Nestlé posts double-digit adspend increase

23 February 2010

VEVEY: Nestlé, the Swiss food giant, posted a double-digit increase in its advertising expenditure last year, and plans to further heighten its investment in this area in 2010.

The owner of Nespresso and Nescafé posted sales of 107.6 billion Swiss francs ($100.1bn; €73.5bn; £64.6bn) in 2009, with like-for-like totals improving by 4.1% on an annual basis.

James Singh, its cfo, said "we started the year in a business environment of unprecedented economic turbulence which progressed to a semblance of relative calmness at the end of the year."

"We continued to increase our investment in our brands in 2009. Consumer facing marketing spend was up 10.1% in constant currencies," he added.

Overall, the organisation's marketing and administrative costs rose from 32.6% to 33.7% of sales year-on-year, partly a result of its efforts to take advantage of "lower media rates in many markets."

Singh suggested that advertising and strong new products, such as a range of "nutritional milks" aimed at elderly consumers in countries like China, had proved more important than price cuts and promotions.

"Although pricing was on a downward trend during the year, it remained positive in the fourth quarter as our efforts to engage consumers on the 'value' of our brands were successful," he stated.

"This demonstrates that 'price' was not our key tool to drive growth, so much as innovation and renovation [and] communication."

Data sourced from Nestlé; additional content by Warc staff