Out-of-home channels sector contributes to Nestlé’s organic growth

In a statement to the media, the confectionery giant said following these positive results it expects full-year organic sales growth between 5 to 6 % in its updated full-year outlook.

Confectionery recorded double-digit growth, supported by a strong sales development in impulse products and the global popularity of the KitKat brand.

Nestlé’s vegetarian and plant-based portfolio continues to see strong double-digit growth, led by its vegetarian food brand, Garden Gourmet. Dairy reported high single-digit growth, led by fortified milks, coffee creamers and ice cream.

The Swiss-based conglomerate reported a total sales increase of 1.5%, to CHF 41.8 billion ($46bn). Foreign exchange reduced sales by 3.5%, reflecting the impact of the Swiss franc’s appreciation against most currencies and the negative impact of asset sales.

“Organic growth was strong across most geographies and categories, with robust momentum in retail sales and a return to growth in out-of-home channels​,” said Mark Schneider, Nestlé CEO.

“Through fast-paced innovation, strong brand support, increased digitalisation and stringent portfolio management we have built the foundation for delivering consistent mid single-digit organic growth for years to come​.”

By product category, the largest contributor to organic growth was coffee, fuelled by strong demand for its three main brands: Nescafé, Nespresso and Starbucks. Starbucks products posted 16.7% growth, with sales reaching CHF 1.4bn ($1.5bn) across 79 markets.

Nestlé and Starbucks recently strengthened their collaboration to bring ready-to-drink coffee beverages to select markets across South-East Asia, Oceania and Latin America.

“The expansion of our partnership with Starbucks into ready-to-drink coffee will open new opportunities in a fast-growing segment. Our portfolio choices, strong execution and decisive actions on sustainability enable us to create value for all stakeholders," ​said Schneider.