Nestlé Raises Prices by Nearly 10%

Company says ‘significant cost inflation’ has attributed to a 9.8% cost increase so far this year.

April 26, 2023

NEW YORK—CNBC reports that Nestlé, which raised prices by 8.2% in 2022, has already raised prices by nearly 10% in Q1 2023

The Switzerland-based company noted in its three-month sales report for 2023 that pricing growth was 9.8%, reflecting significant cost inflation, while real internal growth (RIG) was -0.5%.

“Nestlé delivered strong organic growth in the first quarter, as our teams worked diligently to protect volume and ensure resilient mix. Portfolio optimization efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation,” said Mark Schneider, Nestlé CEO.

Organic growth was 8.6% in developed markets, led by pricing. Organic growth in emerging markets was 10.3%, driven by pricing and positive RIG. By product category, Purina PetCare was the largest contributor to organic growth, fueled by strong momentum for science-based and premium brands Purina ONE, Purina Pro Plan and Friskies.

Coffee saw high single-digit growth, with positive sales developments for Nescafé, Starbucks and Nespresso.

Sales in confectionery grew at a double-digit rate, with strong growth for KitKat and seasonal products.

Nestlé also reported on its sustainability initiative around packaging. At year-end 2022, 81.9% of the company’s plastic packaging was designed for recycling. By 2025, Nestlé aims to reach over 95%. Ultimately, it aims for 100% reusable or recyclable packaging and a waste-free future.

For the rest of 2023, Schneider said that the company expects organic sales growth between 6%-8% and underlying trading operating profit margin between 17%-17.5%.