Nestlé posts better than expected sales growth

Swiss-based Nestlé, the world's biggest producer of packaged food, on Friday posted better-than-expected growth in the first quarter despite currency exchange rates that hampered sales.

Nestlé posts better than expected sales growth
Photo: AFP

The company that markets Nespresso capsules, KitKat bars and Perrier water also confirmed it expected around five percent growth this year.
It said sales rose 0.5 percent to 20.9 billion francs ($21.8 billion), adding that currency exchange rates, especially the
strong Swiss franc, trimmed reported sales by 4.5 percent.
But organic sales — the benchmark of Nestle's performance — rose 4.4 percent, higher than the 4.1 percent forecast by analysts polled by the Swiss financial news service AWP.
"Our three-month sales growth was in line with expectations and driven by both real internal growth and pricing," Nestle chief Paul Bulcke said.
Sluggish 2014 sales in Asia, Africa and North America continued into the beginning of this year, a situation Bulcke pledged to rectify.
"We continued our efforts to restore momentum… and expect these initiatives to gain traction throughout the year," he said.
"Our full-year outlook is confirmed: we aim to achieve organic growth of around five percent with improvements in margins, underlying earnings per share in constant currencies and capital efficiency."

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‘Unlimited resources’: Switzerland’s Nestle goes vegan

Swiss food giant Nestle, which has made billions with dairy products, said Monday it will host start-ups that want to develop vegetarian alternatives.

'Unlimited resources': Switzerland's Nestle goes vegan

Nestle could thus find itself at the forefront of a sector that has strong growth potential, an analyst commented.

It plans to open its research and development (R&D) centre in Konolfingen, Switzerland to “start-ups, students and scientists” a statement said.

In addition to testing sustainable dairy products, the group plans to encourage work on plant-based dairy alternatives, it added.

Chief executive Mark Schneider was quoted as saying that “innovation in milk products and plant-based dairy alternatives is core to Nestle's portfolio strategy.”

The group unveiled a vegetable-based milk that had already been developed with the process, and technical director Stefan Palzer told AFP it planned to focus on 100-200 such projects a year.

Jon Cox, an analyst at Kepler Cheuvreux, noted that while Nestle had missed some consumer trends in the past, it has now “taken something of a lead in the plant-based alternative market for food”.

And “given its pretty much unlimited resources, Nestle is going to come out one of the winners in the space,” Cox forecast in an e-mail.

Nestle said that “internal, external and mixed teams” would work at the R&D centre over six-month periods.

Nestle would provide “expertise and key equipment such as small to medium-scale production equipment to facilitate the rapid upscaling of products for a test launch in a retail environment,” it added.

The Swiss food giant has long been known for its dairy products, but faced a boycott in the 1970s for allegedly discouraging mothers in developing countries from breastfeeding even though it was cheaper and more nutritious than powdered formula.

On Monday, the group's statement also underscored that the research initiative was part of its commitment to help fight global warming.

“As a company, we have set ambitious climate goals. This is part of our promise to develop products that are good for you and good for the planet,” it said.