Nestle CFO Sees Tough Start to 2023 Before Inflation Eases

Inflation will start to ease in the second half of 2023, according to Francois-Xavier Roger.

The executive at the maker of Nescafé and KitKat said in a broad-ranging interview this month that they are likely to go into a recession. He said that will cause a decline in consumption.

Higher input costs have been a problem for consumer goods groups. Demand for their products has been damaged by price hikes. Households are affected by rate hikes in major economies such as the US.

Coffee, wheat, and palm oil have all seen their costs decrease recently. Electricity prices in Europe will add to the pressure.

If there is a recession, restoring the company's gross margin to previous levels will be more difficult, according to Mark Schneider.

Taking Time

Roger said there would be a lot of inflation for the next six months. In the second half of the 20th century, I think we'll see some moderation.

The company's shares were higher in the Swiss city.

Roger believes that freight rates are an indicator of a recession. According to Drewry Shipping Consultants, the price to ship a maritime container on the benchmark Shanghai-to-Los Angeles route has plummeted to below $2,000.

More sustainable packaging and carbon reduction are some of the investments that will be made by the world's biggest food company. Roger said that environmental, social, and governance reporting should be compulsory.

The company is trying to reduce its carbon footprint by 50% by the year 2050 and 20% by the year 2025. It is changing manufacturing and packaging practices in order to reduce its emissions. More of its plastic packaging is going to be recycled.

The CFO said that he is looking for a return on those investments because they have an impact on carbon reduction, plastic reduction, and water reduction.