It may no more be business as usual for the world’s leading food and nutrition company, Nestle, as low profits forces it to put-off earlier sales and profit forecast.
The company which manufactures KitKats, Nescafe and Purina pet food, has disclosed its plans to drastically cut its operational cost following its earlier release of embarrassing profit figures.
Nestle had in 2016, recorded a net profit of 8.5bn Swiss francs (£6.78bn) representing an over 6.5% fall from 9.1bn declared the previous year, and a wide gap from 9.59bn francs net profit earlier projected by market analysts.
The low profit returns has been blamed on a persistent food inflation in majority of Nestle’s markets and declining demand for the company’s products in emerging markets like Ghana where it faces fierce competition from local food & beverage industry players.
To stay afloat through this challenging times, Nestle has readjusted its sales growth target to be between 2% and 4% for the current year, letting-go of its traditional "Nestle model" of 5-6% organic growth, which usually doesn’t include subsidiary firms in its portfolio.
Commenting on the new strategy, Nestle’s CEO, Mark Schneider, who is barely a month old on his new role stated that the company’s "2016 organic growth was at the high end of the industry, but at the lower end of our expectations."
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