LONDON • Nestlé SA and Unilever gave predators targeting the consumer-goods business more ammunition, reporting weak sales for a summer in which North American hurricanes and European rains further undermined already tepid consumer demand for big brands.
The Swiss owner of Nespresso coffee and Poland Spring water reported its weakest nine-month sales since at least 1999, while the Anglo-Dutch maker of Magnum and Ben & Jerry’s ice cream posted third-quarter revenue growth that fell well short of estimates. Both companies said bad weather curbed demand for refreshments, compounding Big Food’s struggle to revive growth.
“The weather has been extremely cold in the US, and to a large extent in Europe,” Nestlé CFO Francois Xavier Roger told reporters on a call. Referring to the company’s water brands, he added, “it’s a business that can be seasonal, especially in the summer, so it certainly didn’t help us”.
Unilever’s shares fell as much as 4.5% yesterday in Amsterdam, while Nestlé was down as much as 1% in Zurich.
The setbacks come as activist investors and potential acquirers take aim at the sector, with Dan Loeb’s hedge fund Third Point building a stake in Nestlé after Unilever fended off an unwanted approach from Kraft Heinz Co. Along with Nelson Peltz, recently rebuffed in a bid for a board seat at Procter & Gamble Co, they’re pressuring food and personal-care giants to lift profit margins and revamp slow-growing portfolios as consumers seek niche brands and fresh food rather than packaged products.