Nestle's Short-Term Outlook Looks Challening but Long-Term Outlook Intact

Although Nestle's performance during the pandemic has been nothing short of stellar, we believe the main drivers of this outperformance have been fueled by pandemic-led lockdowns—millions of households have adopted pets, and consumption of coffee at home has been boosted by work-from-home trends. While we don't expect a complete reversal of these trends in the future, we do expect outperformance to be less pronounced in the years ahead. We expect organic growth to slow toward the 5% level by the end of our explicit forecast period.