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Nestlé Posts Its Strongest Quarterly Growth In Six Years

By The Daily Upside – Oct 22, 2020 at 9:13AM

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But unlike its CPG rivals, Nestlé doesn't have any cleaning or disinfecting brands

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Halloween is a week away, but Nestlé isn't banking on Kit Kat sales to carry the day.  

The Swiss food-and-beverage giant recorded its highest quarterly sales growth in six years, even as many of its core products took a hit.

Home-Cooked Yield
Earlier this week, Procter & Gamble and Reckitt Benckiser reported stronger than expected results driven by robust demand for cleaning products such as Tide and Lysol.

Nestlé, the world's largest packaged-food maker, doesn't sell cleaning or disinfecting brands.  Nestlé reported third quarter sales growth of 4.9%, beating analyst estimates, but more tepid than the 13% and 9% seen at Reckitt and P&G, respectively. 

  • On The Go: Nestlé said products that are normally consumed "on the go" such as water bottles and Milkybars were down 25%+ and will be a drag for some time.
  • Circle Of Trust: So-called "trusted brands" and comfort foods such as DiGiorno and Stouffer's saw healthy growth. 
  • E-commerce: Online sales shot up nearly 50% for all the obvious reasons.
Shopper

Image Source: Getty Images.

Healthy Living 
In recent years, Nestlé has doubled-down its health-sciences business.

CEO Mark Schneider, who took the reigns in 2017, plans to turn the company into a "health and nutrition powerhouse" through both acquisitions and organic growth.  And he's been busy:

  • Nestlé recently announced the $2.6 billion acquisition of Aimmune Therapeutics, the first company to have an approved treatment for peanut allergies. 
  • This year Nestlé also acquired a gastrointestinal medication brand and took a majority stake in a collagen supplements company.

The Takeaway: The health and wellness trend doesn't appear to be fading anytime soon. 

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