Sort by
Sort by

Nestlé Annual Report 2020: Internal growth reached 3.6% worldwide and 5.5% in the Baltics

Nestle annual report

Nestlé, the world's largest food and beverage company, has published its 2020 annual report summarising its financial results and providing an insight into 2021.

Despite the problems caused by COVID-19 for all companies last year, Nestlé achieved significant results, achieving an improvement in internal sales growth, profitability and capital efficiency for the third year in a row. Internal growth reached 3.6% worldwide and was the highest in the last five years. Growth was driven by investment in growing areas such as plant food, coffee and nutrition science.

In this difficult year Nestlé Baltics also exceeded its forecasts with an internal growth of 5.5% compared to 2019.

The main drivers of Nestlé's growth are consumer-oriented innovations, which also seek to reduce the company's environmental impact, such as Maggi broth paper packaging and plant food, as well as the continuous digital transformation: the growth of e-commerce, creating value through the use of analytics, digitisation of activity and increased digital skills of employees. For example, in 2020 Nestlé's e-commerce sales accounted for 12.8% of sales and grew by 48.4%. In addition, more than 60% of all the company's campaigns in digital media took a data-driven and audience-oriented approach to personalize the message to consumers. These trends, together with an increased focus on creating a common long-term value that contributes to society and protects the environment, continue in 2021.

The emphasis on pets and cooking at home

Jeļena Vorkovica, finance manager at Nestlé Baltics, says that despite the fact that 2020 turned out to be a difficult year, it was financially stable.

"The biggest drivers of growth were home-use goods such as coffee and cocoa, pet food, cooking ingredients." Nestlé Baltics" sales dynamics directly reflected changes in the buyer environment and the new reality, in which people spent much more time cooking at home, enjoying cozy hot chocolate rituals and pampering pets," she says.

According to J. Vorkovica, at the same time consumption of goods of the category of impulse purchases decreased sharply. Calls to stay at home at national and international level resulted in empty streets, as well as a drop in sales of takeaway coffee or chocolate bars.

"The same trends were observed throughout Europe, where consumption at home increased significantly and the purchase of active recreational goods (takeaway coffee, bottled water, takeaway confectionery) decreased constantly," says the finance manager at Nestlé Baltics.

Worldwide, the biggest growth driver for Nestlé by product category was Purina PetCare and its high-end brands Purina Pro Plan, Purina ONE and Felix. Due to the increased demand for cheap enriched milk and products for home cooking in the dairy category, there was a high single-digit increase. The coffee category showed a moderate single-digit increase, driven by strong consumer demand for Starbucks goods, Nespresso and Nescafé. Starbucks' sales of goods amounted to 2.7 billion Swiss francs, generating additional sales of more than 400 million Swiss francs in 2020. The category of ready meals and cooking aids had average single-digit growth with strong growth in most commodity groups during tight restrictions. Although demand in public catering channels decreased due to the pandemic, the supply of vegetarian and plant-sourced food continued to grow in double digits. Nestlé Health Science's sales reached double-digit growth, reflecting increased demand for goods that support health and the immune system. The growth of the confectionery category was slightly negative as demand for impulse purchases and gift-suitable goods decreased. The water category reported a decrease in sales because it is heavily influenced by catering channels.

Internal resources played a crucial role in

In this year's incomparable year, Nestlé focused on three main tasks: the safety of staff, business continuity and the provision of assistance to a local community in difficulty. Jelena Vorkovic explains that one of the factors that helped achieve positive results was the company's rapid and timely response to the new reality, which manifested itself even before the introduction of quarantine measures in Europe: Nestlé adopted a rule to do without business trips, restricted internal and external meetings, paid even more attention to hygiene and the safety of employees, making it a priority.

"By ensuring even higher safety standards in manufacturing, we were able to maintain production capacities and meet increased demand in certain product segments. In 2020, the internal resources of our company played a very important role. In the context of the global pandemic, we were able to react rapidly, adjust action plans and forecasts to a constantly changing environment and avoid costly mistakes," concludes J. Vorkovica.

For more information, see Nestlé's annual report

https://www.nestle.com/sites/default/files/2021-03/2020-annual-review-en.pdf

 

More about Nestlé

Nestlé is the world's largest food and beverage company with more than 230,000 employees. The company has more than 2,000 brands, from international legends to local favorites, and is represented in 187 countries. Nestlé's best-known brands are "Nescafé", "Maggi", "Nesquik", "Purina", "Lion", "Kit Kat", "Perrier" and others.

Nestlé's representative office in the Baltic States was established in 1996. Six years later Nestlé Baltics Ltd. was established with its headquarters in Vilnius.