Nestlé overtaken by competitors in the first quarter
Published: Thursday, Apr 25th 2024, 14:10
Updated At: Friday, Apr 26th 2024, 01:59
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For many years, Nestlé was regarded as the poster boy among European food producers. While the French company Danone and the British Unilever, for example, were already struggling with declining volumes in the first half of 2022, Nestlé was spared this until the third quarter of the same year. And even after that, the decline in sales volumes was weaker than that of the competition. But now the wind has changed.
In the final quarter of 2023, for example, Nestlé's RIG turned positive, although the company implemented the highest price increases among its three competitors. At 7.2%, organic growth was significantly higher than at Danone (5.1%) or Unilever (4.7%), which for their part had already tightened their price screws to a much lesser extent.
Now, however, in the first quarter of 2024, Nestlé lost 2 percent in sales volume, while its two major competitors recorded a clear increase (Unilever: +2.2%, Danone: +1.2%). Despite stronger price increases of 3.4 percent (Unilever: +2.2%, Danone: +2.9%), Nestlé only achieved moderate organic growth of 1.4 percent.
The former model pupil thus started the year significantly weaker than its competitors, which grew by 4.4 percent (Unilever) and 4.1 percent (Danone) respectively. And for the first time in three quarters, Nestlé's organic growth is once again weaker than that of Unilever, whose most important products include Ben & Jerry's ice cream and Knorr soups. Danone, with products such as Activia and Evian, has alternated with Nestlé in terms of organic growth for almost two years, but was previously weaker for five quarters.
However, the three companies are of course not comparable on a one-to-one basis. Nestlé has by far the highest turnover of the three companies. The Swiss group generated almost 93 billion Swiss francs in 2023. Unilever achieved a turnover of just under 60 billion euros, Danone only just under 28 billion euros.
Unilever also has a broad portfolio of cleaning agents and personal care products. Nestlé is not active in these product sectors. In addition, Unilever is strongest in the Asia-Pacific-Africa (AOA) region, while Nestlé and Danone generate more than a quarter of their sales in the USA.
Nestlé also performed poorly in one area in particular, which the two competitors barely cover: the frozen food business in the USA.
©Keystone/SDA
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