World's Largest Food Company Warns Prices Will Increase This Year

What happened

The price of some of Nestlé's products will increase further this year. Nestlé is the world's largest food company and increased its prices by 8.2% in 2022. That wasn't enough to offset the higher costs the company incurred in the course of producing its line of consumer goods.

So what

Nestlé owns about 2,000 brands, so its price hikes have the potential to impact a wide range of consumers. Some of the company's more well-known brands include Cheerios, Gerber, Stouffer's, and Lean Cuisine. Nestlé also owns a number of pet food brands, including Alpo and Purina, so price increases have the potential to impact those with pets at home.

Nestlé has not announced which brands will specifically be looking at price hikes. But given the company's reach, consumers should brace for a broad impact.

That said, Nestlé isn't necessarily raising prices across the board. Rather, Nestlé CEO Mark Schneider explained that its price increases will be "very targeted" and only come into play when the cost of producing specific goods rises enough to require those hikes. 

"We are still in a situation where we're repairing our gross margin and, like all the consumers around the world, we've been hit by inflation and now we're trying to repair the damage that has been done," Schneider said. 

Now what

At a time when so many consumers are raiding their savings and racking up credit card debt to cope with higher grocery costs, Nestlé's plan to raise prices isn't welcome news. As of January, grocery prices were up 11.3% on an annual basis, as per the Consumer Price Index. And the cost of food at home rose at a faster pace than the cost of food outside the home.

But that doesn't mean dining out more frequently is the solution to higher grocery prices. Those eager to save money on groceries should look to buy in bulk for items that have a longer shelf life and are used often in their households. Most of the time, buying in bulk means snagging a lower price per ounce or unit than buying food in smaller quantities. 

Consumers who are struggling with higher grocery bills can also turn to discount grocers and dollar stores to fill their pantries. Often, shopping at these establishments will result in some savings.

Finally, being mindful of supermarket sales could go a long way toward keeping grocery spending down. The same goes for meal-planning. Supermarkets commonly lure consumers into impulse purchases, but figuring out meals in advance and writing out lists could make it less likely for shoppers to end up with extra purchases they don't really need. And at a time when food prices are so high, that's important.