Coffee gives Nestlé a boost

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Although Nestlé's turnover increased by a mere 1.5 per cent in the past six months, the Swiss company immediately raised its expectations for the full year. Thanks to coffee, keeping the teleworkers awake.

 

Online sales increase with 20 per cent

Nestlé saw its sales increase by 1.5 per cent in the first half of the year, amounting to 41.8 billion Swiss francs (38.7 billion euros). However, in organic terms, i.e. excluding acquisitions and divestments, growth was 8.1 per cent, according to the company, thanks to continued momentum in retail and a return to growth in out-of-home channels. It said Nestlé also gained market share and benefited from higher prices.

 

Interestingly, e-commerce sales grew by 19.2 per cent and reached 14.6 per cent of total group sales. Coffee was the main contributor to sales, with teleworkers exchanging the office coffee machine for Nescafé, Nespresso and Starbucks, whether it was of their own free will or not. Purina PetCare's pet food also saw double-digit growth, as did vegetarian and plant-based products. Like competitor Mondelez, Nestlé noticed consumers snacking more: sugary impulse buys soared.

 

World leader in the making?

However, much of the growth was lost due to negative exchange rate effects and the fact that Nestlé sold off several large business units. The FMCG giant recently divested its American water business and the charcuterie brand Herta. These divestments had a negative impact of 3.1 per cent. The underlying operating profit margin remained stable.

 

For the future, Nestlé expects a lot from the acquisition of The Bountiful Company, which should make Nestlé a world leader in vitamins, minerals and supplements. The expansion of the partnership with Starbucks to bring ready-to-drink coffee to supermarket shelves also opens new opportunities in a fast-growing segment, according to CEO Mark Schneider. He assumes an average single-digit growth in the coming years.