Organic Growth Reported at 5.6% in Emerging Markets
Nestle follows a January-December financial year.
The strongest performances were in Europe and South East Asia, besides Africa, he said. Organic growth for the Asia, Africa, Oceania (AOA) zone, which Nestle declares as a combined entity in earnings, was 2.1% compared with 0.5% in the preceding quarter.
As reported by ET last month, Maggi has regained market share to return to its leadership position in the noodles segment, though this is significantly lower than what it was before it was banned last June.
The Vevey, Switzerland-headquartered firm reported a three-month organic growth of 3.9%. While organic growth was 2.5% in developed markets, it stood at 5.6% in emerging markets.
In its 2015 annual earnings, Nestle had said that growth of the AOA market was at 0.5%, negated by the Maggi noodles issue in India.
The Food Safety & Standards Authority of India, the country’s regulator, had banned Maggi following allegations that the popular snack contained lead in excess of permissible levels and that there was mislabeling related to flavour enhancer monosodium glutamate (MSG).
The ban resulted in the India arm of the Swiss foods maker reporting a 17.2% decline in net sales for the year ended December 2015, while net profit fell to .₹ 563 crore, from .₹ 1,185 crore in the previous year. The ban forced Nestle to take a hit of .₹ 450 crore as it destroyed more than 30,000 tonnes of Maggi noodles and the firm reported its first loss in three decades in the April-June quarter of 2015.
Nestle India chairman Suresh Narayanan told ET last month that the Maggi noodles brand had regained the top slot in market share at over 48%, citing market researcher Nielsen. However, the category is now estimated at a little over .₹ 2,000 crore, down from .₹ 3,000 crore before the ban.
Following multiple clearances, first by the Bombay High Court and government labs, Nestle resumed sales of Maggi noodles in November. “Maggi used to contribute close to 30% of our portfolio before the controversy. At the moment, it’s slightly less than a fourth of the turnover because the full traction hasn’t happened. But it’s quickly catching up,” Narayanan had said.
The ban forced Nestle to take a hit of 450 cr as it destroyed more than 30k tonnes of Maggi noodles