Nestle warns of difficult 2012

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Nestle warns of difficult 2012

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Nestle is warning 2012 will be a tough year due to sluggish growth in developed countries.

However the world’s biggest food group said demand in emerging markets and price rises had helped its underlying sales growth to hold up in the first-quarter.

Nescafe and pet food sold well as Nestle maintained growth in most of western Europe including Britain, France, Italy, the Iberian peninsula and Switzerland.

“As anticipated, 2012 is already confirming itself to be a challenging year,” said Chief Executive Paul Bulcke.

“In many developed markets where consumer confidence is low, the trading environment is subdued while in most emerging markets, conditions remain dynamic and rich in growth opportunities.”

Emerging markets – which already make up more than 40 percent of Nestle’s sales – grew 13 percent compared with just 3.1 percent for developed countries, with volume growth down 0.4 percent in the Americas and only rising 0.2 percent in Europe.

Nespresso, Nestle’s fastest-growing big brand delivered underlying sales growth of around 20 percent, with demand increasing around the world.

It recently won a European patent battle with rivals which should help Nespresso as it pursues court cases in individual countries.