Nestlé reboot bears fruit

Nestlé reboot bears fruit

Nestlé’s net profit has jumped 42% to 10.1 billion Swiss francs (€8.89 billion), mainly due to the divestment of its US confectionery business, while the margin improved to 17.0%.

The Swiss company said it would look at options for its Herta cold cuts and meat-based products business, which is likely to be sold. A review of Nestlé’s skin health business is expected to be completed by mid-2019. The reviews are part of Nestlé’s efforts to adapt to changing consumer tastes. A stronger focus is expected on coffee, pet care, infant nutrition and bottled water as the main growth categories.

“Efforts to reboot the company appear to be bearing fruit,” commented Kepler Cheuvreux analyst Jon Cox.

Nestlé will now start selling Starbucks-branded coffee at grocery stores and online in Europe, Asia and Latin America. Following a $7.15 billion cash deal for exclusive rights to sell the US chain’s coffees and teas, Nestlé will start selling Starbucks labelled coffee beans, roast and ground coffee and single-serve capsules for its Nespresso and Nescafe Dolce Gusto coffee makers.

These will be available at grocery stores and online in 14 markets initially, including Belgium, Brazil, Britain, Chile, China, Mexico, the Netherlands, South Korea, and Spain, with more markets following later this year.

 

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