Nestlé: strongest organic growth delivered in confectionery and coffee

 

According to the company, organic growth was 2.8%, in a period of fragile consumer confidence. Pricing contribution increased to 2.1% as Nestlé took pricing actions to address input cost inflation in coffee and cocoa-related categories. Despite the significant level of the increases in many markets, the actions were implemented with limited customer disruption. RIG was 0.7%, reflecting soft consumer demand and the short-term impact of consumers and customers adjusting to price increases.

By category, confectionery (+ 8.9%, sales € 2.192 bn) and coffee (+ 5.1%) were the largest organic growth contributors. This growth was pricing-led, with double-digit increases in some markets. “Our focus in these two categories is on smart pricing action to fully address input cost increases where possible, while maintaining medium-term consumer penetration. Where larger price changes were implemented, in some cases we saw a pronounced initial impact on RIG, which is easing as consumer behaviour and the competitive environment adjust and stabilize,” as reported by Nestlé. Outside confectionery and coffee, organic growth was more modest, but RIG was positive across all other reported categories.

By geography, all regions contributed to positive organic growth. In developed markets, organic growth was 1.6%, driven by RIG of 1.4% along with positive pricing. In emerging markets, organic growth was 4.5%, driven by pricing of 4.8%, with RIG slightly negative. By channel, organic growth in retail sales was 2.5%. Organic growth of out-of-home channels was 6.6%. E-commerce sales grew organically by 15.1%, reaching 20.1% of total Nestlé Group sales.