23 Oct 2020
Posted in Consumer
Nestle growth likely due to COVID-19-related increases in pet ownership and concerns over health
Following the news that Nestle beat Q3 expectations with 4.9% growth;
Ryan Whittaker, Consumer Analyst at GlobalData, a leading data and analytics company, offers his view:
“GlobalData’s recent consumer survey (21 September), found that over half of global consumers consider themselves to be extremely or quite concerned about their health, while only 15% consider themselves not concerned.* Therefore, that one of Nestle’s strongest growth drivers was health products isn’t a surprise. The importance of health during the pandemic has resulted in a spike in health-seeking behaviors and thus an increase in health-positioned products.
“As consumers have been often limited to their homes or working from home, in-the-home health-positioned food and drink have remained strong, reflected in that Nestle has seen a 26.4% fall in out-of-home and on-the-go product consumption. Improvements here may have to wait until consumers begin commuting to work again, rather than working from home.
“The largest contributor to Nestle’s growth was Purina PetCare and its premium brands Purina Pro Plan, Purina ONE and Felix. A consequence of increased working from home has been an uptick in pet ownership. GlobalData’s survey found that 23%* of consumers have adopted a pet during the lockdown period, and 18%** of consumers said that they were buying more products for their pets than before the pandemic. There are many reasons to get a pet, but the increased time available for many consumers, the desire to be more physically active, combined increased loneliness from social distancing has led many to adopt pets. This has resulted in a petcare boom that will continue to the end of the pandemic. While some consumers may give up their pets following the pandemic, this category’s increases are likely to persist if consumers continue to work from home.”
* GlobalData’s COVID-19 recovery survey, published 21 September
** GlobalData’s COVID-19 recovery survey, published 21 September, combining “I am buying significantly more than before”; “I am buying slightly more than before”; “I am stockpiling”; “I have never bought this but have started buying this now”