Nestlé, the international food giant behind KitKat, Aero, Yorkie, and other favorite snacks, has announced that it has already put up prices on its products—and further increases could be on the way. The firm cited soaring worldwide prices for cocoa and coffee beans as major reasons for the increase.
The Swiss multinational, also the owner of Nescafe and Nespresso, said it increased prices by 2.1% on its portfolio in the first quarter of 2025. In some markets, the hikes were double-digit, hurting overall sales growth by volume.
Sales Increase Amid Slower Volume Growth
In spite of the difficult environment, Nestlé announced a 2.8% increase in total sales in the first quarter of 2025. But the company admitted that price increases were primarily to blame for this growth since sales volume only increased by 0.7%.
“Even with the high degree of the increases in most markets, the actions were carried out with minimal customer disruption,” Nestlé said.
Nestlé CEO Points to Continued Economic Uncertainty
Group CEO Laurent Freixe spoke about market conditions, citing the uncertain effect of increased global tariffs.
“The effect of increased global tariffs remains uncertain at this point,” said Freixe. He called the current environment “an environment of increased macroeconomic and consumer uncertainty.
Even with these challenges, Freixe assured that Nestlé is sticking to its full-year guidance. “We are holding to our full-year guidance on the basis of our judgment of the direct hit of today’s tariffs and our ability to compensate,” he stated.
Chocflation and Shrinking Products Contribute to Consumer Bite
Nestlé admitted a “marked” effect on customer demand in areas where the price hikes were significant. But the company said that these impacts are now stabilizing. “Consumer behaviour and the competitive environment adjust and stabilise,” the company said.
At the same time, recent statistics have shown that chocolate prices have risen by almost 50% in the last three years. In addition to this, product sizes have decreased—a trend some economists call “Chocflation.”
