Adapted from a press release and transcript from Nestlé
During the first three months of 2022, Purina PetCare contributed the most to Nestlé’s organic growth over all other segments of the food and consumer goods giant. Purina’s growth was led by its science-based and premium pet food brands Purina ONE, Purina Pro Plan and Fancy Feast, as well as veterinary products. The Russia-Ukraine War, supply chain snarls, inflation and the lingering pandemic influenced Purina PetCare’s business in early 2022.
Nestle Purina PetCare performance January through March 2022
- Sales - 4,109,000 CHF
- Compare to sales 3M-2021 – 3,620,000 CHF
- Real internal growth (RIG) -- 5.8%
- Pricing -- 7.7%
- Organic growth -- 13.6%
“PetCare maintained double-digit growth with strong pricing and solid RIG,” François-Xavier Roger, chief financial officer for Nestlé, said during the April 21 earnings call. “Sales in most segments and geographies grew at a double-digit rate with market share gains…The recently launched ProPlan LiveClear continues to resonate strongly with consumers and organic growth reached 65%. The product is now distributed in 25 markets.”
Purina around the world in first quarter of 2022
Overall, Nestlé’s North American division saw continued broad-based market share gains, led by pet food and other products. Purina PetCare was the largest growth contributor, supported by strong momentum in e-commerce and premium brands, Purina ONE, Purina Pro Plan and Fancy Feast.
In Europe, sales in Purina PetCare grew at a double-digit rate, driven by premium brands Purina ONE, Purina Pro Plan and Gourmet as well as veterinary products. Tails.com and Lily's Kitchen also saw strong momentum, supported by continued distribution expansion.
“The war in Ukraine brought unspeakable human suffering,” Mark Schneider, chief executive officer for Nestlé, said during the April 21 earnings call. “It also exacerbated supply chain disruptions and inflationary pressures in the food industry. Our values as a food company are more needed than ever to avoid unintended consequences and unnecessary suffering and shortages. I am particularly proud of all the help and support that the Nestlé Team has been providing on the ground in Ukraine and to Ukrainian refugees in neighboring countries.”
In Asia, Oceania and Africa, Japan reported high single-digit growth, driven by coffee and Purina PetCare. Overall in the region, sales in Purina PetCare grew at a high single-digit rate, led by Purina Pro Plan and Purina ONE.
“In Asia, this is one of the areas where we are gaining market share as well,” Roger said in response to a question. “We are still at a relatively small market share relative to the one that we have in Europe or in the U.S. but gaining as well and investing. The market is still at a relatively early stage of development. So no specific concern there for PetCare in Asia.”
Nestle’s Latin American division saw market share gains in pet food and other products. Sales in Purina PetCare grew at a double-digit rate, led by Dog Chow, Cat Chow and Purina Pro Plan. By country, Mexico reported broad-based double-digit growth, reflecting high demand for Purina PetCare and other products. Sales in Chile grew at double-digit rate, led by Purina PetCare and other products.
Supply chains and pricing effects on Purina PetCare
“In a year that saw significant and increasing input cost inflation, we stepped up pricing in a responsible manner,” Schneider said.
“At the same time, we launched meaningful innovations and saw strong growth in our affordable offerings, which ensures that consumers retain access to our products.
“The Nestlé team did a superb job navigating continued supply chain challenges, taking mitigating actions to offset cost increases and staying focused on mid-to-long term business and sustainability priorities. This is the third year in a row where the entire team has to operate under external crisis conditions, and I tip my hat in admiration for their commitment, energy and perseverance.”
