Nestlé’s outlook improves, strengthening health and wellness focus to serve it well

Posted by Daniel Palmer on 23rd October 2008

Nestlé, the world’s largest food group, has announced growth of 3.4% beating forecasts and causing the Swiss-based company to enhance their full-year expectations.

The growth came as they strengthened their position as a health & wellness company, gained greater traction in key developing markets and saw premium brands increase their market share. Their food and beverages division, which includes the Milo, Nescafé, Kit-Kat and Lean Cuisine brands, was credited as the driving force behind the sales success.

“These record sales in the first 9 months reflect strong growth momentum in both the developing and the developed world,” Paul Bulcke, Nestlé CEO, said. “The Group’s brands hold leadership positions in dynamic categories and will continue to deliver profitable growth on the back of our nutrition, health and wellness strategy. Indeed, such is the strength of alignment: 280,000 Nestlé people sharing the same vision and commitment to operational excellence, selling billions of products to consumers across the world, day after day.”

“This is the driving force behind an outstanding shorter-term operational performance which, in turn, ensures the longer-term delivery of the Nestlé model: a good level of organic growth, combined with a constant currency EBIT margin improvement, year after year.”

“The Group’s success in developed markets is increasingly driven by its capacity to innovate with new added-value products and services as well as continuously renovate the existing portfolio,” a company statement added. “Moreover, the premium and luxury end of the market continues to provide strong growth, with brands such as Nespresso, Häagen Dazs and Gourmet pet food performing well.”

In developing markets it was Nestlé’s Popularly Positioned Products (PPPs), an integrated business model to reach out to emerging consumers offering them quality, taste and nutritional content at affordable prices, which spurred growth.

Nestlé anticipates successful times to continue despite the economic turmoil, with their increased focus on ‘health and wellness’ expected to hold them in good stead for the future.

“Nestlé is committed to becoming the recognized global leader in nutrition, health and wellness and the reference for sustainable financial performance in its industry. The alignment of the Group’s businesses behind this commitment will drive profitable growth both in the current environment and in the longer term, demonstrating Nestlé’s defensive qualities as well as its strong growth credentials,” the statement concluded.