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Nestlé highlights increased brand investment as key pillar of return to volume growth

NestleNestlé has committed to investing more heavily and in a more focused way behind its brands in 2024, as it aims to return to volume growth.

The FMCG giant, which owns brands including KitKat, Nespresso and Purina, grew its organic sales by 7.2% in 2023. The company’s real internal growth (RIG) measure declined by 0.3% in the year. RIG excludes the impact of pricing.

Speaking during the company’s full-year results today (22 February), CEO Mark Schneider acknowledged that it had largely driven growth through price increases in recent times. While this has served the company well during a period of high inflation, he said it now needs to return to volume growth.

“[RIG] has to take over as the main bedrock of growth from pricing… The long-term recipe for success is continued focus on volume and mix,” Scheider said.

In 2024, the recipe is not only to spend more on brand support, it’s also to spend it in a more focused way on our proven winners.

Mark Schneider, Nestlé

Increased support behind brands will be a key ingredient towards achieving this goal. The business’s marketing investment behind its brands increased by 70 basis points in 2023, it said, pledging that it would continue to increase this level in 2024.

Schneider noted that stepping up brand investment was particularly important for its brands when they are going up against private label competition.

As well as increasing investment behind its brands, Nestlé is also focusing that spend on the areas where it will be most impactful, Schneider said.

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“In 2024, the recipe is not only to spend more on brand support, it’s also to spend it in a more focused way on our proven winners,” he stated.

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In particular, it will focus investment on its “billionaire brands”, its fastest-growing, most valuable brands, which include Nespresso and KitKat.

KitKat delivered 14.3% organic growth in 2023, and saw 8.4% real internal growth in the year. The company described it as a “powerhouse brand” for the business.

Innovation and “renovation” will also be focuses for Nestlé when it comes to delivering volume growth in 2024.

“What does give me confidence… is our ability to develop and advance growth catalysts,” Schneider said.

That innovation is particularly focused on premiumisation, something that the company said does “wonders” for its organic growth and margins.

“Keeping products fresh and keeping brands exciting is the recipe for success,” Schneider concluded.

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