SWITZERLAND – Nestle, Swiss multinational food and drink processor and the world’s largest food company by revenue, has posted organic sales growth of 8.7% for the first half of 2023, driven by the food giant’s raised prices to cope with higher input costs.
According to the company-provided analyst, the Swiss company, which makes Kit Kat chocolate wafer bars, Nescafe coffee and Purina pet food, organic sales during the period rose beating the average estimate for 8.1% growth.
In the first half, Nestlé’s total reported sales grew 1.6% to US$53.18 billion, compared to 9.2% sales growth to US$47.42 billion in the same period last year.
Nestle said it is narrowing its full-year organic sales growth guidance does not include the impact of currency movements and acquisitions to a range of 7%-8% from a range of 6-8%.
“You always leave yourself some downside protection and, personally, I expect the organic growth more in the range of 7.5%-8%,” CEO Mark Schneider said on a call with journalists.
The owner of Milky Bar and Nescafé increased prices by 9.5% while real internal growth decreased by 0.8%, with a negative impact of around 60 basis points from portfolio optimization actions.
By product category, Purina Pet Care was again the largest contributor to organic growth. Meanwhile, sales of coffee rose at a high-single-digit rate, with positive sales developments across brands and a continued recovery for out-of-home channels.
By channel, organic growth in retail sales earlier remained strong at 8%. Meanwhile, organic growth in out-of-home channels reached 17.1%.
The business’s Europe unit recorded organic sales growth of 8.9%, supported by pricing, strong sales development for e-commerce and continued momentum for out-of-home channels.
On an organic basis, sales grew by 9.3% in Nestlé’s Zone Asia, Oceania and Africa (AOA); 11.6% in Zone Latin America; and 4.7% in Zone Greater China.
This month, Nestlé launched a variety of new products under its Nescafé brand, including the Aero golden honeycomb mocha and the Nescafé Gold Dessert Edition, a coffee collection inspired by popular desserts.
The company’s infant nutrition segment posted double-digit growth, while dairy reported high single-digit growth, with strong demand for coffee creamers and affordable fortified milk.
Confectionery recorded double-digit growth, fueled by a strong sales development for KitKat Nestlé launched a new KitKat cereal in March, and in May unveiled a new limited-edition churro-flavored KitKat.
The quarter saw Nestlé’s Health Science unit sales grow by 3.5%, compared to 6.6% in the year-ago period, with a return to positive growth for vitamins, minerals and supplements.
Earlier this year, the unit announced a US$43 million investment to expand its manufacturing facility in Eau Claire, Wisconsin.
For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.
