The shift to homeworking has turbocharged coffee sales during the pandemic, with global demand for the paraphernalia needed to make Americanos and espressos fuelling the biggest quarterly sales rise in a decade at Nestlé.
The Swiss food firm said sales of pods for its Nespresso coffee machines surged 17% in the first three months of 2021, and demand for jars of Nescafé instant coffee and products from its Starbucks-branded range was also up strongly.
Like other consumer goods companies, Nestlé has done well during the pandemic as consumers have bought more packaged foods and tried to brighten up lockdowns with Starbucks at-home coffee or by baking treats with its Carnation evaporated milk.
Coffee was the fastest-growing area but pet care was up 9%, buoyed by the pandemic-related increase in ownership. The coffee boom pushed up Nestlé’s overall sales growth to 7.7% compared with 4.3% in the same period of last year.
The sales outcome was more than double the rate of growth expected by City analysts, with Jon Cox at Kepler Cheuvreux, describing it as a “blowout” performance.
Mark Schneider, the Nestlé chief executive, said the company had gained market share and pointed to “solid growth” in retail sales. Its out-of-home business, which sells food and drinks to restaurants and hotels, was also showing signs of improvement, he said. Out-of-home sales declined nearly 12%, after falling by more than 30% last year.
The strong growth at the confectionery-to-pet-food group, which owns household brands such as KitKat and Purina pet food, was also partly due to higher prices. Rising commodity costs led it to push through increases that were behind 1.2% of the increase.