Nestlé increases sales significantly – thanks in part to price increases

Nestlé logo

The food company recently increased its sales significantly.

(Photo: dpa)

Zurich The food company Nestlé continues its growth path: In the first nine months of the year Nestlé earned around 63.3 billion Swiss francs (almost 59 billion euros), as the company announced on Wednesday. That is 2.2 percent more than in the same period of the previous year.

Organic growth, which excludes company sales and exchange rate effects, increased by 7.6 percent. The company attributes 1.6 percent of the growth to price increases. Nestlé CEO Mark Schneider said: “In the third quarter we made responsible price adjustments while continuing our strong real internal growth.”

In view of the strong growth, Schneider raised the forecast for the full year. Nestlé is now aiming for organic sales growth of six to seven percent instead of five to six percent. However, the group is preparing its shareholders for slightly weaker margins of 17.5 percent. This is due, among other things, to the delayed adjustment of prices to the increased raw material costs, the company said.

The integration of The Bountiful Company’s nutritional supplement brands will also cost money. Nestlé took over the American company in March for around 5.7 billion Swiss francs. The deal has been closed since August.

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Growth was particularly strong in Nestlé’s American business, where the company was also able to increase its prices the most. In the world’s top-selling region, Nestlé grew organically by 8.4 percent, of which 3.2 percent was attributable to price increases. In Europe and Asia, however, Nestlé has raised prices by less than one percent.

However, the growth driver at Nestlé is once again the coffee brand Nespresso, which also includes Starbucks retail products. Organic growth there was eleven percent. The Purina pet food brand, as well as the vegetarian and plant-based products of the Garden Gourmet brand, also grew by double digits.

In the Nestlé Health Science division, which CEO Schneider intends to expand significantly in the future, the acquisition of The Bountiful Company resulted in a solid increase in sales of 28.5 percent. Without the vitamin supplements, however, the division stagnated.

More: Nestlé boss Mark Schneider relies entirely on healthy nutrition – but the group is growing with coffee and ice cream

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