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Nestle is largely “immune” with the effect of tariff, The company’s chief executive said, With the world’s largest food producers benefiting from their more local manufacturing footprints.
Laurent Freix told reporters, while lean food manufacturer is closely looking at global trade and tariffs, benefiting from the fact that most of the products sold are manufactured in their respective markets. For example, in the US, Nestle produces around 90% that it sells domestically.
“We are in a unique, privileged position, giving us flexibility for important movements,” Freaks, who took over as CEO last September, Told reporters After the release of Nestle’s fourth quarter earnings.
Food and beverage manufacturers are closely following the effect that can be on their businesses from the Trump administration. Coca-Cola CEO James Quincy said earlier this week that drink manufacturer Aluminum cans can switch over plastic bottles more than cans If the input cost for commodity becomes very expensive.
For Nestle, The Switzerland-based company has a lot of mechanics to reduce any tariffs that we see that we come through, it is pricing, it is changing our sourcing, “according to CFO Anna Manz.
He said that Nestle’s guidance for 2025 is not a factor in any influence from tariffs. Although it is difficult to predict what is going to happen with the trade policy, the Manz warned that any new duty “can relatively charge the inflation environment quickly.”
Tariffs will increase the cost at a time when CPG companies already feel pressure from a long period of inflation. Businesses have raised prices to promote sales and make up to high expenses, but those tricks have forced consumers to cut back to private labels or more innovative brands to purchase or switch back.
Nestle has trouble coming back to consumers, especially in pizza -like frozen objects. The company recently reduced pricing and took steps to improve quality in the US in an attempt to win customers back.
Nestle said it plans to increase further prices for cocoa and coffee, struggling two items with record-high prices. Manz told reporters that Nestle increases prices for products with coffee or cocoa, depending on how consumers react, although he said “both are very flexible categories.”
On Thursday, the company reported organic sales for 2024, which increased by 2.2%, a faster fall by 7.2% in the previous year. Sales fell from $ 103 billion to $ 101 billion (91,354 billion Swiss Frank) in 2023.
Nestle stated that North America, which is responsible for more than a quarter of its sales, was “disappointing” during the year due to coffee creamer and weakness in frozen foods. Coffee creamers were affected by lack of supply which should improve the following Inauguration of a new plant in Arizona recentlyThe company said.
Nestle estimated “improving biological sales growth” in its overall business this year as the recent initiative caught. Initial indications are that changes are gaining speed, with an increase in sales in 2024 in the first six months in the second half of 2.1% to 2.3% to 2.3%.
,We are starting [to invest] In our development stageIn our innovation, big stakes, and the organization align … and moving in the right direction, ”Freix said. “Although it takes time to move the needle, you will see Nestle moving in the right direction.”
Nestle announced plans to cut at least $ 2.8 billion by 2027 last November.Invested in other parts of its business with savings. At that time, Nestle said that it would separate its water and premium beverages unit in a standalone business, but Freix said that the company is no longer looking at the division to sell.
The segment, which includes brands such as perirs and Sanpelgrino, represents less than 4% of its global sales and has recently fought. The company remains open to divide the share of the business or enter into partnership, said Freix said.
