The world’s largest food and beverage company predicts an even more significant rise in prices, amid higher costs for raw materials and transport. Nestle will raise the prices of its goods in the second half of the year. In the first half of 2021, the company increased prices by 1.3%. The forecast for the second half is to increase prices by about 2% to offset the increased costs.
According to Nestle CEO Mark Schneider, inflation has affected the company. “There has been virtually no inflation in the last few years, and then prices have risen sharply.”, he was quoted as saying by CNN. However, Schneider commented that he considers inflation to be a transient phenomenon.
Nestle has raised its sales growth forecast for 2021 between 5% and 6%. The operating profit margin from main trading activity is currently expected to be around 17.5%.
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According to Nestle Bulgaria CEO Petar Stoilov, in a pandemic environment, Nestle Bulgaria achieved organic growth of 9.6% in the first half of the year. This is due to the good performance of almost all categories of the company.
There is also a recovery in consumption outside the home, where there is double-digit growth compared to the same period in 2020. “These data point to the normalization of the business environment”he thinks.
Not only Nestlé, but also other large companies such as General Electric, Anheuser-Busch InBev, Unilever warn of rising raw material costs amid a pandemic recovery. Demand for some products has risen sharply since travel resumed and returned to the office.
Last week, Unilever announced it was raising prices in various markets and product categories. There is a significant increase in soybean oil prices, which rose by 20% in the last quarter and by 80% on an annual basis. Palm oil prices have jumped 70% above average.
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