Nestle SA says this Starbucks partnership has been ‘great success’ for FMCG firm

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Published: February 13, 2020 1:31:37 PM

Nestle SA has released its earnings report for 2019 and has said that the company performed well in a product-line which was made in partnership with coffee chain Starbucks.

Early in 2019, Nestle had announced its collaboration with the coffee chain for curating 24 products such as roast and ground and whole bean coffee for sale outside Starbucks cafes.

Nestle SA has released its earnings report for 2019 and has said that the company performed well in a product-line which was made in partnership with coffee chain Starbucks. “The launch of our premium Starbucks products has been a great success. We are very pleased with the speed of the product rollout and the positive response by consumers,” Nestle said on Thursday. Early in 2019, Nestle had announced its collaboration with the coffee chain for curating 24 products such as roast and ground and whole bean coffee for sale outside Starbucks cafes. Nestle has rolled out the product in 40 markets.

“Coffee had good momentum, helped by strong demand for Starbucks products, which by now have been rolled out in more than 40 countries. In total, Starbucks products generated more than Swiss franc 300 million of incremental sales in 2019,” the release said.

Key takeaways from Nestle results

  • Nestle reported organic growth of 3.5%.
  • FMCG major’s total reported sales jumped by 1.2% to Swiss franc 92.6 billion against last year’s Swiss franc of 91.4 billion. 
  • The company reported its net acquisitions had a negative impact of 0.8%.
  • Nestle’s underlying earnings per share hiked by 11.1% in constant currency.
  • Free cash flow improved by 10.9% to Swiss franc 11.9 billion.
  • Underlying trading operating profit jumped by 4.8% to Swiss franc 16.3 billion.
  • “South Asia grew at a mid single-digit rate driven by strong growth in India. Maggi, NAN and Nescafé performed well, helped by innovations and distribution expansion,” Nestle said. 

Divestments

In 2019, Nestle divested three of its businesses — Nestle Skin Health, US ice-cream business to Froneri for $4 billion and the company has also agreed to sell a 60% stake in its cold cuts and meat-based products brand Herta charcuterie. Meanwhile, Nestle SA’s India arm is also going to release its quarterly results on Thursday.

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