Nestle<\/a> is raising prices, reformulating products and cutting items consumers are unwilling to pay more for as it tackles the effects of higher energy, \u200bfreight and raw material costs following the conflict in the Middle East, CEO Philipp \u200cNavratil told Reuters on Wednesday.<\/p>\nWhile the world’s biggest packaged food maker has seen little direct impact on sales from the six-month-old U.S.-Israeli war against Iran, Navratil said the conflict was contributing to inflationary pressures faced by suppliers.<\/p>\n
The Middle East accounts for about 2% to 3% of the Swiss company’s roughly 90 billion Swiss francs ($111 billion) total sales, meaning the direct impact on sales has been limited.<\/p>\n
“But you will have primary effects in terms of inflation in what we buy, in terms of input costs,” he said.<\/p>\n
The U.N. Food and Agriculture Organization (FAO) has\u00a0warned\u00a0the world could be heading towards another bout of \u200bfood inflation. The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 131.1 points in July, up from 130.3 in June and the highest \u200breading since January 2023.<\/p>\n
Nestle, which has over 2,000 brands including Nescafe, Maggi and KitKat, recently sold a stake in its bottled water business and is also exiting\u00a0vitamins\u00a0as Navratil has been tasked with streamlining the company’s focus on core brands.<\/p>\n
Navratil said, however, that\u00a0Nestle\u00a0may also buy brands as it reviews its portfolio periodically.<\/p>\n
“That doesn’t mean that\u00a0Nestle\u00a0is just divesting things. We are also, as always, open to acquire things that are strategically important,” he said, without giving details.<\/p>\n
On a separate issue, Navratil said food manufacturers should be involved in discussions over proposed front-of-pack sugar, salt and fat warning labels in India.<\/p>\n
Reuters\u00a0reported\u00a0in August that companies were lobbying against such warnings, according to documents and recordings it has reviewed.<\/p>\n
Navratil said\u00a0Nestle\u00a0has removed thousands of tons of sugar, salt, and fat from its products, but argued that labeling has to be done the “right way” and should reflect portion sizes.<\/p>\n
Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Nestle Coffee-Mate is sold on a store’s shelves on February 18, 2016 in New York City. Nestle recently…\n","protected":false},"author":2,"featured_media":612036,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[6461,114,357,184,1455,85,87,46,105437,6462,2201],"class_list":["post-612035","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-breaking-news-business","tag-business","tag-business-news","tag-economy","tag-food-and-drink","tag-il","tag-iran","tag-israel","tag-nestle-sa","tag-retail-industry","tag-war"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/612035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=612035"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/612035\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/612036"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=612035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=612035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=612035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}