Nestlé predicts bigger profits after coffee-fuelled growth

Nestlé has upped its growth predictions after sales were buoyed by demand for its coffee and cat foods.

The food giant saw organic growth of 8.1 per cent in the first half of the year, and raised its forecasts for the rest of 2021 to between five and six per cent. 

Sales inched up by 1.5 per cent to CHF 41.8 billion.

However, Nestlé claimed this was driven down by the appreciation of the Swiss franc against most currencies.

READ MORE: 60% of Nestlé products marked ‘unhealthy’, leak reveals

Retail and e-commerce sales increased by 7.3 per cent and 19.2 per cent respectively.

Nestlé-owned coffee brands showed “strong demand” among online shoppers, as Nespresso sales soared by 14.6 per cent to CHF 3.2 billion.

Starbucks, which this week announced plans to launch “ready-to-drink” coffees across Latin America, Southeast Asia and Oceania, saw 16.7 per cent growth.

Purina PetCare enjoyed a double-digit rise, proving the company’s most popular brand in North America.

“We have built the foundation for delivering consistent mid single-digit organic growth for years to come,” Nestlé chief executive Mark Schneider said.

“Organic growth was strong across most geographies and categories, with robust momentum in retail sales and a return to growth in out-of-home channels.”

Sales were said to grow by 6.7 per cent across “developed” markets, and 10 per cent across “emerging” markets.

Schenider added that the business continued to invest, claiming its Starbucks partnership had opened “new opportunities in a fast-growing segment”.

The news comes after Nestlé announced it would slash almost 600 jobs and close a factory in Fawdon, Newcastle.

Plans to abandon the site, which has operated since 1958, were labelled “sickening” by unions.

“Nestlé is the largest food producer in the world, with astronomical profits,” GMB national officer Ross Murdoch said.

“It can afford to treat workers right.”

Nestlé said it did not “underestimate the impact that the closure […] would have on the local area”.

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