nespresso announced a $126 million investment in the expansion its Avenches production and distribution centre in Switzerland to meet growing consumer demand.
In the three months, growth was broad-based across most geographies. Sales in the Americas stood at CHF 8.24 billion ($8.99 billion), representing 7.2% organic growth led by pet food, coffee, dairy and infant nutrition.
Frozen and chilled food was the largest growth contributor in North America supported by its Stouffer’s, Lean Cuisine and Life Cuisine brands. Nestlé’s newly acquired Freshly business also posted strong growth, helped by expanded distribution.
The company witnessed a 4.4% organic sales rise in the EMENA zone to CHF 5.2 billion ($5.67 billion), with coffee and Purina PetCare as key growth drivers. Each region posted positive growth with strong momentum in Russia, Turkey, Italy and the UK.
Sales in AOA grew organically by 9.1%, with China recording double-digit growth thanks to recovery in out-of-home channels. While infant nutrition returned to positive growth in China, this was more than offset by sales declines in other markets.
Nestlé Health Science built upon a strong first quarter last year with 9.5% organic growth, reflecting increased demand for vitamins, minerals and supplements and healthy-ageing products.
Water recorded negative growth due to its high exposure to out-of-home channels. On 31 March, Nestlé completed the sale of its North American water business; following its acquisition of Essentia Water as part of its portfolio management.
“We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories. Retail sales saw solid growth and out-of-home channels saw signs of improvement,” said Nestlé CEO Mark Schneider.
Nestlé confirmed its 2021 full-year outlook, expecting a continued increase in organic sales growth towards a mid-single-digit rate.
© FoodBev Media Ltd 2020
World Beverage Innovation Awards – NOW OPEN FOR ENTRIES!
The awards celebrate excellence and innovation across the global beverage industry.
Don’t miss out on having your innovations recognised on a global scale.
Early bird deadline 11 June – enter now!