‘Fastest growing markets’: Nestle 2018 growth in SEA headed by Vietnam and Indonesia
Of Nestle’s CHF 21.3bn (US$21.4bn) total sales coming from what it classified as Zone Asia, Oceania and sub-Saharan Africa (AOA), CHF 6.6bn (US$6.6bn) or 30.8% was from its ASEAN markets.
Zone AOA demonstrated 4.3% organic growth in total as compared to 2017, with China, South East Asia, and South Asia all contributing to this.
Vietnam and Indonesia were clear leaders towards the ASEAN growth numbers, posting double-digit growth numbers.
“[The solid growth in South East Asia has been] underpinned by double-digit growth in Vietnam and Indonesia, led by Milo and Bear Brand in particular,” said Nestle.
Newly appointed Executive Vice President and Chief Executive Officer Zone, Asia, Oceania and sub-Saharan Africa (AOA) Chris Johnson added that Vietnam may not be a ‘huge market’ for Nestle, but is ‘the fastest growing market in Asia’.
“[Vietnam’s] contribution to growth has been important,” he told VnExpress.
“If we look at other countries, sometimes we are strong in one or two categories, but here we have a broad presence in a number of categories.
“MILO is the strongest brand for Nestlé Vietnam along with four other brands including NESCAFÉ, MAGGI, Nestlé itself and NAN (infant nutrition).”
Innovation and trends
Much of the company’s innovation investment last year was centred around sustainability, plant-based product development and affordable nutrition.
Nestle launched its own Institute of Packaging Sciences in an effort to make 100% of its packaging recyclable or reusable by 2025.
““Research focus areas will include recyclable, biodegradable or compostable polymers, functional paper, as well as new packaging concepts and technologies to increase the recyclability of plastic packaging,” a company spokeswoman told FoodNavigator-Asia.
“This work is expected to deliver a pipeline of functional, safe and environmentally-friendly packaging solutions.”
Nestle also launched a vegan range of Haagen Daz ice creams in the United States, made with cocoa, peanut butter or coconut cream instead of ‘less sustainable non-dairy alternatives’ such as almond milk.
Other report findings
Nestle posted total Underlying Trading operating profit worth CHF 15.5bn (US$15.6bn) in 2018, and this was also headed by Zone AOA overall with a 22.8% contribution in total.
In terms of product type, the category that generated the most sales for Nestle in 2018 was Powdered and Liquid Beverages at CHF6.1bn (US$6.1), which contributed 28.5% of sales overall to the region.
This was followed by Milk products and Ice cream at CHF5.1bn (US$5.1) with 24.1% of sales, and Nutrition and Health Science at CHF 4.9bn (US$4.9) with 22.9% of sales.
