Nestle’s confectionery business in Canada gets double-digit growth » strategy

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nestle

Nestlé’s is reporting its Canadian sales moved up to $1.25 billion from $1.085 from January to June, compared with the same period in 2021, driven by its confectionery business.

Nestlé, the world’s largest food and beverage maker, is reporting confectionery in Canada saw double-digit growth, supported by new product launches.

The Swiss-based company is also reporting that, globally, its marketing/admin expenses as a percentage of sales decreased compared with the same period last year, supported by sales growth leverage and disciplined cost control. Marketing spend “decreased temporarily,” from $8,625 to $8,465 billion “following a lower level of promotion and marketing activities in the context of supply chain constraints.”

Globally, the CPG prices hiked by 6.5% to reflect “unprecedented cost inflation.”

Nestlé’s organic growth was 8.1% overall, and it posted 9.6% organic growth in North America. Purina PetCare – including premium brands such as Fancy Feast – posted “strong double digit growth” in North America.

In North America, sales in Nestlé Professional and Starbucks out-of-home products grew at a strong double-digit rate. The beverages category, including Starbucks at-home products, Coffee Mate and Nescafé, saw mid single-digit growth, following a high base of comparison in 2021.

North American sales in premium water grew at a double-digit rate, with strong momentum for S.Pellegrino and Perrier, while Infant formula recorded strong growth, following supply shortages.

Frozen food reported low single-digit growth, impacted by a high base of comparison in 2021 for frozen meals, and DiGiorno saw solid demand.

Kraft Heinz

Kraft Heinz is reporting net sales of $6.55 billion, topping Wall Street expectations of $6.39 billion, as gross profit margins slipped thanks to inflationary pressures.

The maker of Classico, Philadelphia Cream Cheese and Velveeta reported Q2 net income of $265 million after reporting a loss in the same period a year earlier.

The company also raised its forecast for 2022 growth in organic net sales, saying it now expects a percentage increase in the high single digits, compared with the anticipated mid-single-digit gain.

Kraft Heinz reiterated that it’s benefiting from having a range of products across the pricing ladder, so that consumers have options while staying within the portfolio, for example KD and Deluxe Mac and Cheese, and Velveeta being very competitive price-wise with private label. The CPG also claims it’s been doing very well in club and dollar channels.

Kraft Heinz is reporting strong demand across retail and foodservice channels, the latter CEO Miguel Patricio conceded that pre-pandemic, it was a very transactional area for the company, but not really a strategic one.

However, as Rafael Oliveira, international zone president for Kraft Heinz noted, it’s innovating products and developing recipes or LTOs to put in global QSRs, which is a “fantastic channel to build brand impressions.” According to Oliveira, Foodservice “is a core pillar for our growth across International, but in the US as well.”

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