Nestlé: Nespresso and Kit-Kat maker hikes prices and sweetens sales growth
Share price in Kit-Kat maker Nestlé were up as the food giant beat profit expectations while hiking the price of its goods.
The Swedish packager, which owns brands such as Nespresso, Smarties Nesquik and Maggi stock cubes, reported a sales growth of 5.6 per cent to CHF23.5bn (£21.2bn) in the first leg of the year up from CHF22.2bn (£20bn).
Nestle drove prices of its goods up by 9.8 per cent in the first three months of the year – which is said reflected “significant cost inflation” – however sales volumes fell by 0.5 per cent.
In grocery stores across the UK a Kit Kat bar can cost up to £1.50 in stores such as Ocado and its popular Nescafe Gold Blend instant coffee often retails for up to £7 at Tesco.
“Nestlé delivered strong organic growth in the first quarter, as our teams worked diligently to protect volume and ensure resilient mix,” Mark Schneider, Nestlé chief executive said.
“Portfolio optimisation efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation.”
Nestlé in pizza tie up
Moreover, Nestlé said that its Purina PetCare food was the largest contributor to organic growth, while Coffee saw high single-digit growth, with “positive sales developments for Nescafé, Starbucks and Nespresso”.
Schneider continued: “We continued our portfolio management journey with the creation of a joint venture dedicated to the frozen pizza business in Europe.
“The new partnership provides the best platform to develop the full potential of this business. Following a strong start to the year, we confirm our full-year 2023 outlook and remain focused on creating value for all stakeholders”.