Financial results

Confectionery takes a hit in Nestlé nine-month sales for 2020; pet food, coffee and nutrition products stay strong

By Anthony Myers contact

- Last updated on GMT

The effects of COVID-19 on organic growth continued to vary, in particular by product category and sales channel, Nestlé  reported. Pic: Nestlé
The effects of COVID-19 on organic growth continued to vary, in particular by product category and sales channel, Nestlé reported. Pic: Nestlé

Related tags: Nestlé, financial results, Coronavirus

Demand for food and drinks consumed at home remained strong during lockdowns, Nestlé has reported in its nine-month sales for 2020, while sales of products including confectionery consumed out of home and on the go - about 15% of the KitKat maker's sales - fell 26.4% in the third quarter.

In a statement, Nestlé said it has raised its guidance for 2020 organic sales growth to around 3% after beating third-quarter expectations with 4.9% growth driven by strong demand for pet food, coffee and health products.

By product category, the largest contributor to growth was Purina PetCare and its science-based and premium brands Purina Pro Plan, Purina ONE and Felix. Dairy grew at a high single-digit rate, based on increased demand for fortified milks and home-baking products. Coffee posted mid-single-digit growth, fuelled by strong consumer demand for Starbucks products, Nespresso and Nescafé.

Vegetarian and plant-based food products

Prepared dishes and cooking aids reached mid single-digit growth. Vegetarian and plant-based food products delivered strong double-digit growth, supported by new product launches and continued distribution expansion. Nestlé Health Science posted double-digit growth, reflecting increased consumer demand for products that support health and the immune system.

Confectionery and water reported a sales decrease due to their high exposure to out-of-home channels, with some improvement in the third quarter, the company said in its statement.

For the first nine months of the year, Nestle’s organic sales grew by 3.5%, beating the 2.8% in a company-supplied consensus of analysts’ estimates, Reuters reported.

Nestlé had previously expected organic growth of 2-3% for this year and some analysts said the increase in forecasts was cautious as 2% growth in the final quarter would be enough to achieve it. Nestle confirmed it wanted to improve its margin.

Mark Schneider, Nestlé CEO, said: “Nestlé has remained resilient in a difficult and volatile environment. Our people have acted in a responsible and prompt manner to mitigate the impact of the global pandemic and have adapted quickly to evolving consumer needs. Strong organic growth was broad based and supported by sustained momentum in the Americas, Purina PetCare and Nestlé Health Science, as well as the acceleration of our coffee business in the third quarter.

“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.”

Group sales in Swiss francs fell 9.4% to 61.9bn Swiss francs ($68.33bn) hit by the strong Swiss franc and divestitures.

Related topics: Manufacturers, Chocolate, COVID-19, Nestle

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