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Nestlé Philippines Expects Surging Demand To Ebb As Buying Power Sinks

The current surging demand for its products is expected to be short-lived, Nestlé Philippines says, because many Filipino consumers have lost income because of the pandemic and the enhanced community quarantine (ECQ). In the near term, the company is ramping up production as it faces supply line shortages and a spurt in demand for food products among panic-buying consumers. The company had increased production to 80 percent from 60 percent in recent weeks after demand surged in March and April. Shipping delays, meanwhile, had caused a decrease in output. To address supply challenges, the company has put safety measures in place so that employees can report for work, and it is planning further ahead when ordering raw materials. To buoy demand, the company is considering adding free packs in products and increasing promotional strategies, an executive said.

"Nestlé ramps up production as supplies run low", Business World, May 05, 2020

Q1 Profit Slides As Nestlé Pakistan Posts Hike In Revenues

Nestlé Pakistan posted healthy first quarter (January to March) revenues of $189 billion, a 2.6 percent increase over last year, despite COVID-19 lockdowns that severely impacted the sales of juices and water as well as products for the out-of-home channel. The Afghanistan border closure also had a major impact on exports. Despite the rise in revenues, net profit for the same period slid 33 percent because of higher financing costs, currency devaluation, higher input and energy costs, and the imposition of sales tax and federal excise duties on milk powder and beverages. In a statement, the company pledged to prioritize the health and wellbeing of its employees, foster business continuity, and support communities with relief efforts.

"Nestlé Pakistan announces financial results – boasts 29.8 billion in revenue", Global Village Space, April 30, 2020

CCEP Q1 Revenue Declines Four Percent

Coca-Cola European Partners plc (CCEP) reported that FY 2020 first quarter revenue slid four percent from a year ago to $2.7 million. Challenging comparables, some customer disruption due to a planned pricing strategy, and the initial impact of the COVID-19 pandemic all played a part in driving comparable volumes for the period down four percent. Revenue per unit case increased 1.5 percent, thanks to favorable price and promotions offset by negative channel and pack mix. The company is reducing discretionary spending in trade marketing, promotions, merchandising, incentives, seasonal labor, travel, and meetings, representing a potential fiscal year cost reduction of $218 million to $272 million. CCEP is also delaying some discretionary capital expenditure, resulting in a 2020 capex of about $381 million.

"Coca-Cola European Partners Q1 Revenue Down 4 percent - Quick Facts", Nasdaq, April 28, 2020

Microsoft Wins Business Software Contract With Coca-Cola

Microsoft Corp. has won a five-year deal with Coca-Cola to supply business software, including its Teams chat app and Dynamics 365, a suite of Microsoft tools that competes directly with Salesforce.com Inc. Microsoft has been working to win more customers for its specialized software such as apps used by customer service and sales employees. The company said Coca-Cola will use Microsoft technology to pull together information several internal systems, using artificial intelligence to fetch data from them and answer questions. A Coca-Cola information technology exec said in a statement that Microsoft’s software would help the company by “replacing previously disparate and fragmented systems” and will eventually be used to help quickly answer questions from the beverage maker’s customers, which include major retailers and grocers.

"Microsoft wins five-year deal with Coca-Cola to supply business software", Reuters , April 27, 2020

COVID-19 Bashes Coca-Cola Global Sales Volumes

Coca-Cola reported flat first quarter revenues as global sales volumes slid 25 percent this month due to COVID-19 disruption. Q1 revenues were $8.6 billion, one percent less than the same period last year. Operating income declined by two percent to $2.38 billion. Unit case volumes of sparkling soft drinks declined two percent in the quarter, while juice, dairy and plant-based beverages were down six percent and tea and coffee volume declined six percent. The company said that volume at the end of February was growing by three percent – excluding China – and was on track to achieve its full-year 2020 targets. But disruption due to COVID-19 in global markets from March significantly impacted sales, as social distancing measures and quarantine orders were put in place by governments around the world.  The company expects continued reduction in away-from-home activity will have a “significant impact on second-quarter results.”

"Coca-Cola sales volume declines 25 percent in April due to COVID-19 impact", FoodBev Media , April 21, 2020

Danone Surprises Market With Healthy First Quarter Financials

Danone posted first quarter like-for-like net sales growth ahead of expectations at 3.7 percent to $6.8 billion, as consumers stockpile and increase their at-home consumption. The company withdrew its full-year financial guidance for 2020 owing to the lack of visibility caused by the coronavirus pandemic. The Waters business reported a drop in net sales of 6.8 percent on a like-for-like basic due to closures in food service. About 40 percent of the division’s sales are normally consumed away from home. Its Essential Dairy & Plant-Based (EDP) unit recorded strong performance by its plant-based brands, Alpro in Europe and Silk in North America, and its top essential dairy brands such as Actimel, Danone and Danette in Europe, and Horizon and Two Good in the U.S.

"Danone records stronger than expected first quarter results", FoodBev Media , April 21, 2020

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