| Switzerland

Coffee and digital sales deliver robust 2021 results for Nestlé

Retail coffee products were the standout performers for Nestlé in 2021, with its Nescafé, Nespresso and Starbucks ranges achieving sales growth across all its international markets. Meanwhile, the Swiss food & beverage giant said it continued to see “broad market gains” from increased digitisation and e-commerce sales

A Nescafé branded café in Singapore | Photo credit: Nestlé

Reporting its full-year results for 2021, Nestlé posted group sales of $94bn, 3.3% higher than the $91bn earned in 2020. Underlying trading operating profit increased 1.4% to reach $16.4bn.
Nestlé said demand for coffee was the main contributor to organic growth across the group. Sales of Starbuck products, which Nestlé exclusively licences as part of the $7.1bn Global Coffee Alliance forged in 2018, grew 17% over the year to reach $3.4bn.
Building on the success of its partnership with the world’s largest coffee chain, Nestlé said it continued to expand the reach of Starbucks products, including the launch of branded ready-to-drink coffee beverages in new markets across South-East Asia, Oceania and Latin America.
Nestlé’s Nespresso business achieved sales of $7bn over the year, with growth driven by continued consumer adoption of its systems, particularly of the Vertuo range, continued momentum in e-commerce, and the recovery of its boutique stores and out-of-home channels.
Highlighting the ongoing recovery for hospitality businesses as Covid-19 trading restrictions ease worldwide, Nestlé said organic growth in out-of-home channels reached 24.5% – albeit from a low base due to the pandemic.
Meanwhile, e-commerce sales grew 15% to reach 14% of total group sales, with strong momentum reported in most categories, including coffee, pet food and healthcare products.
Despite robust sales and the benefits brought by increased digital sales across the world, Nestlé indicated that global supply chain challenges and rising inflation could yield further price increases for its products in the near-term.
“In 2021, we remained focused on executing our long-term strategy and stepping up growth investments, while at the same time navigating global supply chain challenges. Our organic growth was strong, with broad-based market share gains, following disciplined execution, rapid innovation, and increased digitalisation. We limited the impact of exceptional cost inflation through diligent cost management and responsible pricing,” said Nestlé CEO, Mark Schneider.
“The entire Nestlé team demonstrated exemplary perseverance and agility in a challenging environment,” Schneider added.
Looking to the year ahead, Nestlé said it anticipated organic sales growth of around 5% and an underlying trading operating profit margin of between 17% and 17.5%.
The food & beverage giant also reaffirmed its commitment to invest more than $1.4bn by 2030 to tackle child labour in cocoa production.

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