Coffee and cocoa products prices rise, "European stock market giant" Nestlé's Q1 report exceeds expectations | Financial Report Insights

Thanks to price increases in some product categories, Nestlé's Q1 organic sales exceeded expectations with a growth of 2.8%, stating that the indirect impact of tariffs is "still unclear."

On Thursday, the world's largest food company, Nestlé, announced its financial report showing that the company's organic sales in the first quarter achieved a year-on-year growth of 2.8%, slightly above the average analyst expectation of 2.6%. This growth was primarily driven by price increases, as the company had to raise prices for products such as Nescafé and KitKat chocolate bars amid soaring coffee and cocoa costs due to tariff impacts.

In terms of profit guidance, Nestlé maintained its full-year performance guidance, expecting organic sales growth in 2025 to exceed last year's (which fell to the lowest level in decades), with key profit margins reaching or exceeding 16%.

Regarding the potential impact of tariff policies, Nestlé CEO Laurent Freixe stated in a statement:

"This is based on our assessment of the current direct impact of tariffs and our adaptability. Currently, the indirect effects on consumers, customers, and currency and commodity prices are still unclear."

It is noteworthy that the actual internal growth indicator reflecting sales volume is growing relatively slowly, indicating that consumers may be hesitant about price increases. Nestlé stated that the "customer loss" caused by price increases in coffee and candy products is limited at present.

By region, the North American market is growing the slowest, but Nestlé has also seen some positive signals in the region: sales have returned to positive growth, market share has been regained in "multiple categories," and the loss of share in frozen foods and coffee creamer categories has decreased.

The company has committed to lowering the prices of frozen pizzas to win back consumers lost in fierce price competition.

The report indicates that the company may cut costs and focus on major products in the future. According to reports, Freixe plans to increase advertising spending and focus on "fewer but more important product innovations."

Additionally, the company had previously announced a cost-cutting plan of 2.5 billion Swiss francs (approximately 3 billion USD) aimed at freeing up resources to drive growth