Add Nestle, the world’s largest packaged-food maker, to businesses that say price hikes are inevitable in the face of rising costs. Yes, that means you’ll pay more for KitKats.
“It is a safe assumption that our input cost increases for 2022 will be higher than 2021, that is something that we have to reflect in our pricing,” Mark Schneider, Nestle’s chief executive, told reporters and financial analysts.
“There is almost no place in the company that is exempt of inflation now,” he warned. “Some of these things you can hedge against, some not.”
The announcement underlines the increasing economic burden faced by consumers as prices for many goods remain at a 40-year high.
It also highlights the task ahead for the Federal Reserve, which has indicated it will raise interest rates multiple times this year — likely beginning next month — in an effort to bring inflation under control.
For businesses, COVID-related supply issues and shortages have meant higher production costs, which are now being passed along to customers.
Nestle raised its prices by 3.1% in the fourth quarter. In the previous quarter, it jacked up prices by 2.1%. The Swiss company owns dozens of popular brands, including Nepresso, Nesquik and Purina pet food.
Yet even as it boosts prices for most of its products, Nestle says the pandemic has been great for its coffee sales as more and more people caffeinate at home amid remote work.
“While some of that will lessen now with the pandemic coming to an end, some of it is also going to stay,” Schneider said, describing the jolt to coffee sales as an “at-home revolution.”
Still, higher KitKat prices? Is there no end to our suffering?