Global food giant Nestle warns of potential price hikes for popular products like Nescafe coffee and KitKats due to escalating costs of cocoa and coffee. Despite reporting strong sales growth, the company acknowledges the need to adjust pricing to offset rising input prices.
Nestle has cited rising costs for both cocoa and coffee as the reason for a potential price increase for its products, including Nescafe coffee and KitKats. This warning comes despite Nestle announcing better-than-expected sales growth for the year. The Swiss food giant stated that it would first attempt to mitigate the impact of rising input costs before passing on any price increases to consumers.
However, Nestle's CEO, Laurent Freixe, acknowledged that when input costs continue to rise for coffee and chocolate, pricing adjustments will be necessary. He emphasized their strategy to initially absorb the impact of input costs. Nestle's CFO, Anna Manz, added that further price increases are expected in 2025, potentially posing challenges for customers.The company's strong performance in 2024 was attributed to increased advertising spending on popular products and a restructuring of Nestle's water business. This resulted in a six percent surge in share prices on Thursday. Nestle's extensive product portfolio encompasses a wide range of items, including Maggi bouillon cubes, Gerber baby food, and Nesquik chocolate-flavored drink.Despite this positive performance, Nestle has faced consumer pushback against price hikes implemented to combat inflation. Customers have opted for cheaper alternatives as prices have risen. Mr. Freixe acknowledged the challenging macroeconomic environment and soft consumer sentiment in his statement. A Nestle spokesperson confirmed that declining global demand had led to manufacturing complexities, resulting in the discontinuation of a specific product.
Nestle Price Increase Coffee Cocoa Input Costs Inflation
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