Coffee Service

Nestle posts strong growth for Q1 2021

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April 22, 2021

Nestle SA reported its strongest sales quarter in 10 years today for Q1 2021, boosted by coffee, home baking products and pet care, according to a Reuters report.

Sales for the quarter rose 2.1% from $20.8 billion CHF ($22.67 billion) to $21.1 billion CHF ($23 billion).

The company's 7.7% organic growth, with real internal growth of 6.4% and pricing of 1.2%, was broad-based across most geographies, supported by early signs of recovery from out-of-home channels, improved pricing and market share gains, according to an earnings release.

Nestle shares traded at $119.88 today, posting gains since reaching a late February low of $104.82.

"Our growth was fueled by disciplined execution, enhanced digital capabilities and rapid innovation, resulting in further market share gains," CEO Mark Schneider said in the press release. "Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth."

Most product categories delivered strong organic growth.

Coffee was the largest contributor to growth, fueled by strong demand for Nespresso, Nescafé and Starbucks products. Organic growth for Nespresso reached 17.1%, based on real internal growth of 16.3% and pricing of 0.8%.

Other quarter results include:

• Dairy grew at a double-digit rate, based on elevated demand for home-baking products and fortified milks.
• Prepared dishes and cooking aids posted broad-based double-digit growth, with robust momentum across most brands.
• Vegetarian and plant-based food offerings continued to see strong double-digit growth, led by Garden Gourmet.
• Confectionery grew at a double-digit rate, supported by improved growth in impulse and gifting products as well as sustained momentum in home-baking products.
• Nestlé Health Science reported high single-digit growth, reflecting increased demand for vitamins, minerals and supplements and healthy-aging products.
• Water recorded negative growth due to its high exposure to out-of-home channels.
• By channel, retail sales posted high single-digit organic growth, reflecting continued strong demand for at-home consumption.
• E-commerce sales grew by 39.6%, reaching 14.5% of total group sales.
• Full-year 2021 outlook confirmed continued increase in organic sales growth towards a mid single-digit rate.

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