Nestlé’s decentralized manufacturing shields it from tariff impact, CEO declares

SWITZERLAND – Nestlé is largely “immune” from the impact of tariffs, as the company benefits from its more localized manufacturing footprint, according to Laurent Freixe the company’s CEO.

Freixe explained that while the firm is closely monitoring global trade and tariffs, it benefits from the fact that most of the products sold are manufactured in their respective markets. In the U.S., for example, Nestlé produces about 90% of what it sells domestically.

“We are in a unique, privileged position, which is giving us resilience to significant movements,” Freixe, who took over as CEO last September, said following the release of Nestlé’s fourth-quarter earnings.

The company reported organic sales for 2024 rose 2.2%, a sharp drop from 7.2% in the prior year. Sales fell to US$101 billion (91,354 billion Swiss francs) from US$103 billion in 2023.

According to Nestlé CFO Anna Manz, the Switzerland-based company has lots of mechanics to mitigate any tariff that it sees come through, be it pricing or changing sourcing.

She noted Nestlé’s guidance for 2025 does not factor in any impact from tariffs. While it’s hard to predict what is going to happen with trade policy, Manz warned that any new duties could cause inflation to rise relatively quickly.

Tariffs would raise costs at a time when CPG companies already feel pressure from a prolonged period of inflation. Businesses have raised prices to boost sales and offset higher expenses, but this has forced consumers to cut back on how much they buy or switch to other brands.

Nestlé has had trouble getting consumers to come back, particularly in frozen items such as pizza. The company recently lowered pricing and took steps to improve quality in the U.S. in an attempt to win back customers.

Nestlé said it is planning further price increases for cocoa and coffee, two commodities grappling with record-high prices. Manz said that how much Nestlé increases prices for products with coffee or cocoa will depend on how consumers respond, though she said they are both very resilient categories.

Food and beverage makers are closely following the impact that tariffs from the Trump administration could have on their businesses. Coca-Cola CEO James Quincey earlier mentioned that the beverage maker could switch to more plastic bottles from aluminum cans if input costs for the commodity become too expensive.

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