Nestlé is promising a hike in marketing investments “across the board.”
The company, which reports in Swiss francs (CHF), says it saw organic growth globally of 7.8%. It is promising an increase of 100 basis points in marketing spend in the second half of the year versus last year.
In prepared remarks, Mark Schneider, CEO of Nestlé, says the food and beverage company is “seeing the benefits of our portfolio optimization initiatives and increasing marketing investments behind our billionaire brands.”
Sales in ice cream grew at a mid-single-digit rate globally, led by strength in Häagen-Dazs and Drumstick in Canada.
Confectionery in Canada recorded double-digit growth, fueled by KitKat. Growth in frozen food was negative, impacted by the winding down of the frozen meals and pizza business in Canada and the company’s Delissio brand exiting the domestic market.
Organic growth was 8% in North America. Reported sales in North America, however, decreased by 0.3% to CHF 19 billion for the nine-month reporting period. The company called it a “challenging economic environment.”
North America, the CPG says, maintained broad-based growth across most brands and categories, despite a challenging consumer environment.
Growth was driven by pricing, favorable product mix as well as strong momentum in e-commerce across categories and OOH channels. The North American market share gains in pet food, soluble and portioned coffee, as well as frozen meals, Canada excepted.
By product category, Purina PetCare was the largest growth contributor to the company’s pets business. Sales for Nestlé Professional and Starbucks out-of-home continued to grow at a strong double-digit rate, led by new customer acquisition and e-commerce momentum.
The beverages category, including Starbucks products, Coffee-Mate and Nescafé, posted mid-single-digit growth.
Gerber baby food reported mid-single-digit growth, led by healthy snacking and infant cereals.
Water saw a sales decrease, as temporary capacity constraints for Perrier continued to outweigh strong growth for San Pellegrino and Acqua Panna.