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Nescafé and Starbucks RTD key performers in Nestlé’s challenging first quarter

Coffee outperforms wider sales decline amid slump in US demand – but Nespresso revenues fall 4%

Total Nestlé sales in the three months ending 31 March 2024 fell to CHF 22.1bn ($24.2bn) | Photo credit: Nestlé

Nestlé has reported low single-digit first quarter sales growth for its coffee segment amid a 6% fall in group revenues. 

Total sales for the Swiss food and beverage giant in the three months ending 31 March 2024 fell to CHF 22.1bn ($24.2bn) amid higher pricing and ‘soft consumer demand’ in North America. 

However, Vevey-based Nestlé reported ‘continued momentum’ for its Nescafé, licensed Starbucks and ready-to-drink (RTD) products globally, particularly in Europe, China and the Asia, Oceania, and Africa (AOA) region. 

Coffee sales fell year-on-year in North America and Latin America, which the group contributed to higher-than-expected first quarter results across both regions in 2023 and falling sales for its Coffee-mate creamer range. 

Nestlé also reported a 4% year-on-year decline in first quarter Nespresso sales to CHF 1.5bn ($1.6bn) but highlighted strong momentum for its at-home Vertuo and out-of-home Momento coffee pod machines. 

“We had expected a slow start and see a strong rebound in Real Internal Growth (RIG) in the second quarter with reliable delivery for the remainder of the year. A wide range of growth initiatives across the Group are now starting to deliver,” said Mark Schneider, CEO, Nestlé. 

From July 2024, Nespresso CEO Guillaume Le Cunff will assume the CEO role of Nestlé’s European business with Nestlé’s current Head of Coffee Strategic Business Unit Philipp Navratil taking on the leadership of Nespresso. 

In April 2024, Nestlé also announced plans to tap into growing consumer demand for premium coffee beverages in India by launching Nespresso in the south Asian country. The Swiss food and beverage giant will open the first Nespresso Boutique in Delhi later this year and will sell both at-home and professional Nespresso coffee pods and machines supported by an e-commerce channel. 

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