Consumers Buy Less Water in the time of recession. This had affected Nestlé’s revenue growth. The bottler of Perrier and Vittel Nestle SA had seen a sluggish revenue growth in the year 2009. According to the Company it is due to the changing buying behavior of the consumers at the time of recession. The recession led consumers don’t want to spend more on bottled water.
Moreover private label is going to be the single biggest competitive threat to branded bottled water like the world’s largest food company Nestle.
Apart from acquisitions, divestments and currency swings the revenue of the company had rose 4.1 percent in the year. But this year it is going to a tough situation for the company. The net income of the company had dropped to 10.4 billion francs and this had beaten the 10.2 billion- franc median estimate, on lower capital gains. Nestle gets more than a tenth of its sales from bottled water.
But for the first time after four years the company had missed its long-term sales target of annual growth between 5% and 6% of beating the goal.