Trade: Serious consumer: Food giant Nestlé shrinks

The world’s largest food group Nestlé wants to save in 2024 after a decline in profits when purchasing and invest in important brands – including for coffee and animal feed. This was announced by the new CEO Laurent Freixe in Vevey in Switzerland. He cited new Nespresso products or luxury feed for cats as examples. For Nestlé, interesting growth areas are also the business with losing weight and women’s health.

Like other consumer goods manufacturers, Nestlé has increased prices in recent years in order to pass on increased raw material costs to customers. However, in view of the inflation, consumers are increasingly relying on cheap own brands of retailers or buying at the discounter. This makes it more difficult for the producer of brands such as Kitkat, Maggi and Nespresso to pass on increased costs.

Are smaller packaging sizes come?

Germany boss Alexander von Maillot said in Frankfurt that he continues to expect high cost pressure for coffee and cocoa. One does not want to pass on all price increases to customers unchanged. He announced higher investments in advertising. He did not rule out smaller packaging quantities as with competitors to absorb price increases.

Price pressure is troubled by Nestlé

Last year, Nestlé fought with a weak demand, high costs and the strong franc. The global turnover fell by 1.8 percent last year to CHF 91.4 billion (EUR 96.5 billion). The bottom line was that profit fell by 2.9 percent to CHF 10.9 billion.

Nestlé boss Freixe had already announced savings of around CHF 2.5 billion in November until the end of 2027 to finance higher investments in marketing. Freixe sees a large lever in shopping. Nestlé also plans efficiency increases. It remained unclear whether the strokes occur in the train.