Presso

Nestlé had its best quarter in nearly a decade thanks to your kitchen caffeine fix

Snacks / Thursday, April 22, 2021

My Nesquik brings all the boys to the yard... Nestlé is the world's largest packaged food company, known for treats like Kit Kats, Hot Pockets, and basically anything that begins with "Nes." A year ago, Nestle reported its strongest quarterly sales growth since 2015, thanks to pandemic snacking and pet-mania (it owns Purina). Last quarter was even sweeter:

  • Nestlé had its strongest quarterly sales growth in almost 10 years. Sales jumped 8%, largely thanks to your morning coffee routine...

Does the Nespresso store do samples?... Nestlé's killer growth was fueled by the at-home coffee boom. Instead of hitting Starbs for a pre-office latte, you were firing up Nespresso pods or Nescafé in your jammies. Nespresso sales jumped a whopping 17% last quarter, as Nestlé won new customers in North America.

  • Treat Yo (Home) Self: People invested in espresso machines and name-brand brews to replicate barista coffee from their kitchens. Nestlé's Vertuo = business class Keurig.
  • Not just Nes: In 2018, Nestlé paid Starbucks $7B+ for the right to sell its packaged coffee beans/grounds. Those thrived last quarter, too.

One habit is worth a lifetime... of customers. You buy Nestle's Kit Kats and Toll House cookie dough occasionally. But your daily coffee isn't just a product for Nestlé — it's the habit that keeps on giving. You splurge $200 for a Nespresso machine, then spend $30/month to refill pods. That's why Nestlé is making investments to own the coffee habit: it's expanding production centers in Switzerland, and intro'ing new flavors and products (think: touchless machines). TBD if the momentum will continue as coffee shops and offices reopen.

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.