KitKat, other Nestle products set to get costlier
The world's biggest food group, Nestle, is set to hike prices this year. The chief executive officer of the group has said that the price surge is necessary to offset the impact of increased commodity costs. Consumer inflation is at a record high in many countries following the impact of the Ukraine war and the pandemic. The global supply chain logjams, because of Covid, were further aggravated by Russia's invasion of Ukraine last year, which led to a shortage of essentials in many parts of the world.
The multinational food and drink processing conglomerate is known for its widely consumed brands, such as Maggi instant noodles, Nestle coffee and KitKat chocolate bars. Prices were hiked last year but that could not fully tackle the increased costs for ingredients on margins, as per reports. In 2022, the company's reported sales increased 8.4 per cent to 94.4 billion Swiss francs ($102.31 billion).
Many consumer goods makers, including Unilever, have been increasing prices to deal with the inflation aftermath. Amid increased pressure on margins and profitability, the surge is set to continue this year.
Nestle Chief Executive Mark Schneider made the latest announcement - which came after the corporation missed its 2022 profit market forecasts - on Thursday (February 16). "Our gross margin is down about 260 basis points - that is massive. That is after all the pricing we have done in 2022," Schneider told reporters.
"Last year brought many challenges and tough choices for families, communities and businesses. Inflation surged to unprecedented levels, cost-of-living pressures intensified and the effect of geopolitical tensions were felt around the world," he further underlined.