Nestle, the world’s largest food company, raised prices nearly 10% in the first quarter with only minimal loss in volume.
Nestlé raised prices at close to the fastest pace in more than three decades last quarter but sacrificed only a modest slice of its sales volume, as consumers proved willing to pay more for its packaged food and drinks.
Results on Tuesday from the world’s biggest food company, whose products include Aero chocolate bars, Perrier sparkling water and Nespresso coffee, showed that it pushed prices up by an average of almost 10 per cent in the first three months of the year.
Historic increases in the cost of raw materials have left consumer goods companies with a dilemma over how much of that financial pain to pass on to retailers and shoppers. Nestlé shares have declined almost 8 per cent over the past year.
In a boost for the Swiss-based group, its so-called real internal growth (RIG) — a proxy for sales volumes — dipped only 0.5 per cent in the first quarter, a notable improvement from a 2.6 per cent decline in the previous quarter, when results disappointed investors.
Chief executive Mark Schneider said that Nestlé had “worked diligently to protect volume”. He added that Nestlé’s price rises were “responsible” and had helped the company deal with “ongoing pressures from two years of cost inflation”.
The quarterly volume improvement was led by infant nutrition products and confectionery, especially KitKat bars. By geography, the recovery was strongest in North America.
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