FMCG giants under pressure
Although Nestlé's half-year sales increased by 2.1 percent, analysts expected an increase of 2.5 percent. Unilever sales growth of 3.9%. was also lower than the forecast of 4.3%. Both FMCG giants immediately lowered their result expectations for the entire year: Nestlé is currently counting on 3%. growth, Unilever is slightly more positive, with its growth target ranging from 3 to 5 percent. – reports retaildetail.eu.
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Inflation is still a concern, prices are not rising that fast
Inflation continues to worry brand manufacturers: Nestlé in particular claims that due to consumers switching from the group's products, it had to slow down the pace of price increases earlier than desired. The company's CEO, Mark Schneider, said shoppers are too often looking for discounts as lower-income people continue to feel the pressure of the cost of living crisis.
Margins still thin
Unilever managed to increase sales volumes and margins were higher than expected. CEO Hein Schumacher noted that the slowdown in inflation allows customers to return to strong brands such as Knorr. However, he is afraid that margins will grow slower in the second half of the year.
Both FMCG giants promise to invest more in their brands, but they will do it in completely different ways. While Nestlé is looking to launch more new products, Unilever's motto is "fewer things are better." The company is reorganizing to fully focus on its thirty main brands. It has already laid off 7,500 workers and is also preparing to divest its ice cream business.
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And Reckitt Benckiser on Wednesday also announced plans to explore options for its troubled nutrition business and sell its portfolio of home care brands by the end of 2025.