Nestle's upbeat second quarter 2020 sales fuelled by coffee

Vevey, Switzerland: Nestle sailed past ailing consumer-goods rivals by reporting higher sales amid strong demand for coffee in home-offices and pet food.

First-half revenue climbed 2.8 per cent on an organic basis, the maker of Lean Cuisine meals said. The company said it expects 2-3 per cent growth this year and an improvement in its underlying trading operating margin.

The results show how Nestle's broad portfolio has protected it throughout the lockdown as it outperformed rivals like Unilever and Coca-Cola Co., which recently reported lower sales. Sales of Starbucks-brand coffee products rose more than 10 per cent, while Nespresso had mid-single-digit growth.

Revenue from bottled water slumped 10 per cent as lockdowns around the world led to closed restaurants and bars. The company is considering a sale of its mass-market brands in the US and local labels in China to focus on premium offerings. Confectionery, another product often bought for on-the-go consumption, also dropped.

Unlike some companies reporting a return to growth in China, Nestle reported flat sales in that market in the second quarter. While coffee, dairy and ice cream rebounded there, growth was held back by a decline in infant formula sales.