SHAH ALAM: With global coffee prices surging to multi-month highs, Nestle Malaysia is seeking to cushion the impact through selective price adjustments and efficiency gains across its operations.
Chief executive officer Juan Aranols said the company has already adjusted prices over the past 18 to 24 months while remaining cautious about how much of the cost burden to pass on to consumers.
“We believe we have taken sufficient pricing measures to manage the situation,”he told media after launching new ready-to-drink Nescafé Espresso Concentrate at Nestle Sri Muda factory here today.
“We remain very mindful that any adjustment affects consumers’ purchasing power and can also influence our competitive position,” he added.
Aranols said Nestle sometimes absorbs part of the rising costs to protect its long-term competitiveness, while relying on automation and streamlined supply chains to ease pressure from volatile commodities.
“Sometimes we prefer to absorb some of the impact, just to make sure that we continue to focus on the long-term competitiveness of our brands,” he said.
“Clearly, there is a lot we can achieve by streamlining our value chain and absorbing, at least partially, the impact of commodities.”
Nestle Malaysia uses a variety of coffees, mainly Arabica and Robusta beans.
Arabica coffee futures on the Intercontinental Exchange in New York have climbed more than 30 per cent this month, driven by a 50 per cent US tariff on Brazilian imports imposed on Aug 6, according to Reuters.
The contract settled up 13.3 cents or 3.6 per cent last Friday at US$3.783 per ounce, a three-month high. Robusta futures also strengthened, gaining US$130 or 2.9 per cent to settle at US$4,650 a tonne.
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