The makers of some of the world’s bestselling food and drink brands warned they would need to keep raising prices as they grapple with the strongest inflation in years.
Nestlé SA, Diageo PLC and Danone SA all said Thursday that sales were rising as key markets rebound from the pandemic, but that the recovery was also leading to rapidly increasing costs for ingredients, packaging and transport.
Nestlé said its ice creams had gotten more expensive, spirits giant Diageo has raised prices on brands like Baileys and Casamigos tequila, and Danone, which owns the Alpro and Silk dairy-substitute brands, said it was increasing prices across all of its categories to try preserve its profitability.
“We do expect price increases to accelerate from what you saw in the first half,” said Nestlé Chief Executive Mark Schneider. “After several years of low inflation, all of a sudden it accelerated very strongly starting in March and is continuing to accelerate.”
Companies across many sectors are contending with rising costs from coffee to aluminum and shipping as the recovery from Covid-19 gains steam. That is leading to higher prices for many goods, pushing U.S. inflation to rise at the fastest pace for more than a decade.