VEVEY, Switzerland — Nestlé today reported third-quarter sales growth, citing strong results in emerging markets and improving momentum in developed markets.
Organic sales rose nearly 4%, with pricing accounting for 1.1% of the gain and RIG [real internal growth] contributing 2.8%.
Demand for cat food, snacks, coffee, and frozen food were bright spots for Nestlé.
North American operations saw mid-single digit organic growth in the food, snacking and pet food categories. Frozen food sales in the US remained resilient amid the rise of weight-loss drugs. The company has been tweaking recipes to accommodate the changing flavor preferences of people using GLP-1s.
CEO Philipp Navratil said the company’s turnaround is gathering momentum. “Our execution is driving stronger growth. RIG was positive across all zones and globally managed businesses and reached 2.8% in the third quarter, continuing the performance improvement of recent quarters,” he said.
Added Navratil, “The agreement to divest our mainstream vitamins, minerals and supplements business marks another important step in focusing our portfolio where we have the strongest competitive advantage. Against a challenging external backdrop, our focus remains on delivering value, consistently executing with discipline and driving sustainable RIG-led growth across the business.”
Brands include KitKat candy bars, Fancy Feast cat food, DiGiorno pizza
Nestlé said it still sees organic sales growing 3% to 4% for the full year, with organic growth accelerating. Nestlé brands include KitKat candy bars, Fancy Feast cat food, DiGiorno frozen pizza, Nespresso coffee capsules, Perrier premium water, and Gerber baby food.
Under Navratil, the company has undertaken efforts to streamline its portfolio, including the recent agreement to sell the vitamins business, which includes brands such as Nature’s Bounty, to private equity firm Yellow Wood Partners.
Nestlé said it no longer includes its Russian business in its financial results, after the country’s government seized its operations. Operations in Russia had contributed around 2% of group sales.
