Nestlé Malaysia reports a resilient performance, says production innovation was key

Nestlé Malaysia has showed resilience in its performance for its first quarter ended 31 March 2023. For the first quarter of 2023, the Group delivered a higher turnover of RM1.84 billion, an increase of 8.8% from RM1.69 billion in the same quarter of 2022. This was driven by improved domestic and export sales, which increased by 10% and 4% respectively on the back of a strong baseline in the previous year.

According to Nestlé Malaysia, this was achieved with the group’s steadfast focus on demand generation activities, supported by efficiencies and savings to cushion the impact of external headwinds - namely the flow through of high commodity costs and weakening of the ringgit.

Juan Aranols, CEO of Nestlé Malaysia said wider product portfolios, and continuous product innovation helped it to remain well in tune with consumers’ expectations.  “This focused strategy is well supported by effective consumer engagement and excellence in sales execution across all relevant channels and platforms, including digital and on-ground activation,” he said.

With product innovation as a focus, the group introduced exciting offerings in the quarter under review such as the KIT KAT Pink Ice Cream which was a huge success through the Lunar New Year festivities, amongst other Ice Cream innovations. The Group also rolled out new versions of HARVEST GOURMET plant-based burger, along with new launches under its STARBUCKS Ready-to-Drink range, NESCAFÉ and MAGGI.

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Aranols said he expects the global turbulences to continue in 2023. “While headline inflation has started to decline, it is still elevated, compounded by uncertainties in commodity prices and currency rates. Recent disruptions in financial markets have also exposed global vulnerabilities, with some downside risks for the global economy affecting potentially the dynamism of our export markets,” he said.

“Nevertheless, while food commodity prices are expected to remain high through the first half of the year, we are optimistic this will improve in the latter half of the year. Over the long-term, we remain confident in the prospects of Malaysia, as demonstrated by our next wave of capital investments, with RM1.0 billion planned for the 2023 – 2025 cycle.”

Despite the difficulties that lie ahead, Aranols added that the company is also focused on delivering a solid financial performance while advancing its Environmental, Social and Governance (ESG) agenda. Amongst other initiatives, this includes expanding its NESCAFÉ Grown Respectfully programme to Kelantan with the aim of further developing local coffee farming.

“As we move forward, we are dedicated to accelerating our ESG objectives, with clear plans in place,” he said. This includes reducing the group’s carbon emissions directly by reducing emissions and indirectly through reforestation efforts such as Project RELeaf.

“We will further phase out virgin plastics and support local farmers to transition towards regenerative agriculture through our Farmer Connect programmes. In tandem, to drive sustainable growth, we will continue to uphold the trust of Malaysians by reinforcing our capabilities to deliver products that consistently fulfil consumer expectations for quality, nutrition and taste.”

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