Food giants aim to recover from customer shift to cheaper alternatives

  • Nestle and Danone focus on growing volumes after price hikes
  • Higher costs led to customers seeking cheaper alternatives
  • Price increases to be smaller and focused on specific areas
  • Nestle and Danone have guided for similar sales and margin growth
  • Nestle shares traded lower, while Danone shares were down

European food giants Nestle and Danone are shifting their focus to growing volumes after facing backlash from hefty price hikes. The companies experienced increased costs, leading customers to seek cheaper alternatives. Nestle and Danone plan to moderate price increases this year and concentrate on specific areas of their businesses. Both companies have guided for similar rates of sales and margin growth, with Nestle forecasting organic sales growth of around 4% and Danone expecting 3% to 5% like-for-like sales growth. Nestle shares traded lower, while Danone shares were down.

Factuality Level: 8
Factuality Justification: The article provides a detailed overview of the strategies and financial performance of Nestle and Danone, based on statements from company executives and analysts. The information presented is factual and focuses on the companies’ plans for growth and pricing strategies, without including irrelevant details or biased opinions.
Noise Level: 3
Noise Justification: The article provides relevant information about the strategies of Nestle and Danone in response to consumer behavior and market conditions. It includes details about their focus on growing volumes, moderating price increases, and their sales and margin growth forecasts. The article stays on topic and supports its claims with examples and quotes from company executives and analysts. However, it lacks in-depth analysis of long-term trends or antifragility concepts, and does not explore the consequences of these companies’ decisions on broader societal impacts.
Financial Relevance: Yes
Financial Markets Impacted: Nestle and Danone
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the focus of Nestle and Danone on growing volumes this year after price hikes in the past led to customers seeking cheaper alternatives. The article mentions the impact of inflation on consumers and the expectation of smaller price increases in specific areas of the businesses. There is no mention of an extreme event or its impact.
Public Companies: Nestle (N/A), Danone (N/A)
Key People: Mark Schneider (Chief Executive of Nestle)

Reported publicly: www.marketwatch.com