Purina witnessing a deceleration, admits Nestlé’s CFO

Nestlé’s pet care division generated CHF 9.45 billion ($10.7B/€9.9B) in sales from January to June 2024, against CHF 9.37 billion ($10.6B/€9.8B) during the same period in 2023.

According to the company, Purina’s 3.8% organic growth was led by the “continued momentum” for Purina Pro Plan, Fancy Feast and Purina ONE. Market share gains improved for this division in the North American, European and Chinese markets.

The category was also one of Nestlé’s only divisions to witness positive Real Internal Growth (RIG) during this period (1.3%).

In Q2 2024, Nestlé’s pet care business accounted for CHF 4.86 billion ($5.5B/€5.1B), displaying a 3.3% organic growth rate. In Q1 2024, the pet portfolio’s sales revenue totaled CHF 4.59 billion ($5.2B/€4.8B).

A transitional slowdown?

According to the company’s Chief Financial Officer (CFO), Anna Manz, Nestlé’s pet care business is witnessing “some deceleration after exceptional growth over the last 4 years.”

“This is driven by slowing contribution from pricing and some softening of category volume growth as consumers spend less time at home,” she adds.

The company sees this as a transitory phase and notes that the fundamentals of the pet category are strong due to the increase in the pet population.

Nestlé has cut its guidance for the 2024 financial year, expecting the corporation’s organic sales growth rate to be at least 3%. This figure is down from its previous guidance of 4%.

The Americas

Purina PetCare was the largest growth contributor by product category in the North American zone in H1 2024, accounting for “mid-single-digit growth.” The demand was highest for the Purina Pro Plan, Fancy Feast and Dog Chow brands.

In the second quarter of the year, pet specialty stores were one of the three contributors to 80% of North America’s sales growth. The first half of the year also witnessed an expansion in Purina’s functional portfolio with products like Pro Plan Vital Systems for cats and Pro Plan Veterinary Diets Elemental for dogs.

Purina witnessed “close to flat growth” in Latin American markets, driven by the Felix and Friskies brands.

Europe and China

Purina PetCare was also a key growth contributor by product category in Europe, delivering “mid-single-digit growth.” In this zone, differentiated offerings across premium brands like Gourmet, Purina ONE and Felix boosted growth.

China was the only zone where Purina achieved “double-digit growth.” It witnessed strong e-commerce momentum for Purina Pro Plan and built on new product launches in this market.