Pet food suffers the biggest price hike across Nestlé’s businesses

Nestlé has named Purina PetCare its largest contributor to the positive numbers, posting CHF9.37 billion ($10.8B/€9.8B) in sales in H1 2023. In the same period last year, the category hit CHF8.58 billion ($10B/€8.9B).

The Swiss giant says that wet and dry pet food products had performed well during the first half of the year, with organic growth in the pet care segment increasing by 13.9%. Products with double-digit growth included Purina ONE, Purina Pro Plan and Friskies. 

The category also received the biggest impact of price increases across all the businesses of the multinational, with prices going up by 12.1% from January to June. Milk products (11.3%) and water (10.5%) follow. As reported by GlobalPETS, inflation continues impacting pet supplies and specially pet food. 

Nestlé’s stock gained 1.55% at the closing of the market on Thursday 27 July.

EU and North America 

Purina PetCare was the largest contributor to growth in both Europe and North America. 

According to Nestlé, the performance of the segment in Europe was driven by differentiated offerings across premium brands Felix, Gourmet and Purina ONE.

Whereas in North America, the company observed market share gains with double-digit growth attributed to Purina ONE, Purina Pro Plan and Friskies. The company says there was a “broad-based demand” in the region across segments and channels, particularly e-commerce.

Asia 

Purina registered “high single-digit growth” in the Asia, Oceania and Africa (AOA) regions. 

Nestlé’s performance in Japan and South Korea reported mid-single-digit growth, driven by the pet care portfolio. 

Purina PetCare reported double-digit growth in China, driven by Purina Pro Plan and Fancy Feast. The company highlighted that Purina opened new production lines in Tianjin (Northern China) in the second quarter.

Optimistic forecast 

The company has upgraded its organic sales growth outlook for 2023 to 7–8%. The underlying trade profit is expected to fall between 17–17.5%.

Nestlé CEO Mark Schneider mentions that the company has “pursued its strategic priorities with discipline and focus in a fast-evolving consumer environment.”

“For the remainder of the year, we are confident that we will deliver a positive combination of volume and mix, an improvement in gross margin and a significant increase in marketing investments,” he shared with investors.