Nestlé reported a meaningful recovery in chocolate volumes during the first quarter of 2026, offering the clearest industry signal yet that consumer demand for confectionery may be stabilising, even as cocoa input costs remain above historical norms.
The Swiss food and beverage giant posted organic sales growth of 3.5% in the three months to March 2026, comprising real internal growth of 1.2% and pricing of 2.3%, beating analyst expectations of 2.4% organic growth overall. Its Food and Snacks division, which houses the company’s confectionery portfolio, delivered organic growth of 4.2% supported by real internal growth of 2.1%, reflecting a more balanced mix of volume recovery and pricing contribution than the company has seen in several quarters.
Confectionery was the standout performer within the division, with the company reporting high single-digit organic growth in chocolate. That figure represents a sequential improvement in real internal growth, marking a departure from the exclusively price-led expansion that has defined the category across the broader industry since cocoa futures surged to record levels in 2024.
KitKat drove gains across multiple regions. In Asia, Oceania, and Africa, the brand led confectionery growth. In the Americas, recovering chocolate volumes in Brazil supported momentum, while Europe recorded a positive confectionery contribution, again anchored by KitKat, even as overall Food and Snacks performance in that region remained modest.
Chief Executive Philipp Navratil said the quarter demonstrated that the company’s strategy of leading with real internal growth was delivering, with results described as strong across most zones and categories.
The wider picture on pricing is also evolving. Nestlé acknowledged that pricing is now moderating as it moves past the base effect of earlier increases, a shift that reflects the broader cocoa cost pass-through cycle beginning to ease. For the chocolate supply chain, that is a double-edged signal: it points to more sustainable demand, but it also raises the question of margin protection if cocoa prices remain structurally elevated.
Total reported sales fell 5.7% to CHF 21.3 billion due to a 9.3% currency headwind, underscoring how exchange rate movements are masking an otherwise improving operational picture. Emerging markets were the strongest regional performer, posting organic growth of 6.8% with real internal growth of 2.9% outside China.
Nestlé maintained its full-year outlook, guiding for organic growth of approximately 3% to 4% with real internal growth expected to accelerate compared with 2025.
For cocoa-producing economies, the results carry a cautiously positive implication. Volume recovery in branded confectionery, if sustained, would indicate that the demand destruction feared during the height of the cocoa price rally has been less severe than projected, particularly for large manufacturers with well-established consumer loyalty. Whether that momentum holds will depend on the trajectory of input costs, pricing discipline, and consumer sentiment across key markets in the quarters ahead.
