Swiss food and drink company Nestlé downgraded its sales outlook on Thursday for the year as it struggles to win back inflation-hit consumers that have turned to cheaper brands.
Nestlé said it expects sales growth of at least 3% for 2024, marking a downgrade from its previous projection of around 4%.
It comes as the Swiss company is trying to win back customers after high prices due to inflation has resulted in customers opting for cheaper brands.
The group said, however, that prices had come down faster than expected, prompting it to change its outlook.
“Positive real internal growth is back. We delivered improved volume and mix growth across the Group in the second quarter. Nestlé Health Science is recovering as planned and is set for a strong second half. Looking ahead to the remainder of the year, we will continue to drive RIG (real internal growth) by launching innovations that address consumer trends and growing our large iconic brands,” Mark Schneider, Nestlé CEO, commented.
“At the same time, we have seen pricing come down faster than expected. Therefore, we consider it prudent to adjust our guidance for the year, with organic sales growth now expected to be at least 3%,” Schneider added.
The company said in a press release that coffee was the largest organic growth contributor with mid single-digit growth, supported by its three leading global coffee brands Nescafé, Nespresso and Starbucks.
PetCare delivered mid single-digit growth, driven by continued momentum for sciencebased premium brands, Purina Pro Plan, Fancy Feast and Purina ONE, while sales in confectionery grew at a high single-digit rate, led by KitKat and local brands.
The company said in culinary, Maggi delivered robust growth, which was offset by frozen food in North America.
Meanwhile, its underlying trading operating profit was 7.8 billion Swiss francs (€8.17bn), in line with analyst expectations.
