Coffee drives growth for Nestlé in Q1 2021

Q2 quarterly reports 2023

Nestlé reported total sales of CHF 21.1 billion (about US$23 billion) for the first quarter (Q1) of 2021, a 1.3 per cent increase on the same period last year.

Foreign exchange reduced sales by 5.3 per cent due to the continued appreciation of the Swiss franc against most currencies.

Organic growth reached 7.7 per cent for Q1, with real internal growth (RIG) of 6.4 per cent and pricing of 1.2 per cent. Growth was broad-based across most geographies, supported by early signs of recovery from out-of-home channels, improved pricing and market share gains.

Coffee was the largest contributor to Nestlé’s growth, fuelled by strong demand for Nespresso, Nescafé, and Starbucks products.

“We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories,” Mark Schneider, Nestlé CEO, says.

Our growth was fueled by disciplined execution, enhanced digital capabilities and rapid innovation, resulting in further market share gains. Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth.”

Nespresso reported a sales increase of 15.6 per cent to CHF 1.6 billion (about US$1.7 billion) over Q1 2020.

The single-serve coffee capsule branch of Nestlé achieved organic growth of 17.1 per cent, based on strong RIG of 16.3 per cent and pricing of 0.8 per cent. Foreign exchange negatively impacted sales by 1.4 per cent.

Nespresso reported double-digit organic growth, reflecting continued expansion of the Vertuo system and strong demand for the Original system. Growth was fueled by continued strong momentum in e-commerce and innovation. New products included the expansion of the World Explorations range, including Buenos Aires and Shanghai, and new limited editions in the Master Origins range, and a new Master Origins offering, Nicaragua La Cumplida Refinada.

By geography, the Americas; Europe, Middle-East, and North Africa; and Asia, Oceania, and sub-Saharan Africa; all posted double-digit growth. North America was the strongest contributor to growth and continued to gain market share.

In March, Nespresso announced a CHF 117 million (about US$128 million) investment in the expansion of its Avenches production and distribution centre in Switzerland to meet growing consumer demand worldwide.

“In these challenging times, we can truly demonstrate how business can act as a force for good and help accelerate the recovery,” Schenider says.

“The development of COVID-19 vaccines has given the world hope and we are supporting the broad and equitable delivery of vaccines in the communities where we operate. Our partnership with the International Federation of the Red Cross and Red Crescent Societies is helping to get vaccines to those who need them most.”

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