Innovation boosts Nestlé confectionery business

INNOVATION in its confectionery products has helped Nestlé grow market share in the first half of the year, the business said.

The global business announced it had made sales of £33.8 billion, representing organic growth of 7.5 per cent, which Paul Bulcke, CEO, called “good progress” in a period characterised by political and economic instability, natural disasters and rising raw material prices.

Nestlé’s UK confectionery business increased market share from 15.5 per cent of the market in 2010 to 16.5 per cent, which Paul Grimwood, chairman and chief executive of Nestlé UK and Ireland, said was driven by innovation.

Aero, which is made in York and recently celebrated its 75th anniversary, was one of the strongest performers, the business said, launching three new products - Aero Biscuit, Aero Caramel and Aero Orange block – over the year. This follows the company’s £20 million investment in 2008 on a new Aero plant at its York factory to make Aero bars and Bubbles.

Product innovations have also been introduced in its Rowntree range, with new Sour Pastilles, Very Berry Jellies, and Jelly Aliens. Milky Bar and Rolo new sharing bags helped the brands achieve 13 per cent and 24 per cent growth respectively in the year to date.

Paul Grimwood said: “The first six months of 2011 was just as challenging as we expected, as household budgets across the country continue to be squeezed. However, we are pleased with the progress we have made as we continue to grow market share in nearly all of the categories we operate in. Our focus on driving innovation continues to pay off.”

Nespresso, which has its customer service centre in York, achieved double-digit organic growth, having continued to perform at a high level around the world despite intensified competition, the company said. The business has opened Nespresso boutiques in St Petersburg, Stockholm and Barcelona, and expects to exceed 250 boutiques by the end of the year.