Nestlé has consistently grown its revenue in the last 23 years, with related CAGR printing at 19.2%. This revenue momentum was taken up by several notches in FY'21 (+22.6% YoY) and Q1'22 (26.3% YoY). The recent traction in topline growth mostly reflects:

  • Brand visibility and efficient distribution strategy: Nestlé’s unique products are at the "Top of mind" to many Nigerians. Asides from being one of Nigeria's oldest FMCG institutions, the company has also positively increased the awareness of its products via initiatives such as the free product distributions in academic institutions. To buttress Nestlé’s success on the brand visibility front, we highlight a scene from the movie "Captain America: Civil War", wherein the makers used pictures of Maggi cube and Milo to depict a typical Nigerian environment. Thus, it would appear that the Nestlé’s brand is now largely synonymous with the Nigerian market.
  • Product Innovation: To improve the quality of its product design, packaging, and composition, Nestlé embarked on the "reiMAGGIne" journey for its Maggi cubes in 2020. This initiative led to the launch of its new Maggi product (Maggi Signature Chicken powder), with more familiar and common ingredients and minimal processing. Similarly, Golden Morn experienced a reformation, with some of its pillow packs replaced with stand-up pouches for better merchandising. In 2021, Nestlé Pure Life Sparkling water was launched, while in 2022, Nescafe Malty, a blend of Nescafe 3-in-1 and malt, was introduced to the market. In our view, the company's ongoing product innovations are likely to remain supportive to topline in FY'22 and across our forecast horizon.