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Coffee, Dairy, Pet Care Brands Boost Nestlé's First-Quarter Performance

Nestlé has said that it expects organic sales to grow more than 3.6% this year after strong demand for coffee, dairy and pet care products boosted growth in the first quarter of its financial year.

The  food group has weathered the COVID-19 pandemic sufficiently so far as consumers locked up at home bought more packaged foods for themselves and their pets.

It also expanded e-commerce and its health science portfolio as consumers bought more online.

"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," commented chief executive Mark Schneider.

Nestlé Performance

Organic sales increased by 7.7%, versus 4.3% in the year-ago period, the maker of KitKat chocolate bars and Nescafe instant coffee said in a statement. This was ahead of a forecast for 3.3% organic growth in a company-compiled consensus.

"Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth," Schneider added.

Divisional Performance

Organic growth stood at 7.2% in the Americas, at 4.4% in Europe and at 9.1% in Asia, Nestlé said. Asia was in negative territory in the year-ago period as the pandemic hit there first.

In terms of categories, pet care was up 8.7%, powdered and liquid beverages including coffee rose 9.9%, and dairy increased 15.7%. Nutrition and health science fell 0.5%, dragged down by nutrition.

In this quarter, the company completed the acquisition of Essentia Water, a premium functional water brand in the US.

It also closed the sale of of its regional spring water brands, purified water business and beverage delivery service in the US and Canada to One Rock Capital Partners for $4.3 billion.

Looking ahead, Schneider noted that the vaccine rollout around the world has given both businesses and individuals hope that the challenges of the pandemic can soon be a thing of the past.

"Our partnership with the International Federation of the Red Cross and Red Crescent Societies is helping to get vaccines to those who need them most," he said. "In these challenging times, we can truly demonstrate how business can act as a force for good and help accelerate the recovery." [Pic:©Svetoslav Sokolov/123RF.COM]

News by Reuters edited by Donna Ahern Checkout. For more A Brands stories click here. Click subscribe to sign up for the Checkout print edition.

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