KitKat maker Nestle reveals steep price increases for coffee and chocolate
KitKat and Nespresso firm Nestle has pushed through double-digit price increases for coffee and chocolate across some markets as it faces soaring commodity costs.
The Swiss firm revealed it raised prices by 2.1 per cent overall in the first quarter to counter surging coffee bean and cocoa costs.
In some markets, price increases were in the double-digits, which impacted its underlying sales growth by volume, according to the firm.
The group reported better-than-expected sales growth of 2.8 per cent for the first three months of 2025, although the higher prices accounted for much of the rise, with sales by volume edging 0.7 per cent higher.
“Despite the significant level of the increases in many markets, the actions were implemented with limited customer disruption,” Nestle insisted.
Group chief executive Laurent Freixe said the impact of higher global tariffs “remain unclear at this stage”.
He added: “Overall, the situation continues to be dynamic, with heightened risks and uncertainty.”
Mr Freixe cautioned the firm is facing an “environment of heightened macroeconomic and consumer uncertainty”.
But he said Nestle is sticking to its full-year guidance, “based on our assessment of the direct impact of current tariffs and our ability to adapt”.
The group revealed it had seen a “pronounced” initial impact to consumer demand where large price hikes were passed on, but added this is easing as “consumer behaviour and the competitive environment adjust and stabilise”.
Commenting on Nestle’s performance, and broader market sentiment on Thursday, Russ Mould, investment director at AJ Bell, said: “Markets paused for breath after the recent rally as investors were treated to a barrage of corporate news to get their heads around.
“As always, the outlook statement was more important to investors than the backward-looking numbers. Comments about tariffs from business leaders are omnipresent and investors want to know how companies plan to deal with potential cost pressures.
“Nestlé has faced considerable headwinds over the past year as the price of two of its key ingredients went through the roof. Soaring costs for cocoa to make KitKats and coffee beans to make Nescafé left Nestlé with no choice but to jack up prices. Customers have stomached the extra costs but Nestlé’s sales volumes have noticeably lagged price hikes.”