Nestle starting to turnaround | Food Business News

VEVEY, SWITZERLAND — Nestle SA saw improved performance by its Food & Snacks business as the world’s largest food and beverage company tallied organic sales growth in the fiscal 2026 first quarter.

For the three months ended March 31, sales rose 3.5% organically despite a reported sales decline of nearly 6% to 21.32 billion Swiss francs ($27.15 billion) from 22.6 billion Swiss francs a year earlier. Vevey-based Nestle said the organic gain reflected 1.2% real internal growth (RIG) and a 2.3% rise in pricing.

“Our performance is broad-based,” Philipp Navratil, chief executive officer, told financial analysts in an April 23 conference call on the quarterly sales results. “RIG was positive across all zones and categories, except infant formula within Nutrition, which was impacted by the recall. By category, Coffee was the star, with recovering volumes and positive mix.”

Chief financial officer Anna Manz said, “Food & Snacks also improved, delivering RIG above 2% for the first time since 2021.”

Organic sales for Food & Snacks climbed 4.2% in the first quarter, aided by 2.1% RIG and a 2% uptick in pricing, while reported sales for the segment decreased 4.1% to 6.18 billion Swiss francs ($7.87 billion) from 6.44 billion Swiss francs. Nestle said the performance was fueled by high-single-digit organic growth and sequential RIG improvement in confectionery, partially offset by category weakness in frozen.

“Overall, organic growth has been relatively stable over the last five quarters, but the quality of that growth has been improving,” Manz said of the Food & Snacks result. “RIG was negative in Q1 and Q2 last year but has been improving progressively in the last three quarters to reach more than 2% in Q1. A major factor has been our confectionery business returning to growth as we’ve moved through our pricing actions.”

Coffee segment sales surged 9.3% organically in the quarter on 3.5% RIG and 5.7% price growth. The company cited double-digit organic growth for Nescafé that was “broad-based across markets.”

“Performance in Coffee was very strong,” Manz said. “Pricing continues to contribute positively, although its impact will ease as we progress through the year. RIG momentum is improving, supported by the strength of our brands. Take Nescafé as an example. In the US, we had very strong pricing and double-digit RIG in Q1, even in a more difficult consumer environment. This reflects smart price-pack architecture and strong in-store execution, as well as occasion-expanding innovation like Nescafé Gold Espresso.”

In its other segments, Nestle said organic sales grew by 3.3% year over year in Waters & Premium Beverages (down 6% on a reported basis) and by 2.7% in Petcare (down nearly 7% reported) but fell by 3.9% in Nutrition (down 14% reported).

‘Clear improvement’ in Americas food, snacks

Among Nestle’s business regions, organic sales for Zone Americas (AMS) advanced 3.8% even as reported sales dropped nearly 7% to 9.11 billion Swiss francs ($11.6 billion) from 9.76 billion Swiss francs a year ago.

In AMS, Food & Snacks (28% of zone sales) generated mid-single-digit organic sales growth, which Nestle called “a clear improvement after two years of weaker growth,” adding that RIG was positive for a second consecutive quarter.

“This was driven by confectionery, with improving RIG in Brazil and strength in Toll House baking products in the US,” Nestle said. “Frozen foods in the US remains under pressure, reflecting current category softness.”

Nestle cited strength in Toll House baking products in the United States during the first quarter.

| Photo: ©BILLTSTER – STOCK.ADOBE.COM

The Coffee business in AMS (20% of zone sales) turned in high-single-digit organic sales growth, lifted by pricing and positive RIG across all larger markets, according to Nestle.

“Nescafé soluble coffee stood out, with strong RIG and pricing, reflecting the brand’s strength and enhanced consumer value proposition,” Nestle said. “Starbucks also performed well, with RIG-led growth, offsetting softer performance in Coffee Mate.”

Bolstering the portfolio

Also in coffee, Nestle USA and Keurig Dr Pepper on April 21 said they renewed and expanded their strategic partnership, including the manufacturing and distribution of Starbucks K-Cup pods in the United States and Canada. Under the global agreement for consumer packaged goods, Nestle is responsible for the distribution of Starbucks at‑home coffee platforms into grocery and other retail channels outside of Starbucks coffeehouses, excluding ready-to-drink products.

Navratil noted to analysts that a “winning portfolio” remains another priority for Nestle, announcing that the company has reached an agreement to sell its majority stake in the Blue Bottle Coffee business but will retain the rights to Blue Bottle single-serve Nespresso capsules. The sale, to Beijing-based investment firm Centurium Capital, is expected to close in first-half 2026. Financial terms weren’t disclosed.

Nestle also is “making progress” on finding a buyer for its remaining water business (including such brands as San Pellegrino, Perrier ⁠and Acqua Panna) and divesting vitamins, minerals and supplements assets, Navratil said. The company, too, is in the process of selling its ice cream portfolio to Froneri International Ltd.

“We are accelerating investments behind our growth platforms,” Navratil said. “These are areas where structural growth drivers, competitive advantages and our strong innovation pipelines come together, driving high-single-digit organic growth or better. Elsewhere, we are addressing affordability and driving premiumization by sharpening our price-pack architecture. We are investing more behind fewer, stronger brands, and our marketing transformation is a key enabler.”