VEVEY, SWITZERLAND — Nestlé’s Purina PetCare division was, once again, “the largest contributor to organic growth in 2022,” thanks to continued momentum for its Purina Pro Plan, Purina ONE, Fancy Feast and veterinary brands, according to Nestlé. The company reported its full-year 2022 results on Feb. 16.
“PetCare does stand out as the one category that delivered over and above. No question about it,” Mark Schneider, chief executive officer, member of the executive board and director at Nestlé.
Note: Currency conversions are based on Feb. 17 conversion rates.
Purina posted net sales of 18.1 billion Swiss francs ($19.5 billion USD), up 16.4% from 2021 sales. Real internal growth for the business was 4.3% and organic growth was 14.5%.
Cost inflation resulted in an 8.2% increase in pricing across the board for Nestlé in 2022. For its Purina business, Pricing was up 10.2% for its Purina business, reflecting the highest annual percentage increase in pricing among all other operating segments owned by Nestlé.
“Pet Care posted its third consecutive year of double-digit growth despite supply constraints with mid-single-digit RIG,” said François-Xavier Roger, executive vice president and chief financial officer. “Science-based premium and veterinary products saw strong sales development. Growth was also supported by pricing, continued e-commerce momentum and innovation… It is worth calling out that pet care also saw a significant margin improvement in the second half [of 2022].”
During the Q&A portion of Nestlé’s full yar 2022 earnings call, Schneider addressed the company’s recent capacity expansions and the impact of supply chain disruption for Purina.
“If we are sighting supply chain constraints, maybe a tad more often than some of our peers, I think it is due to the fact that we have such a large and successful pet food business,” he said. “We are little bit the victims of our own success here…”
He shared the company’s greenfield projects are expected to come online in 2023 and 2024, but will take time due to planning, permitting and startup. Continued demand growth for pet nutrition will continue to drive future CapEx investments for its Purina business, Roger noted.
Purina bolstered sales in several geographical regions for Nestlé in 2022, including Zone North America, Zone Europe and Zone Latin America.
In Zone North America, Purina led the growth across e-commerce and pet specialty channels. The company’s Purina Pro Plan and veterinary products, Purina ONE and Fancy Feast experienced strong double-digit growth over the year, which was supported by innovation, according to Nestlé.
In Zone Europe, Nestlé described Purina as “the key growth driver,” supported by the performance of its Gourmet, Felix and Purina Pro Plan premium brands in the e-commerce and pet specialty channels.
“Within pet care, Lily's Kitchen and Tails.com, both grew by more than 20%,” Roger said.
In Zone Latin America, Purina saw double-digit growth led by its Dog Chow, Cat Chow and Purina Pro Plan diets. This growth was also supported by an ongoing expansion of its Purina ONE portfolio throughout the region.
In Zone Asia, Oceania and Africa (AOA), Purina posted high single-digit growth supported by its Purina ONE, Felix and Purina Pro Plan ranges. Purina also supported low single-digit sales growth in Japan, alongside Nestlé’s Nescafé and Starbucks portfolios.
Purina saw double-digit sales growth in Zone Greater China, particularly in the specialty and e-commerce channels.
Overall, Nestlé reported sales growth of 8.4% to 94.4 billion Swiss francs ($10.2 billion USD) and organic growth of 8.3% for the full-year 2022.
Nestlé updated its full-year 2023 outlook and confirmed its 2025 targets as part of its 2022 earnings report. The company expects organic sales growth between 6% and 8% for the full year, and an underlying trading operating profit margin between 17% and 17.5%. By 2025, the company expects mid-single-digit organic sales growth and an underlying trading operating profit margin between 17.5% and 18.5%.
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