KitKat maker Nestlé plans to hike prices due to rising cost of ingredients
Having a break is about to get a little more expensive.
Nestlé, the maker of KitKat and Nescafé instant coffee, has planned another price hike for its products this year.
This is due to rising costs of ingredients causing the food corporation’s 2022 profits to miss market forecasts, according to CEO Mark Schneider.
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“Last year brought many challenges and tough choices for families, communities and businesses,” he stated in a company report. “Inflation surged to unprecedented levels, cost of living pressures intensified, and the effects of geopolitical tensions were felt around the world.”
The conglomerate already raised prices by 8.2% last year to “reflect significant cost inflation,” but it wasn’t enough to offset the increased costs of ingredients.
“Our gross margin is down about 260 basis points – that is massive. That is after all the pricing we have done in 2022,” Schneider told Reuters on Thursday.
This is the second time this month that the food giant has announced updates to its business plan.
On February 2, Nestlé revealed that it will stop selling frozen meals and pizza in Canada.
It cited a reinvestment strategy as the reason for the exit.
The cuts will help Nestlé focus on categories that “support long-term business growth.” These include ice cream, coffee and drinks, confectionery, pet food, infant foods and supplements, health science products, food service, and water.
The complete exit of Delissio, Stouffer’s, Lean Cuisine, and Life Cuisine will span over six months.
“Nestlé Canada attributes much of its long-term success to its ability to adapt and evolve within the industry,” said John Carmichael, Nestlé Canada’s president and CEO. “We look forward to continuing to offer Canadians great Nestlé products now, and in the future.”
The company also said in its press release that it does not have a factory in Canada that’s dedicated to manufacturing its pizza and frozen meal products. Nestlé will work with its Canadian retail partners to execute this exit plan.
With files from Daily Hive staff.
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