Food and Beverage Business
Finance

Nomad Foods Focuses on Recovering Lost Volumes and Shelf Space from Price Decreases

Nomad Foods Focuses on Recovering Lost Volumes and Shelf Space from Price Decreases Nomad Foods Food and Beverage Business

Nomad Foods, one of Europe’s largest frozen-foods makers, is targeting the restoration of lost volumes in the face of expected growth next year.

“The company’s CEO, Stéfan Descheemaeker, has highlighted the challenges posed by ongoing inflation, which has led to price increases to offset input-cost inflation, thereby propping up revenue but simultaneously weighing on volumes and market share,” the company said in a statement.

Nomad Foods expects a “return to share and volume growth” with investment in advertising and promotional (A&P) spend, a move intended to counter rising private label competition. Despite this, the company continued to experience volume declines, with volumes down 11.2% as of September.

However, the business saw an organic growth of 1.6% in sales revenue during the third quarter to €764m ($815.3m).

In terms of its long-term strategic goals, Descheemaeker expressed confidence in the company’s plans to regain market share and volume growth next year. He disclosed that there have been retailer discussions in Europe that have resulted in the loss of 2% or more of Nomad Foods’ third-quarter sales, which are expected to reverse in the coming months.

The company also plans to drive future growth through A&P spending as well as innovation in new categories of products. “We believe we’re going to gain market share and get back to volume growth next year,” Descheemaeker stated during a Q&A session.

Overall, Nomad Foods’ profits and gross margin were down in the quarter, with adjusted EBITDA falling 8.8% to €140m and adjusted net profit dropping 18.7% to €73m. The gross margin decreased 70 basis points to 28.4%.

Despite these challenges, CFO Samy Zekhout remains optimistic, saying, “We remain on track to deliver a stable gross margin for the year, supported by an improving volume trend, pricing, strong cost discipline, and robust revenue growth management execution.”

The company has also acknowledged the impact of new treatments such as GLP-1 weight-loss drugs on food volumes but remains confident in its unique portfolio of products that cater to consumers looking to make healthy food choices.

In conclusion, Nomad Foods is adapting its strategy to overcome current challenges, with a focus on driving future growth and regaining market share.

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