VEVEY, SWITZERLAND — Nestlé’s Purina PetCare business was “the largest contributor to organic growth” in the first nine months of fiscal 2022, reflecting continued price increases to combat inflation and continued growth for its science-based, premium and veterinary offerings.
Note: Swiss franc (CHF) to USD conversions are based on Oct. 20 exchange rates.
Sales for Purina PetCare totaled 13.2 billion Swiss francs ($13.2 billion USD) in the first nine months of fiscal 2022, up 16.3% from 11.3 billion Swiss francs ($11.3 billion USD) recorded for the first nine months of fiscal 2021. Nine-month net sales for the pet nutrition division surpassed all other Nestlé divisions except powdered and liquid beverages, which garnered sales of roughly 18.5 billion Swiss francs ($18.4 billion USD).
Overall, the pet nutrition division experienced the second-highest organic sales growth at 14.4%, behind Nestlé’s water business at 15.1%. Real internal growth for Purina was marked at 4.8%.
Nestlé increased its pricing across all product categories, with Purina Petcare experiencing the highest price hike at 9.6% in the first nine months of the year. On average, Nestlé increased pricing across its portfolio by 7.5%. Pricing has steadily increased across the company since the fourth quarter of 2020, largely due to inflation.
“As in the previous quarters this year, growth was primarily driven by pricing,” said Ulf Mark Schneider, chief executive officer of Nestlé, in the company’s third-quarter sales call on Oct. 19. “We maintained our responsible approach to pricing, but further pricing steps were clearly needed to react to significant levels of global inflation hitting us.”
Purina PetCare contributed significantly to sales growth in Zones North America, Europe and Latin America. In Zone North America, sales for Purina PetCare grew at a “strong double-digit rate,” according to François-Xavier Roger, chief financial officer.
“RIG [real internal growth for Zone North America] was 0.1%, impacted by a high base of comparison in 2021 and supply chain constraints, particularly for Purina PetCare,” Roger added.
In Zone Europe, Purina PetCare and Nestlé Professional were the two key growth drivers in terms of sales, and the pet nutrition category posted double-digit sales growth in Zone Latin America.
“Science-based, premium and veterinary products saw strong sales developments,” Roger said. “Growth was also supported by continued e-commerce momentum on innovation.”
Overall, Nestlé reported nine-month sales of 69.1 billion Swiss francs ($69.1 billion USD), up 9.2% from 63.3 billion Swiss francs ($63.2 billion USD). Real internal growth was 1%, and organic growth was 8.5%.
Nestlé updated its full-year fiscal 2022 guidance to reflect slightly higher expectations for organic sales growth around 8%. Underlying trading operating profit margin is still expected to be around 17% for the full year. The company stated it expects underlying earnings per share and capital efficiency to increase.
“We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation,” Schneider said. “The challenging economic environment is a concern for many people and is impacting their purchasing power. That's why we aim to keep products affordable and accessible while considering the interests of all our stakeholders… We remain confident in the strength of our brands, operational execution and underlying category dynamics which position us well for future growth."
Read more about corporate strategy, financial performance, mergers and acquisitions on our Business page.