‘Innovation’ key to powdered and liquid beverage strength, Nestlé CFO

By Ben Bouckley

- Last updated on GMT

Related tags Coffee

Nestlé CFO Jim Sing
Nestlé CFO Jim Sing
With a nod towards strong double-digit growth in powdered and liquid beverages for 2011, Nestlé CFO Jim Singh attributed the firm’s 2011 success to innovation within the marketplace.

Announcing Nestlé’s Q4 and full-year results ending Dec 31, Paul Bulcke, Nestlé CEO, described 2011 as a “challenging year”​ and said the world’s biggest food firm did not expect 2012 to be any easier.

Nestlé posted CHF 83.6bn (€69.25bn) in sales for 2011 – organic growth of 7.5% – while net profit rose to CHF 9.5bn (+8.1%), with 13.3% growth in emerging markets and 4.3% in developed markets.

Introducing a later investor call, outgoing Nestlé CFO Jim Singh said that performance had been particularly strong in powdered and liquid beverages: CHF 18.2bn sales, 13% organic growth.

Singh said: “Powdered and liquid beverages had a really good 2011, with double-digit organic growth. All categories played their part. I’d highlight Nescafé (soluble coffee grew 12% off a base in excess of CHF 9bn), whilst the RTD variant is also performing well – double-digit in a host of emerging markets.

For instance, Nestlé’s results announcement today shows that, within Latin America, powdered beverages Nescau and Nestea achieved double-digit growth, as did Nescafé soluble coffee.

Discussing the divisions global performance, Singh said: “It’s all about innovation – whether on the retail side (with Green Blend) or the relaunch of Nescafé Gold, the continuing expansion of Dolce Gusto, or the choice of RTD offerings, and on the B2B side Viaggi and Nescafé Milano.”

He also glossed Nestlé’s portfolio of so-called ‘Billionaire Brands’, which includes beverage brands Nespresso, Nescafé, Milo, Pure Life, all of which saw growth in the 10.1%-20% range.

Singh said that Nestlé Waters (CHF 6.5bn sales) had a strong finish to the year, particularly in the US, where demand had been hit during the year by pricing: the division’s European business had a good year, with share gains in those markets that returned to growth.

Nestlé Professional (for the commercial and institutional restaurant industry) performed especially well in China, India and Brazil in food and drinks. “We continued to roll out our innovative premium and super premium beverage solutions (Nescafé Algeria, Nescafé Milano and Viaggi) to all regions," ​the company said.

Elsewhere, the Swiss firm said that its Nespresso business (which includes coffee machines) grew sales by 20% on a plus CHF 3bn sales base, with continued strong consumption in core markets, geographical expansion and product and systems innovation.

“The unique Nespresso service proposition including boutiques, e-commerce and call centres builds intimacy with our consumers, which helps reinforce our prospects for future growth,”​ the firm said.

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