Nestlé price increases of 7.5 per cent in the first nine months of the year pushed sales growth to its highest rate in more than a decade and enabled the world’s largest foodmaker to lift guidance for the full year.
The maker of Maggi noodles, Purina pet food and Nespresso capsules said it expected full-year sales growth of 8 per cent in 2022, the higher end of the range it had previously signalled, as it pushed through steep rises in input costs to consumers’ wallets.
Like-for-like net sales growth reached 8.5 per cent in the first three quarters of 2022, its highest rate in 14 years. That brought sales to SFr69.1m ($69.3bn).
Growth was propelled by pet food as households bought Nestlé’s Purina brands for their dogs and cats despite the squeeze on their budgets from inflation.
Rises in sales volumes stalled in the third quarter, however. Sales of Nespresso capsules declined as people drank less coffee at home with the lifting of pandemic restrictions.
“If, as we expect, there is a consumer recession to come, Nestlé is coping admirably,” said James Edwardes Jones, analyst at RBC Capital Markets.
But he noted that sales of water, prepared foods and confectionery had also slowed in the third quarter, adding: “Even Nestlé, it could be argued, is starting to show early signs of tougher conditions.”