Coffee drags Nestle to strongest quarter in a decade

Photo: EPA

Food and beverage giant Nestle announced it had posted record sales in the first quarter of 2021, driven by a surge in demand for coffee, pet care and dairy products, Reuters reported. This is the strongest quarterly sales growth in 10 years. Nestle cruised through pandemic with positive financial results as people in lockdowns worldwide consumed larger volumes of packed products. It also expanded sold volumes of healthcare and cosmetics products on the back of rising online sales.

"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," Chief Executive Mark Schneider said in the statement and added that he expects an increase in organic sales growth this year versus the 3.6% achieved in 2020.

Organic sales rose 7.7% in the first quarter, versus 4.3% in the year-ago period, Nestle said, easily beating a forecast for 3.3% organic growth in a company-compiled consensus. Organic growth stood at 7.2% in the Americas, at 4.4% in Europe and at 9.1% in Asia, Nestle said. Asia was in negative territory in the year-ago period as the pandemic hit there first. In terms of categories, pet care was up 8.7%, powdered and liquid beverages including coffee rose 9.9%, and dairy increased 15.7%. Nutrition and health science fell 0.5%, dragged down by nutrition. Nestle said it had made further progress on portfolio development as it wants to offer more health and wellness foods and get rid of underperforming businesses. It recently sold its North American water brands to One Rock Capital Partners for $4.3 billion and offloaded its Yinlu peanut milk business in China to Food Wise Co Ltd.

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