What Nestlé and other food giants are saying about inflation

Nestlé, the world’s largest packaged food seller, joined other food and beverage giants in blaming a drop in sales this past year on inflation.

Switzerland-based Nestlé, the maker of Kit Kats, Nescafé, and Nesquik, reported Thursday that its sales volume in 2023 dropped 0.3%, according to its latest quarterly earnings report. At the same, the company hiked its prices an average 7.5% this past year.

This comes as other food and beverage giants reported similar results.

French yogurt maker Danone also reported today a 0.4% drop in its sales volume in 2023 — the company hiked its prices an average 7.4% throughout the year. Its revenue in 2023 fell 0.2%.

This month, PepsiCo and Kraft Heinz also reported a dip in demand as more cash-strapped consumers are looking to save money.

What food and beverage companies are saying about inflation

• “Unprecedented inflation over the last two years has increased pressure on many consumers and impacted demand for food and beverage products,” Nestlé CEO Mark Schneider said in a press release Thursday.

  
  

• “Regardless of the income level, that consumer is looking for value and they continue to be under pressure,” Kraft Heinz CEO Carlos Abrams-Rivera said Wednesday on a call with investors. “What we see is [that] low income consumers are actually shopping more at places like dollar stores, higher income consumers more at club stores.”

  
  

• “Consumer budgets have been affected by elevated borrowing costs and lower personal savings, which have driven preferences towards smaller pack sizes and immediate consumption channels,” PepsiCo said in a statement on Feb. 9.

Nestlé’s 2023, by the numbers

For the full-year 2023, Nestle’s net profit grew about 20% to 11.2 billion Swiss francs ($12.7 billion), compared with 9.27 billion Swiss francs ($10.5 billion) in 2022.

The company’s net sales in 2023 fell 1.5% to 93 billion Swiss francs ($106 billion), from 94 billion Swiss francs ($107 billion) the prior year.