Nestlé has reported organic growth at 2 per cent for the first nine months of 2024, with coffee being the largest growth contributor.
“We delivered organic sales growth, driven by positive real internal growth. Consumer demand has weakened in recent months and we expect the demand environment to remain soft,” says Nestlé CEO Laurent Freize.
“Given this outlook and our further actions to reduce customer inventories in the fourth quarter, we have updated our full year guidance, with organic sales growth expected to be around 2 per cent, in line with the first nine months.”
The company’s total reported sales amounted to US$77.5 billion (CHF 67.1 billion), compared with US$79.4 (CHF 68.8 billion) at the same time last year.
Overall, organic growth was 2 per cent for the nine months, similar to the 2.1 per cent achieved in the first half. Real internal growth (RIG) was 0.5 per cent, which was said to be impacted by soft consumer demand and consumer hesitancy towards global brands, linked to geopolitical tension.
Coffee was the largest growth contributor with mid single-digit growth, supported by the three leading coffee brands: Nescafé, Starbucks, and Nespresso.
In North America, organic growth was reported at -0.3 per cent, driving market share gains in coffee, with losses in coffee creamers.
Meanwhile in Europe, the company reported organic growth of 3.3 per cent, with coffee delivering mid single-digit growth, led by Nescafé soluble coffee and Starbucks products.
In Asia, Oceania and Africa, organic growth was 3.6 per cent. By product category, coffee delivered mid single-digit growth, driven by Nescafé, particularly in ready-to-drink offerings.
Organic growth in China was reported at 2.5 per cent, with the region driving market share gains in soluble coffee.
For Nespresso, organic growth was 1.8 per cent and sales in North America grew at a mid single-digit rate
with market share gains. Europe posted slightly negative growth in a market that remains competitive.
Growth in Nespresso was driven by the Vertuo system, with continued broad-based sales momentum. Out-of-home channels continued to generate growth, fuelled by the adoption of the Momento system.
As a result of the consumer environment and further actions to reduce customer inventories in the fourth quarter, Nestlé has updated its full-year guidance.
Organic sales growth is now expected to be around 2 per cent, in line with the first nine months. Underlying trading operating profit margin is expected to be at around 17 per cent. And underlying earnings per share growth in constant currency is expected to be broadly flat.
