Food and beverage consumption declines

Nestlé SA reported a decline in global food and beverage sales since the beginning of the year, highlighting the challenges facing this sector.

“People consume less, eat less, waste less or eat out more. It’s hard to know. I don’t think it will last.” said outgoing CFO Francois-Xavier Roger at a conference. In recent months, large consumer products companies have managed to increase revenues through significant price increases, but have also experienced declines in sales volume. According to Roger, Nestlé has held its prices stable since the beginning of April.
According to the CFO, consumers in the United States have been resilient, but declining subsidies and savings due to the Covid-19 pandemic are beginning to have an impact on consumption. On the other hand, the Nestlé company has not achieved a rapid recovery in its business in China as expected. A company representative clarified that these statements refer to the first half of the year. According to Roger, Nestlé is more positive about the European market after having concerns about that market’s access to energy last winter.

Swiss company Nestlé, known for producing foods such as KitKats and Maggi chicken broth, is working on a revamp of its product portfolio due to growing consumer demand for healthier options. The company has set a target of increasing sales of its most nutritious products by around 25 billion Swiss francs by 2030, which would represent a 50% increase over current figures.

And at 61, Roger, who will be replaced by Anna Manz, currently chief financial officer of the London Stock Exchange Group, is confident he will leave Nestlé in good stead as he embarks on the next “exciting” career move, although what that will be has not yet been announced.

He also said that “Nestlé continues to analyze deals, but that most of the ones the company is evaluating are not must-buys.” He also said the food maker could make small acquisitions that would drive earnings growth.

He also mentioned the possibility of revising its share repurchase program in the coming year. “Nestlé is likely to review its share buyback program next year, the CFO also said. The company can finance the payment of 7 billion francs in dividends and 3 billion francs in share buybacks each year, he added. A spokesman said dividends could exceed that amount.” he remarked.