Nestle SA has reported a decline in global food and beverage sales since the beginning of the year, underscoring the challenges faced by the industry. Their outgoing Chief Financial Officer Francois-Xavier Roger commented, “People are consuming less, or their eating habits are changing, resulting in reduced waste or increased out-of-home dining. It’s challenging to pinpoint the exact reasons, and I don’t believe this trend will persist.”
In recent quarters, major consumer goods companies have boosted their sales through significant price hikes, often at the expense of declining sales volumes. Nestle, however, has refrained from substantial price increases since early April, according to Roger.
While US consumers have shown resilience, the conclusion of pandemic-era subsidies and savings is beginning to impact consumption, according to the CFO. Nestle’s Chinese business has not rebounded as rapidly as initially anticipated.
Roger expressed a more positive outlook for the European market, particularly in terms of energy access, which had been a concern during the previous winter. Nestle’s stock experienced a 1% decline on Thursday, contributing to a 4% decrease for the year.
Nestle, a Swiss company known for its diverse food products, including KitKats and Maggi stock cubes, has been reshaping its food portfolio with optimism that consumers will increasingly seek healthier options. The company announced an ambitious goal of increasing sales of its more nutritious products by up to 25 billion Swiss francs ($27 billion) by 2030, which represents a 50% increase compared to 2022 levels.
Roger, aged 61, who will be succeeded by Anna Manz, the finance chief of the London Stock Exchange Group.
He noted that Nestle is actively exploring potential deals including smaller acquisitions to bolster earnings growth. Additionally, the CFO mentioned that Nestle is likely to revisit its share buyback program in the coming year.
He also emphasised that Nestle’s holding in L’Oreal SA is just above 20%. Reducing the stake below that threshold would negatively impact earnings per share.