Nestlé released its 2024 financial results earlier this month and the numbers show the positive impact its chocolate business has had on organic growth.
Organic growth reached 2.2%, with a return to positive real internal growth of 0.8%, which increased during the second half of the year.
“In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024, in line with our latest guidance,” said Laurent Freixe, CEO of Nestlé.
Confectionery creates cash
Nestlé’s confectionery business was a leading sector behind its growth, led by emerging markets and surges in the brand’s European presence.
Sales in the financial year 2024 reached €9m compared to €8.6m the previous year, achieving organic growth of 6.2%.
Free cash flow improved to €11.4bn in 2024, and the Board is proposing raising the dividend per share to €3.7. Nestlé’s goal is to accelerate performance and transform its wider food and beverage business for the future.
Spearheading its future confectionery investment plans, Nestlé has developed its new €2.7bn, three-year cost savings programme. The global chocolatier has generated over €319m of these savings in 2025.
While there is macroeconomic uncertainty, we have lots of opportunities ahead of us
Laurent Freixe, Nestlé
“From 2025, we expect our actions to drive an improvement in organic sales growth, with a lower underlying trading operating profit margin in the short term as we invest for growth,” says Freixe. “While there is macroeconomic uncertainty, we have lots of opportunities ahead of us, and we have the strategy, the resources and the people and team to deliver.”
The confectionery sector is a core product category, driving the sector’s double-digit pace. Toll House baking products and pricing actions were strong influences behind the company’s organic growth, particularly in the second half of 2024.
Geographical markets’ success varies significantly
Nestlé’s 2024 financial results show there are several key global markets driving organic confectionery growth, and losses, too.
Europe experienced market share losses
Growth in Europe was broad, across the company’s product portfolio, and improved market trends in various categories. Pricing primarily dictated growth, mirroring the inflation hikes in the confectionery space. However, while confectionery helped Nestlé recover in the fourth quarter, following temporary delistings in the third quarter, the confectionery sector experienced market share losses.
Despite the European market experiencing a slump, confectionery sales grew at a mid-single-digit pace, with KitKat and other local brands behind the popularity of Nestlé’s product portfolio.
Price increases spurred Latin American growth
Pricing also pushed growth in the Latin American market. Higher borrowing costs, however, led to financial pressures for shoppers and weaker consumer demand. In response, Nestlé worked to lower customer inventories. Confectionery was a key market in the chocolate giant’s turnaround efforts, with Nestlé developing new price increase measures, leading to improved growth in the fourth quarter.
Profits decreased in 2024 as Nestlé put its money behind increasing its growth investments. The company acquired Grupo CRM’s confectionery business as part of this approach.
Scheduled to close at the end of 2024, Nestlé aims to, leverage Grupo CRM’s direct-to-consumer model, which sees the chocolatier operate more than 1,000 chocolate boutiques under the Kopenhagen and Brasil Cacau brands and develop its existing online presence.
Nestlé’s confectionery business model showed high single-digit growth, driven by key local brands, such as Brazilian chocolate manufacturer Garoto and new product launches in the chocolate-bakery space.
China pushed for faster innovations
Despite weaker consumer demand and significant price competition in several categories, Nestlé’s China business seemed to buck the trend, delivering positive real internal growth every quarter in 2024. Faster innovation in key categories, and modifying route-to-market and channel strategies to match the current landscape, saw China maximise its performance and achieve new growth opportunities.
As a result, China saw market share development in confectionery, with the sector growing at a mid-single-digit rate. In particular, Nestlé saw solid growth for its Chinese Hsu Fu Chi brand, which manufactures various confectionaries, including chocolates and jellies.
A push for innovation and investment
In November 2024, Nestlé announced KitKat had become the official sponsor of Formula 1 for its 2025 racing season. Marking 90 years of KitKat and 75 of F1, the collaboration will see the chocolate brand leverage on-screen, advertising and promotional opportunities. With Christmas one of the confectioners’ big five sales seasons, KitKat unveiled its new-for-2024 milk chocolate Santas, suggesting seasonality may continue to play a pivotal part in Nestlé’s 2025 strategy. Leveraging the shareable snacking trend, Nestlé‘s KitKat brand has also unveiled its new sharing bars in double chocolate, salted caramel and hazelnut.
In January 2024, Nestlé created its first KitKat using cocoa from the company’s Income Accelerator Programme in Europe. By 2030, the brand hopes to have extended to around 160,000 cocoa-farming families in Nestlé’s global cocoa supply chain, to scale its impact. By launching its first KitKat using cocoa from its programme, Nestlé aimed to connect consumers with the farmers in Nestlé’s programme and raise awareness about the sustainability of the cocoa used in the iconic bars.
While cocoa production volumes are down and costs are up, many confectionery brands decide between absorbing these costs or passing them on to consumers. In August 2024, Nestlé detailed its income accelerator programme and modified cocoa farming methods, which increased yields by almost a third (32%). Nestlé achieved these results through its pruning practices and other sustainable farming activities.
Nestlé also engaged in cross-sector collaboration to tackle climate change. In March 2024, the chocolatier announced it was teaming up with suppliers Cargill and ETG, Beyond Beans, on two new projects designed to lower and remove carbon emissions from its supply chains.
“Increasing investment to drive growth is central to our plan. This means delivering superior product taste and quality with unbeatable value, scaling our winning platforms and brands, accelerating the rollout of our innovation ‘big bets’ and addressing underperformers,” says Freixe.
