Price increases were inevitable. Inflation “attacked” everyone and the largest food group in the world was forced, in the words of its CEO, Mark Schneider, to reflect this rise in product prices. At least, in part. According to the executive, the international group tried to implement the increase in a “responsible” way, so that the increase did not follow the value of inflation.
The statements were made to the press, on the sidelines of the commemorations of Nestlé’s 100th anniversary in Portugal, marked by the Nestalk conference, under the theme “The Role of Businesses in Leading Sustainability”.
“Everyone had to raise prices because everyone in the value chain was hit by inflation,” explains the CEO, adding that the company “took the time to adjust prices” but believed it was doing it “in a very responsible way.” way” did. Although, he assured, this meant a decrease in gross margin (difference between selling prices and costs), and that Nestlé, contrary to what has been reported and believed by consumers, has not benefited from inflation. On the contrary, Mark Schneider assures: “We are victims of inflation.”
Asked about forecasts of improvement, Nestlé’s CEO said “we are still living in a scenario of inflation” but acknowledged that it is not as strong as last year. On the other hand, it should be borne in mind that the price increase was transversal: “There is not a single category that has not been reached.”
In addition to inflation, the increase in costs, namely raw materials – with particular emphasis on grains – and energy remain high, with the director looking to reduce them, something that will allow sales to be driven by value and not volume. Because nowadays it is clear that the consumer is more price sensitive.
betting on Portugal
With regard to the national market, Mark Schneider expects that “it will continue to be a growth market”. Although without disclosing concrete figures on forecasts for this year, it is known that the company ended 2022 with a total turnover of 677 million euros, which represents an increase of 8.3% compared to 2021.
Anna Lenz, director general of Nestlé Portugal, pointed to the investment in the modernization of the Avanca factory – 25 million euros – and the company will continue to invest in the national market to increase the installed capacity. Although it has not submitted any new specific investment plans for Portugal, Anna Lenz recalls that the group has invested more than EUR 200 million in Portugal over the past three years. In addition, Nestlé plans to turn its Lisbon facilities into a kind of hub for the company’s various digital activities.
It should be remembered that Nestlé recently opened a second business center in the north of the country for the company’s services in Europe, with plans to hire around 100 people this year. Number that according to Anna Lenz is in line with the signatures made in 2022.
Smaller packaging and recycled plastic
If sustainability is an unavoidable path, but it has a cost, then it is clear to Mark Schneider that “the cost of doing nothing will be much higher”. Asked about what Nestlé is doing at that level, the CEO pointed to two areas in which the group is actively working. On the one hand, design smaller packaging that uses fewer raw materials. On the other hand, the group went to the “war” against plastic, betting on recycling or reuse.
Nestlé committed in 2018 to make 100% of its packaging recyclable or reusable. And to achieve this, in a first phase, it will reduce the use of virgin plastic by 20% by 2025 by starting to use recycled plastic.
These are measures, emphasizes the group’s CEO, aimed at achieving the ambitious objectives of being net zero by 2050 and reducing the footprint by 25% by 2025. The road has been set: “We have already made 18% cuts. “
Source: DN
