Nestlé's vegetarian and plant-based food products grew by 40%, it revealed in its half-year results for 2020, supported by Maggi and further expansion of Garden Gourmet in Europe, despite this brand being withdrawn from the large UK market.
A spokesperson told FoodNavigator the strong growth in the non-meat category was explained by the shift in consumer habit towards scratch cooking in home amid the Covid lockdowns.
“At the moment people are rediscovering cooking at home and part of that is plant-based,” we were told. “They are cooking at home and experimenting more and looking at different options to have at home and plant-based is a big element of that.”
The results themselves were a mixed bag. Overall, it reported slower growth in the second quarter as consumer stockpiling subsided.
For its first half, it reported sales of CHF 41.2 billion, representing a 9.5% year-over-year decrease, with results largely related to the divestment of Nestlé Skin Health and the US ice cream business last year.
It cut its full-year forecast to 2-3% growth in organic sales, down from more than 3.5% previously.
Nestlé’s Europe, Middle East and North Africa (EMENA) unit recorded organic growth of 2.4% organic growth in the half-year period. The company said that an “exceptionally strong” start to the year was offset by declines in Q2 as consumer stockpiling slowed.
It also blamed the comparably poor performance of this unit in the second quarter on a sharp sales decline in the out-of-home channel, particularly for water and Nestlé Professional.
In Europe, infant nutrition decelerated to low single-digit growth, reflecting consumer destocking. Growth in confectionery turned slightly negative, following reduced demand for impulse and gifting products. Water gained market share but recorded negative growth due to a substantial sales drop in the out-of-home channel. Nestlé Professional saw a double-digit sales decline, in line with channel dynamics.
With shifting consumer habits, Nestlé has been developing solutions to meet increased demand for at-home consumption, products that support health and boost the immune system as well as affordable offerings. The company has also accelerated the development of its digital capabilities and expanded e-commerce and online communication.
Mark Schneider, Nestlé CEO, said:"COVID-19 continues to impact people around the world. We stand with all those affected and are committed to helping where we can. I would like to thank every member of the Nestlé team for their dedication and hard work in the face of incredible challenges. Our priorities remain the same; keeping our people safe, assuring continued supply of essential food and beverages to consumers and caring for our communities and business partners through financial and in-kind support.
"Nestlé has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half. These results demonstrate the agility of our business and the strength of our diversified portfolio across geographies, product categories and channels. With consumer behavior evolving faster than ever, we are adapting to this new reality by strengthening our innovation, leveraging our digital capabilities and executing with speed. Our engaged teams and their commitment to deliver business results while driving progress against our societal and environmental commitments make us a stronger company every day."
