Nestlé has achieved organic growth of 4.2 per cent in the first quarter of 2014, with sales of US 23.5 billion. Growth in developed markets was at 0.6 per cent, and 8.5 per cent for emerging markets.
“Our organic growth in the first months of the year was in line with expectations and driven by volume rather than price. The continued roll-out of new products, along with good execution, sustained this growth in difficult market conditions,” said Nestlé CEO, Paul Bulcke, in a statement. Nestlé’s full-year outlook remains unchanged, with an expected organic growth of around 5 per cent.
“We will keep up the pace of innovation, while further strengthening support for our brands,” said Bulcke, in the statement.
Nespresso has maintained its strong growth momentum with additions to the permanent range of Grand Cru coffees, the launch of the new Inissia machine, new boutique openings and further geographic expansion. Nestlé reported that it experienced continued growth in all its regions of operation with 4.6 per cent growth in the Americas, 0.3 per cent growth in Europe and 7.3 per cent growth in Asia, Oceania and Africa. In North America it said that the market remained subdued and the severe weather conditions had an impact across the categories. New product launches, such as Nestlé Coffee Mate, drove performance. Nestlé performed well in Latin America, with soluble coffee a highlight in Mexico, and growth in Brazil in most categories.
Zone Europe achieved positive volume growth in a flat retail environment, with deflationary pressures keeping pricing negative.
In Western Europe, Spain and Portugal showed encouraging early signs of a recovering market, while France, Germany and the UK had a slower start to the year.
In Central and Eastern Europe, Russia continued to grow strongly, however the current instability and uncertainties affected the rest of the region.
In what remains a mixed and volatile economic environment across the Zone, Nestlé successfully launched Nescafé 3 in 1, delivering double-digit growth for the soluble coffee.
Nestlé expects to perform better in the second half of the year. It expects to outperform the market, with organic growth around 5 per cent and improvements in some margins.