Nestlé Forecasts 5% Sales Growth

23 February 2009

VEVEY, Switzerland: Nestlé, the world's biggest food company, predicts it will achieve organic sales growth "approaching 5%" this year, and is expanding its range of low price brands, previously focused on Latin America and Africa, into major markets including the US and France.

As argued by Investec's Martin Deboo, discount brands and retailers are expected to be among the winners of the downturn, and to challenge the traditional dominance of big players like Nestl

The company posted an increase in underlying sales of 8.3% last year to SwFr109.9bn ($93bn; €73.8m; £65.2), and sales of its low-priced "popularly positioned products" rose 27% to SwFr5bn.

It also registered growth in all of its areas of operation except bottled water, where sales fell by 1.6%, and ceo Paul Bulcke said he does not think 2009 will be "all doom and gloom." 

He argued the company's major strength was that it offered a range of expensive and value brands, meaning consumers could “trade up and trade down” while still buying products from Nestlé's stable.

While consumer goods companies including L'Oréal, of which Nestlé owns a 30% stake, and Unilever have both recently abandoned their previous targets for this year, Nestlé's growth forecast is only slightly below its previous guidance rate of 5% to 6%.

Data sourced from Financial Times; additional content by WARC staff