Nestlé will have to raise prices of its food products further this year to offset higher production costs that it has yet to fully pass on to consumers, chief executive Mark Schneider has told a German newspaper.
The increases will not be as steep as they were in 2022, but "we have some catching up to do over the full year," Schneider was quoted as telling Frankfurter Allgemeine Zeitung in an interview published on Sunday.
In the first nine months of 2022, the world's biggest food group, which makes KitKat chocolate bars and Nescafé reported organic sales growth of 8.5%, of which price rises accounted for 7.5 percentage points.
Inflation in many developed economies has been running at multi-decade highs, driven in large part by increases in prices of food and energy.
Nestlé Canada Move
Last week, Nestlé's Canadian operation revealed plans to gradually shut down its frozen meals and pizza operations in Canada over the course of the next half a year. The company stated that this move is a result of its strategy to concentrate on areas that have the potential for long-term business growth and to redirect their resources towards expanding its product lines.
The categories that will receive additional focus are confectionery, coffee and beverages, ice cream, infant foods and supplements, health science products, foodservice, premium waters, and pet food.
Elsewhere, Nestlé Health Science recently announced a $43 million investment to increase the size of its manufacturing facility in Eau Claire, Wisconsin. The company aims to add two additional production lines to enhance its output of ready-to-drink consumer products.