Strong demand for fortified milks and coffee creamers drives dairy growth for Nestlé
In group sales, dairy reported high single-digit growth, driven by strong demand for coffee creamers and affordable fortified milks. Dairy performed well in Latin America, with infant nutrition and confectionery leading Brazil sales, which grew at a double-digit rate during the quarter. Brands including the NAN infant formula saw ‘robust’ demand, according to the company.
Continued demand for NAN and other premium infant formula offerings was also recorded in Europe, where infant nutrition posted mid single-digit growth; the category was also the largest growth contributor in Asia, Oceania and Africa, led by Lactogen.
Overall, the Group recorded organic growth of 9.3% but real internal growth (-0.5%) was impacted by capacity constraints and portfolio optimization actions. Pricing was 9.8%, reflecting cost inflation.
Across the Group, Nestlé’s Purina PetCare brand was the largest contributor to organic growth, with confectionery and infant nutrition growing at a double-digit rate and coffee seeing high single-digit growth thanks to ‘positive sales developments’ for Nescafé, Starbucks and Nespresso.
The Group confirmed a FY 2023 outlook of organic sales growth between 6-8% and underlying trading operating profit margin between 17-17.5% and underlying earnings per share in constant currency between 6-10%.
On reducing plastic use in packaging, Nestlé reported that at the end of 2022, 81.9% of its plastic packaging was designed for recycling, with the aim to reach over 95% by 2025.