Nestlé has sought to play down reports that it will speed up any streamlining of the business in the face of a rise in commodity costs.
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The world’s largest food company told just-food that it “constantly” looks at how it can drive productivity and efficiency and would not enact large-scale changes at the company amid changing economic conditions.
“We are constantly looking to modify our structures and adapt our company and this is not dictated by a particular set of circumstances,” a Nestlé spokesman in Switzerland said last night (12 July).
Nestlé was reacting to an interview given to Reuters by Jose Lopez, a management board member at the Swiss food giant. According to Reuters, Nestlé is looking to axe unprofitable products and speed up the rationalisation of its production base in the face of rising input costs.
Lopez told Reuters that Nestlé would cut some product lines that become less profitable as commodity prices rise.
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By GlobalDataThe company spokesman declined to comment on Nestlé’s specific strategy but said the group would always act with changing economic conditions in mind.
“Any company that has survived for over 100 years has not done so with its eyes and ears closed to the environment it works in,” he said. “But to say we have massive plans is to give the wrong impression.”
Last week, Nestlé chief Peter Brabeck-Letmathe warned of a “significant and long-lasting” rise in food prices due to demand from India and China and the use of crops in biofuels.
In an interview with the Financial Times, the chairman and CEO of the world’s largest food company said there would be structural changes in supply and demand. Price pressure, Brabeck-Letmathe, said has become more apparent in recent months.
He told the FT that population growth, rising demand from “the phenomena of India and China” and the use of crops for biofuel would put pressure on food prices.
