Nestle SA Reg Shs. Ser. B Spons (ADR) (OTCMKTS:NSRGY) updated on its performance in North America. The growth in the region was dismal. However, the performance in super premium ice cream, coffee creamers, and Petcare was relatively good. The growth in these three sectors was offset by the contraction in the frozen segment.
There have been significant problems in the U.S. frozen food segment for some time. The issues were discussed at Investor Seminar in Boston a few months ago. The problem remains relevant. Nestle intends to change all the elements. It is working on the segmentation of the products with new consumption occasions such as snacking. The new portfolio is expected to fulfill the wants and needs of customers. They want more organic, gluten-free, protein-filled natural products.
Nestle S.A. is implementing the concept of fully-digital across all its communications. Moreover, the measures company has been working on will meet health, wellness and nutrition promise. The recipes will be kept as simple as possible. The re-launch of fresh and natural products comes with investments. It will be incurred in fields of consumer marketing spending and operations. There is a long way to go, but changes will start reflecting over the course of FY2015.
The changing dynamics
Nestle S.A. said that in frozen pizza, the pricing issue and category dynamics resulted in a disappointing performance. There was no improvement in segment despite innovative products launched in the market. The California Pizza Kitchen product did relatively well. The sales of premium range in the ice-cream segment remained subdued. The super premium segment performed well with Häagen-Dazs Gelato. The snacks segment that comprises Outshine bars and Drumstick recovered in 4Q.The Company successfully launched Coffee-mate 2GO. It is a concentrated creamer that was launched in handy pocket-sized bottles. In the Petcare business, Pro Plan, lightweight cat litter, and Dog Chow performed well.