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Nestle sales accelerate as pandemic boosts pet food demand

Published 18 Feb,2021 via Bloomberg Markets - Nestle SA, the world’s largest food company, reported its fastest sales growth in five years as stuck-at-home consumers adopted more cats and dogs, boosting demand for pet food.

Revenue growth may cross the threshold of 4% and should at least match last year’s 3.6% pace, on an adjusted basis,Chief Executive Officer Mark Schneider told journalists Thursday. Analysts have forecast 3.9% growth.

Schneider is trying to deliver on his promise to reach his target for growth of about 4% after the pandemic forced the company to delay the goal, originally set for 2020.

Last year’s revenue was just ahead of analysts’ expectations. Pet food surged 10%, the star performer. Meanwhile, Nestle has been struggling to get sales of chocolate and beverages to accelerate, and revenue has declined in China, the company’s second-largest market, on weaker demand for infant formula and because of the timing of new year celebrations.

Bottled water revenue plunged 7%, suffering from lockdowns and social-distancing measures around the world. That underlines why Nestle agreed to sell its U.S. bottled-water business to private equity firm One Rock Capital Partners for $4.3 billion earlier this week. Nestle plans to focus on faster-growing premium water brands like Perrier and San Pellegrino.

Nestle will put more emphasis on acquisitions, though it would be wrong to declare an end to potential divestments, Schneider also said.

Nespresso sales rose 7%, reaching 5.9 billion francs ($6.6 billion), Nestle said, adding that it’s going to start publishing separate figures for the brand again.

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Corinne Gretler