Nestle, the world's biggest food group, is set to lift the price of its products again this year, after more costly ingredients helped to push its 2022 profit below market forecasts.

Rivals of the Swiss food conglomerate have said they anticipate a more positive pricing outlook for shoppers in 2023.

But Nestle CEO Mark Schneider said further rises were necessary to offset the impact of increased commodity prices.

That is bad news for consumers, whose spending power has already been hit by inflation at multi-decade highs.

The maker of Nescafe instant coffee and KitKat chocolate bars raised prices by 8.2 per cent last year, but that did not fully offset the impact of increased costs for ingredients.

"That is after all the pricing we have done in 2022."

Unilever and PepsiCo expect prices to settle late 2023

Consumer goods producers increased prices to cope with surging costs for almost all raw materials after Russia's invasion of Ukraine compounded pandemic-related supply chain logjams.

But they face a challenge in how much they can increase prices before even affluent shoppers decide enough is enough.

Unilever said last week it would continue to raise prices for its detergents, soaps and packaged food to offset rising input costs, but would ease those hikes in the second half of 2023.

Snack and soft drink maker PepsiCo said last week it would stop raising prices after multiple hikes last year helped it beat analyst estimates for profit and sales.

Barclays analyst Warren Ackerman expected "almost all" of the lower-than-estimated volumes would be the result of Nestle rethinking supply-chain constraints and the variety of products it made.

He said the question would be how much of the volume weakness from these factors persisted into the first half of the year.

Mr Schneider said that, in most cases, the impact to volumes did not signal consumers trading down to cheaper, private-label products.

Nestle's net profit fell to 9.3 billion Swiss francs ($14.6 billion), missing expectations for 11.6 billion francs, although the consensus forecast did not account for the impairment at the company's Aimmune subsidiary last year, analysts said.

"Nestle rarely misses and that was a miss," Bernstein analyst Bruno Monteyne said.

Shares in Nestle were down 2.8 per cent in mid-afternoon trading.

Nestle said it targeted organic sales growth — which cuts out the impact of currency moves and acquisitions — in a range of 6-8 per cent in 2023.

During 2022, the company's reported sales increased 8.4 per cent to 94.4 billion Swiss francs.

Reuters