| Switzerland

Nestlé makes $2.4bn from Starbucks branded coffee in nine months

Swiss food and beverage giant hails the sustained success of its prominent coffee brands around the world, including Nescafé, Nespresso and Starbucks

A Nescafé café with Starbucks branding in Singapore | Photo credit: Nestlé 


 

Nestlé has continued to enjoy strong sales of premium coffee products, notably Starbucks-branded retail packaged coffee and capsules.
 
The Swiss food and beverage giant reported nine month global sales of CHF 63.3bn ($68bn), a 2.2% increase on the same period in 2020.
 
Nestlé singled out coffee products as ‘the largest contributor’ to organic growth, with ‘strong momentum’ across its key Nescafé, Nespresso and Starbucks brands.
 
Starbucks-branded retail coffee products, which Nestlé paid the Seattle-based coffee chain $7.1bn to exclusively licence in 2018, posted 15.5% year-on-year growth over the period to reach CHF 2.2bn ($2.4bn) across 79 markets.
 
Meanwhile, the Swiss firm’s Nespresso premium coffee capsule business reported sales of CHF 4.7bn ($5bn), an 11.3% increase on the same period in 2020.
 
The results underline the sustained strong performance of premium at-home coffee products and equipment following Covid-19 lockdowns around the world.
 
Despite the positive results, Nestlé has not been immune to supply chain disruption that has gripped the world in the wake of the pandemic, with CEO Mark Schneider alluding to supply constraints and increased prices for some of its products.
 
“The relentless focus of our teams on local execution and agility enabled us to navigate input cost inflation and supply chain constraints. In the third quarter, we increased pricing in a responsible manner, while maintaining strong real internal growth. Investments in innovation, digitalisation and sustainability further supported growth by enhancing the relevance and differentiation of our offerings,” Schneider said.
 
E-commerce, another rising trend in the global coffee industry, is also playing a greater role in Nestlé’s business. The Swiss company said e-commerce sales grew 17.2% over the period, and now account for 14.1% of total group sales – with ‘strong momentum in most categories, particularly coffee’.

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