Nestlé has raised its full-year guidance after beating third-quarter expectations with 4.9% organic growth, driven by strong performance by its health products and pet food.
While the company previously expected organic growth of 2-3% for the year, Nestlé has now signalled the top range with full-year organic sales growth guidance of around 3%.
Strong momentum in the Americas, Nestlé Health Science and Purine PetCare helped offset a slump in the company’s out-of-home sales.
For the nine month period, Nestlé’s organic sales grew by 3.5% to CHF 61.9 billion ($68.4 billion). Sales in the Americas zone stood at CHF 25 billion ($27.6 billion), representing 5.1% organic growth.
Growth was also supported by the acceleration of Nestlé’s at-home coffee business in the third quarter, with particular demand for Starbucks products, Nespresso and Nescafé.
The Swiss giant’s vegetarian and plant-based food products witnessed strong double-digit growth, as did its Nestlé Health Science business. Dairy grew at a high single-digit rate, based on increased demand for fortified milks and home-baking products.
Meanwhile, sales of confectionery and water decreased due to their high exposure to out-of-home channels and on-the-go consumption. The maker of KitKat and Quality Street also saw its ecommerce sales grow by 47.6%, reaching 12.3% of total group sales.
According to Nestlé, its current strategic reviews – including its North American water unit and Yinlu peanut milk and canned porridge businesses in China – are fully on track, with further progress in its portfolio management made.
“We continue to develop our portfolio with speed and discipline. As an example, we are transforming Nestlé Health Science into a nutrition and health powerhouse through a combination of strong organic growth and targeted acquisitions. The recent additions of Zenpep, Vital Proteins and Aimmune Therapeutics are further steps in the expansion of our nutritional health offerings,” said Mark Schneider, Nestlé CEO.
© FoodBev Media Ltd 2020