Nestlé Waters sees growth in emerging markets and premium brands

17-Aug-2016 - Last updated on 18-Aug-2016 at 10:22 GMT

Nestle's brands include S.Pellegrino, Perrier, Vittel & Pure Life. Pic: iStock/jarihindstrom

Nestlé Waters has posted sales of CHF 3.9bn ($4.1bn) in its 2016 half yearly report, with 4.2% organic growth.

The sector was driven by double-digit growth in emerging markets, along with high single-digit growth in premium sparkling brands S.Pellegrino and Perrier.

Nestlé Waters says its developed markets continue to grow despite a deflationary environment. Solid growth in the US was driven by international premium brands and natural spring water brand Poland Spring. However, regional brands were hit by a tornado that severely damaged a plant in Texas in April.

In Europe, growth was affected by poor weather, in contrast to a hot summer in 2015, particularly in France and Italy. Spain, the UK and Poland performed well.

In its Asia, Oceania and sub-Sahara Africa zone, Nestlé Waters reported double-digit growth in Thailand, Egypt and Vietnam, but adds that competitive intensity in China remains high.

Latin America delivered good growth, with Mexico leading the way.

Across its portfolio, “The increase in trading operating profit margin was driven by improved product mix through premiumization,” says Nestlé. “We achieved cost efficiencies across manufacturing, procurement and distribution, as well as some benefit from lower input costs.”

Nestlé Waters’ portfolio covers 50 brands across five continents. Its brands include Vittel, Arrowhead, S.Pellegrino, Pure Life, Contrex and Acqua Panna.

Across all divisions in H1 2016, Nestlé posted sales of CHF 43.2bn ($45.1bn) with 3.5% organic growth and 2.8% real internal growth.