The Swiss food and beverage company has reported positive revenues for its Nescafé, Starbucks and Nespresso brands during the first nine months of 2022, with product price increases offsetting rising inflation
Nestlé CEO Mark Schneider warned of further price increases as energy and labour costs rise over the next few months | Photo credit: Nestlé
Nestlé has reported its highest sales growth for 14 years, with the positive trading of its coffee brands and product price rises helping the company navigate a difficult economic climate.
Reporting on the nine months ended 30 September 2022, the Swiss food and beverage company achieved like-for-like sales growth of 8.5% to reach CHF 69.1bn ($68.9bn). As a result, Nestlé has raised its full-year sales growth guidance to 8%.
The majority, 7.5%, of the 8.5% organic growth was the result of higher pricing, with volumes increasing 1% over the period.
Nestlé reported high-single-digit sales growth for its coffee business, citing ‘positive sales developments’ for its Nescafé, Starbucks and Nespresso brands.
Sales in Nestlé Professional and Starbucks out-of-home products grew at a strong double-digit rate in North America, while Starbucks at-home products, Coffee mate and Nescafé in the region grew at a high single-digit rate.
Nestlé Professional also grew at a strong double-digit rate in Europe, but the region’s difficult economic environment was noted for the low single-digit growth for the Nescafé soluble coffee and Starbucks by Nespresso brands.
Coffee products also reported broad-based double-digit growth in Latin America, supported by Nescafé soluble coffee, Nescafé Dolce Gusto and the continued roll-out of Starbucks products. In July 2022, Nestlé opened a new Nescafé factory in Veracruz, Mexico, to meet strong consumer demand across the region.
Despite Nestlé’s like-for-like net sales growth in the period marking the company’s highest rate for 14 years, Mark Schneider, CEO of Nestlé, warned of further price increases as energy and labour costs rise over the next few months.
“The challenging economic environment is a concern for many people and is impacting their purchasing power. That's why we aim to keep products affordable and accessible while considering the interests of all our stakeholders. Our real internal growth remained resilient despite a high base of comparison and continued supply chain constraints, with limited demand elasticity. We remain confident in the strength of our brands, operational execution and underlying category dynamics which position us well for future growth," said Mark Schneider, CEO, Nestlé.
In a separate announcement, Nestlé detailed plans to acquire the Seattle’s Best Coffee brand from US coffee chain Starbucks for an undisclosed sum, adding to its packaged coffee retail presence in North America.
In October 2022, Nescafé pledged $1bn to help coffee farmers around the world transition to regenerative agriculture practices by 2030.