Nestlé has recorded organic growth of 2.8% in the quarter ending 30 June 2020, with real internal growth (RIG) of 2.6% and pricing of 0.2%.
Despite this, total reported sales decreased by 9.5% from CHF45.5 billion the year before CHF41.2 billion.
Nestlé has remained resilient in a rapidly changing environment, delivering solid organic growth and improved margins in the first half. These results demonstrate the agility of our business and the strength of our diversified portfolio across geographies, product categories and channels.
Mark Schneider, Nestlé CEO
Nespresso reported growth at a mid-single-digit rate, boosted by significant sales acceleration for e-commerce and the Vertuo system.
North America noticed strong double-digit growth, with continued market share gains. Africa, Oceania, and Asia grew at a double-digit rate, with positive contributions from most markets. Sales in Europe decreased, indicating significantly reduced demand in the out-of-home channel and boutique closures.
Globally, at the end of June, 86% of boutiques had reopened. In July, Nespresso announced a CHF160 (US$175) million investment in the expansion of its Romont production centre in Switzerland to meet growing consumer demand worldwide.
According to Nestlé, the COVID-19 pandemic has led to profound changes in operating environments across markets. The global economy has entered a recession, supply chains have been tested, and consumer behaviour has changed at a rapid pace.
Nestlé quickly applied effective measures to cope with this new reality, and its supply chain has shown flexible, as manufacturing and distribution facilities continued to operate without significant disruptions.
Because of changing consumer habits, Nestlé has been developing solutions to meet the increased demand for at-home consumption, products that support health and boost the immune system, as well as affordable offerings.
The company has also stimulated the development of its digital capabilities and expanded e-commerce and online communication.
In the first half of 2020, the outcomes of COVID-19 on organic growth changed materially by geography, sales channel and product category, depending on the timing of outbreaks, the scope of restrictions and consumer behaviour.