Nestlé has reported a 2.8 per cent increase in organic sales for the first quarter of 2025, largely driven by price increases as the Swiss food giant contends with rising input costs, particularly for coffee and cocoa.
The company's total reported sales increased by 2.3 per cent to CHF 22.6 billion (£20.57 billion) in the first three months of the year, as pricing contributed 2.1 per cent to growth while real internal growth (RIG) – a measure of sales volume – was a modest 0.7 per cent.
“Growth was broad-based across markets and categories, with improving market share trends across many businesses, particularly our billionaire brands,” said Laurent Freixe, Nestlé CEO.
The results come as major competitors also struggle with consumer hesitancy. Unilever reported a slight revenue drop of less than one percent in its first quarter results, while Procter & Gamble cut its sales and profit forecast, citing a significant pullback in consumer spending. P&G executives signalled likely price increases due to US tariffs after reducing their full-year profit growth expectations from 10-12 per cent to 6-8 per cent.
Nestlé’s confectionery business showed the strongest performance with 8.9 per cent organic growth, driven by a 10.1 per cent price increase, while coffee products grew at 5.1 per cent. Both categories saw double-digit price rises in some markets as Nestlé moved to counter inflation in raw material costs.
The company acknowledged that consumer demand had softened in response to the price hikes, but maintained that implementation had occurred with “limited customer disruption.”
“Where larger price changes were implemented, in some cases we saw a pronounced initial impact on RIG, which is easing as consumer behaviour and the competitive environment adjust and stabilise,” the company said in a statement.
By region, emerging markets posted 4.5 per cent organic growth, driven by pricing of 4.8 per cent, while developed markets grew by 1.6 per cent, with volume growth of 1.4 per cent alongside positive pricing.
In Europe, Nestlé reported 2.4 per cent organic growth, driven entirely by pricing actions of 3.0 per cent that offset a 0.6 per cent decline in sales volume. European confectionery sales posted high single-digit growth led by KitKat, while Nestlé Professional grew at a double-digit rate.
Nestlé's e-commerce sales grew organically by 15.1 per cent, now representing 20.1 per cent of total group sales, highlighting the continuing shift in consumer purchasing habits.
Despite the challenging environment, Freixe affirmed that the company is making progress on its strategic initiatives, including its cost-saving programme: “Our 'Fuel for Growth' cost savings program is on track, providing the resources to help accelerate performance.”
The company maintained its full-year guidance, expecting organic sales growth to improve compared to 2024 and strengthen over the year. However, Freixe noted ongoing uncertainty: “Overall, the situation continues to be dynamic, with heightened risks and uncertainty. Our 277,000 committed colleagues are focused on successfully executing our strategy: driving efficiencies and investing for growth to accelerate our categories and improve market share.”
