Healthy performance for nutrition-focused Nestlé

By Catherine Boal

- Last updated on GMT

Related tags: Organic growth, Cent, Nestlé, Chocolate, Investment

In a year dominated by acquisitions and changes within its
operational structure, Switzerland-based food group Nestlé has
still exceeded expectations with full-year organic growth boosted
by the company's focus on nutrition, research and core brands.

Sales at the group rose to CHF98.5 billion (€60.5bn) while organic growth was 6.2 per cent and net profit was up 13.8 per cent to CHF9.2 billion (€5.6bn). The company spent the year shifting focus to strengthen its nutrition, health and wellness portfolio with the acquisitions of Australian cereal business Uncle Tobys, weight management company Jenny Craig and the nutrition group Novartis. In addition, Nestlé increased its marketing and administration spend by 6.3 per cent last year as well as upping its investment in research and development 16 per cent to CHF1.7 billion (€1.04bn). Chairman and CEO Peter Brabeck-Letmathe said: "We are seeing the benefits of the Group's transformation into a nutrition, health and wellness company, with stronger innovation and branding, as well as improved efficiency. "Our competitiveness was further boosted by higher spending on marketing and R&D, the roll-out of GLOBE and shared service, as well as our commitment to savings programme." ​As well as delving further into nutrition, Nestlé has been reorganising operations in its confectionery sector in order to increase profitability after lacklustre sales of some core products. The owner of the ailing Lion brand teamed up with cocoa processor Barry Callebaut last month to hand over facilities in Italy and France and, at the end of 2006, shifted production of the Smarties​ and Black Magic brands from the UK to mainland Europe while investing £20 million (€29.8m) in its York factory. With sales of CHF11.4 billion (€7bn) last year, Nestlé's chocolate, confectionery and biscuits sector had organic growth of 2.6 per cent and real internal growth of 0.5 per cent. The KitKat brand was singled out by the company as a particularly strong product worldwide and Nestlé attributed its popularity to the consumer trend towards lighter chocolate confectionery. In terms of the European market, Italy and the Iberian peninsula performed well but the UK and Germany confectionery sectors were weaker and business was down in the declining US market. ​Nestlé predicts organic growth of between 5 and 6 per cent during the coming year in spite of "continued strong input cost pressure, especially on agricultural raw materials and more investment in brands, R&D and additional capacity aimed at further accelerating the Group's transformation into a nutrition, health and wellness company."

Related news

Related products

show more

Growing Up Bioactives

Growing Up Bioactives

Glanbia Nutritionals | 13-Sep-2022 | Business Advice

Parents are prioritizing their children’s health and wellness with 66% indicating they give their child nutritional supplements once a day*. Support their...

Opportunity Alert: Mobility Matters to your Consumers

Opportunity Alert: Mobility Matters to your Consumers

NZMP (Ingredients by Fonterra) | 16-Aug-2022 | Infographic

The World Health Organization says mobility is critical for healthy ageing, as it’s a core concern seniors face. With mobility’s significant impact on...

Consumers are ditching diets for intuitive eating.

Consumers are ditching diets for intuitive eating.

Fonterra | 02-Aug-2022 | Technical / White Paper

Interest in intuitive eating is reportedly gaining as much traction with consumers as the ketogenic diet. However, without similarly strict macronutrient...

Fonterra Keeps Your Ingredients Ahead of the Curve

Fonterra Keeps Your Ingredients Ahead of the Curve

Fonterra | 26-Jul-2022 | Technical / White Paper

With health and environmental concerns in mind, consumers’ commitment to purchasing organic products continues to grow. Whether your brand is starting...

Related suppliers

Follow us

Products

View more

Webinars