Nescafé and licensed Starbucks products continue to perform strongly for the Swiss food and beverage giant across Europe, North America and China, partially offsetting another fall in Nespresso revenues
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Nescafé instant coffee and Starbucks products drove mid single-digit growth for Nestlé in Europe | Photo credit: SJ
Amid a dip in group half-year revenues, Nestlé has credited coffee as its largest organic growth contributor following strong Nescafé and licensed Starbucks and ready-to-drink (RTD) ranges sales.
The Swiss food and beverage giant reported a 2.7% fall in group sales in the six months ending 30 June 2024 to CHF 45bn ($51bn), with revenues down year-on-year in all regions except Latin America.
Vevey-based Nestlé, which also manages brands in the confectionery, pet care, dairy and baby food industries, said in a press release that it had slowed the pace of its price rises earlier than planned as consumers continue to cut back on spending. The business has adjusted its full-year sales growth outlook from 4% to 3%.
However, Nestlé’s retail packaged coffee products performed strongly in the period and achieved mid single-digit sales growth globally, despite a fall in revenues for coffee pod giant Nespresso.
Nescafé ready-to-drink (RTD) products and a new range of health-focused coffee beverages made from upcycled cascara led to high single-digit growth in Greater China, while Nescafé instant coffee and Starbucks products drove mid single-digit growth in Europe.
However, coffee segment growth was flat in North America – Nestlé’s largest market – as strong sales for Starbucks and Nescafé were offset by a decline for the brand’s coffee creamer Coffee mate.
Nespresso sales also fell 1% to CHF 3.1bn ($3.5bn) over the six months amid weak consumer demand in Europe.
The coffee pod giant, under the leadership of Philipp Navratil since July 2024, has reported a quarterly decline in year-on-year revenue since the start of 2023, with total sales falling 1.2% last year and 4.1% in the first quarter of 2024.
However, Nestlé is expecting Nespresso sales to improve following the continued rollout of its Momento professional coffee machine range, the expansion of its home compostable paper-based capsules in seven European markets and its upcoming launch in India.