Confectionery recorded double-digit growth, fuelled by a strong sales development for its KitKat brand, while in Asia, confectionery recorded high single-digit growth, led by Hsu Fu Chi, Hsu Fu Chi in China, which manufactures various confectionaries, biscuits, chocolates, jellies, sachima, and snacks. Nestlé’s Shark wafer chocolate bar also proved to be popular with Chinese consumers.
Coffee saw high single-digit growth, with positive sales developments across brands and channels and dairy reported high single-digit growth, led by coffee creamers and affordable fortified milks.
In developed markets, organic growth was 6.9%, led by pricing with negative RIG (Real Internal Growth). In emerging markets, organic growth was 9.0%, driven by pricing and a slightly positive RIG.
Mark Schneider, Nestlé CEO, said: “Our diversified portfolio and differentiated offerings helped us deliver strong organic growth in the first nine months of the year. Growth was driven by pricing as we continued to navigate historic inflation levels. The recovery of our volume and mix is underway. We are seeing the benefits of our portfolio optimization initiatives and increasing marketing investments behind our billionaire brands.
“These steps underpin our confidence that real internal growth, the sum of volume and mix, will turn positive in the second half of the year and again become the main driver of growth going forward.”
At the same time, Schneider commented that Nestlé has further strengthened its nutrition strategy and stepped up its efforts to guide people towards a balanced diet. He said actions include providing clear, front-of-pack portion guidance, transparency on the nutritional value of our products, and leading marketing-to-children policies.
“We also set an ambitious target to grow the sales of our more nutritious products by CHF 20-25 billion by 2030.”
Americas and Europe
In Latin America, Brazil posted strong double-digit growth, with continued momentum for confectionery, the largest growth contributor, reflecting strong demand for KitKat and key local brands as well as new product launches.
Nestlé’s North American business maintained broad-based growth across most brands and categories, despite a challenging consumer environment. Growth was driven by pricing, favourable mix as well as strong momentum in e-commerce across categories and out-of-home channels. While growth in Europe was supported by pricing, strong sales development for ecommerce and continued momentum for out-of-home channels.
SNAPSHOT
Nestlé reports nine-month sales for 2023
• Organic growth reached 7.8%, with pricing of 8.4% and real internal growth (RIG) of -0.6%. Growth was broad-based across geographies and categories.
• Total reported sales decreased by 0.4% to CHF 68.8 billion (9M-2022: CHF 69.1 billion). Foreign exchange decreased sales by 7.4%. Net acquisitions had a negative impact of 0.8%.
• Portfolio management progressing. In the third quarter, Nestlé announced an agreement to acquire a majority stake in Grupo CRM, a premium chocolate company in Brazil. Nestlé also divested Palforzia, its peanut allergy treatment business, to Stallergenes Greer.
• Full-year 2023 outlook confirmed: we expect organic sales growth between 7% and 8% and underlying trading operating profit margin between 17.0% and 17.5%. Underlying earnings per share in constant currency is expected to increase between 6% and 10%.