Nestle is leaning on a familiar toolkit: raise prices, rework formulas, and cut products that consumers won't trade up for. Navratil tied these moves to rising energy, shipping, and ingredient expenses that have come in the wake of the conflict in the Middle East. He said the war has not dented sales much directly, but it is feeding into supplier costs. "But you will have primary effects in terms of inflation in what we buy, in terms of input costs," he said.
As the Middle East contributes only 2% to 3% of Nestle's total sales - about 90 billion Swiss francs, or $111 billion - the immediate hit has been contained. The broader backdrop is getting tougher, though. The U.N. Food and Agriculture Organization cautioned the world could be heading for another round of food inflation. Its Food Price Index averaged 131.1 points in July, compared with 130.3 in June, the highest since January 2023.
Nestle - with a portfolio topping 2,000 brands, such as Nescafe, Maggi and KitKat - has lately divested a share of its bottled water arm and is leaving the vitamins segment as Navratil focuses the company on core brands. He added the door is open to buying, too: "That doesn't mean that Nestle is just divesting things. We are also, as always, open to acquire things that are strategically important," he said, without sharing specifics.
On labeling, Navratil said food makers should be part of talks over India's plan for front-of-pack warnings about sugar, salt and fat. In August, Reuters said companies were lobbying against those warnings. He said Nestle has cut back by thousands of tons on sugar, salt, and fat in its products, and argued any labels must be done the "right way" and reflect portion sizes.
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If you're noticing higher grocery tabs or new versions of familiar products, this is why: brands are passing along pricier inputs and simplifying their lineups. Nestle is also pruning and occasionally adding brands as it reassesses what fits best in its core. For household budgets, that can translate into shifting prices on everyday staples and more reformulated options on the shelf.
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