[16 February/Food Navigator]

Nestle has acknowledged that it is facing an uphill battle to deliver organic growth in the face of the changing consumer having reported sales growth for the final quarter of 2017 of 1.4%, well below the consensus forecast at 2.6%.  This is the lowest organic sales growth figure reported in this century according to one analyst and the Nestle CEO, Mark Schneider, said the company was disappointed about sales performance in the final quarter.  The company has a goal of achieving mid-single digit organic sales growth by 2020 and acknowledged that the incline to achieving this goal had now become much steeper.  The company noted it had made and continues to make changes to its product portfolio via M&A however the impact of these changes will not impact sales growth until 2018 and 2019.  The group’s M&A strategy is intended to align the company’s portfolio with the changing consumer, with health and traceability as two key issues shaping demand for food.  Mr Schneider noted that the consumer is increasingly willing to pay for premium products but are increasingly price sensitive when it comes to what they perceive to be exchangeable standardised products.  He also added that it was critical that Nestle adopts fast cycle innovation to roll out strategy product innovation and renovation more quickly.