Nestlé confectionery sales slump 7%

By Anna Bonar contact

- Last updated on GMT

The best results were achieved in Russia, where the sector recorded a double-digit growth.
The best results were achieved in Russia, where the sector recorded a double-digit growth.

Related tags: International cocoa organization, Sierra leone

Nestlé confectionery sales fell 7% in its nine-month results due to rising cocoa costs and declines in developed markets such as Great Britain.

In the company’s nine-month results released last week it reported a 7 % drop in confectionery sales from CHF 7.2bn ($7.6bn)  to CHF 6.7bn ($7.1bn) compared to the same period last year.

Overall sales dropped by 3.1% from CHF 68.35bn ($72.4bn) in the same period last year to CHF 66.2bn ($70.1bn).

Wan Ling Martello, Neslé CFO, said the real internal growth was influenced by rising pricing to compensate for currency movements as well as input costs of some commodities.

“Indeed, input costs – and especially coffee and cocoa, which are extremely relevant to Europe – will continue to have their impact,”​ she said.

The average daily cocoa price in September 2014 was 23% higher than the same month last year at $3,220, according to figures from the International Cocoa Organization (ICCO).

Mixed results around the world 
 
Great Britain continued to see a decline in confectionery category, according to Martello.

Nestlé also reported some negative impact from its earlier rise of wholesale confectionery prices.

“Pricing, mainly in Latin America reflected the general economic environment and had an impact on real internal growth as expected,”​ said Martello.

On the other hand, the company had double digit growth with Kit Kat in a highly competitive confectionery category in Brazil.

Confectionery, Nestlé’s second smallest category, grew well in Middle East and Africa, helping to compensate for slower businesses in China and Oceania.

“I’m also happy to report that Kit Kat in Japan continued its growth momentum despite very tough comps to last year,”​ Martello added.

In North America the business benefited from innovations such as Butterfinger Cups in the confectionery category.

The best results were however achieved in Russia, where the sector recorded a double-digit growth.

Paul Bulcke Nestle
Paul Bulcke, Nestlé CEO

'High alert’ on Ebola

Paul Bulcke, Nestlé CEO, said that Nestlé did not have operations in the countries worst affected by Ebola (Sierra Leone, Liberia and Guinea). He said Nestlé was on "high alert" for an outbreak in the wider African region, but said the company's cocoa supply was covered.

In a recent statement, the ICCO downplayed the impact of Ebola on the global cocoa supply.

Regarding the impact of Ebola on the international cocoa sector, it is noted that harvesting and shipping of cocoa in Guinea, Liberia and Sierra Leone have been seriously curtailed. However, combined cocoa production in these three countries represents about 0.7% of global output and is likely to have a minor bearing on the global cocoa market.”

Related topics: Manufacturers, Cocoa & Sugar, Nestle

Related news

1 comment

Heraeus UK Carbon Infrared for high quality chocolates

Posted by Ray Baird,

Carbon infrared mould heating systems from Heraeus Noblelight are helping a well-known, specialist chocolatier to
maintain the high quality of their premium chocolate products, as well providing significant savings in space and energy
costs.
The production of moulded chocolate involves depositing liquid chocolate into suitable polycarbonate moulds. However,
it is important that the moulds are pre-heated to a specific temperature before the chocolate is deposited. If the moulds
are too warm, the chocolate can change its characteristics and de-temper, as it is deposited, and if they are too cold,
they will set to quickly, loose shape and possibly crack.
Previously, mould heating on the three moulding plants had been carried out by long wave, infrared ceramic and metal
element heaters. However, these were proving increasingly energy-inefficient, difficult to control and the growing
brittleness of the ceramics was starting cause safety issues.
In an effort to solve these problems, the company contacted Heraeus because of the company’s acknowledged
expertise in infrared in general and chocolate mould heating in particular. As a result, PID-controlled carbon infrared
heating systems have been installed on all three moulding machines. Two of these machines run at around 2.5 m/min
(12 moulds / minute) while the third runs at 3.5 m/min (also 12 moulds / minute). All three machines feature a pyrometer
which regulates the energy of the infrared emitters to ensure that all mould temperatures are around 30ºC when filling
takes place.
The installation has proved particularly successful, providing better temperature control of the process and achieving
energy savings of around 60%.
Features
depositing liquid chocolate into suitable
polycarbonate moulds
temperature has to be around 30°C
when filling takes place
better quality control
energy savings of around 60%
Technical Data
carbon medium wave infrared system
pyrometer-controlled
2.5 or 3.5 meters per minute
(12 moulds per minute
Ray Baird
Internal Engineer


Heraeus Noblelight Ltd
Unit 1 Millennium Court
Clayhill Industrial Estate
Buildwas Road
Neston
Cheshire
CH64 3UZ

Tel 0151 353 2710.
Tel 0151 353 2716 (direct)
Fax 0151 353 2719.

Report abuse