Status: 19.10.2022 3:00 p.m
Nestlé products could become even more expensive in 2023. The largest food producer in the world is planning further price increases. At the same time, the group achieved the largest increase in sales since 2008.
The world’s largest food manufacturer Nestlé has announced further price increases – also in Germany. The group is under great pressure in this country, said Germany boss Marc Boersch with a view to the inflation rate of ten percent in September. They try to cushion the price surge as much as possible with cost efficiency.
“We turn every euro three times over, in the plants, in logistics and administration as well as in advertising expenditure. For Germany, we assume that prices will continue to rise in 2023,” says Boersch. We will do this as responsibly as possible.
Prices up 7.5 percent worldwide through September
Due to inflation at record levels and supply chain problems, purchasing and raw material prices are rising worldwide this year: In addition to energy and transport, packaging is also becoming more expensive. In view of the gas shortage, imports to Germany have become more expensive than they have been for 48 years. In September they rose by 32.7 percent compared to the same month last year. Many manufacturers pass at least part of the higher costs on to customers in order to cushion the increase in raw material, packaging, freight and energy costs.
Nestlé, probably the best-known food multinational, raised its prices by an average of 6.5 percent worldwide in the first half of the year. According to the company, in the first nine months it was 7.5 percent more than what the group demanded from dealers. Negotiations between manufacturers and retailers have been causing conflict for some time. This sometimes leads to delistings and delivery stops – as with Mars products. In addition, households have to dig deeper and deeper into their pockets. Consumer prices in the euro zone rose by 9.9 percent in September, accelerating even faster than recently, the statistics office Eurostat reported today.
“We have delivered strong organic growth and have continued to adjust prices in a responsible manner for inflation,” said Nestlé CEO Mark Schneider. The difficult economic environment is worrying many people and is affecting their purchasing power. “That’s why we make a point of keeping our products affordable and accessible.” Despite the higher prices, pet food, Nespresso capsules and sweets were still in demand with customers.
Biggest increase in sales for 14 years
As a result, Nestlé has been able to grow strongly this year, as the producer of KitKat, Perrier, Purina cat food and San Pellegrino water announced today. From January to September, the Swiss turned over CHF 69.1 billion (EUR 70.4 billion) worldwide. Under our own steam, i.e. excluding acquisitions and exchange rate effects, the increase in sales was 8.5 percent. Nestlé has not achieved such an organic increase for 14 years. Volume increases were 1.0 percent.
Pet products made the largest contribution to growth, but the coffee and infant and baby food businesses also grew strongly. Compared to the first half of the year, Nestlé has thus increased the pace of growth. In the third quarter alone, it reached 9.3 percent. For the year as a whole, the company is now more confident globally and is forecasting organic sales growth of around eight percent. Previously, the goal was seven to eight percent. This is mainly due to the price increases.
On the other hand, the ongoing supply chain problems would have had a braking effect. The Group only presents earnings figures for the first half of the year and at the end of the year. Meanwhile, Nestlé also announced today that it will acquire Seattle’s Best Coffee from Starbucks. The coffee brand sells whole bean, roast and ground coffee to the hospitality and retail sectors.