VEVEY, SWITZERLAND — Having successfully weathered supply chain disruptions during the COVID-19 pandemic and with production facilities around the globe, Nestle SA is well positioned to handle an environment of rising tariffs, the company’s top executives said.

In an April 24 conference call with investment analysts in connection with releasing its quarterly sales update, the executives acknowledged that tariffs already imposed in the United States as well as others that are pending are likely to have an effect on the company’s coffee business.

“With respect to tariffs, you’re right that the impact of importing Nespresso into the US and some soluble coffee will be impacted by tariffs,” Anna Manz, chief financial officer, said in response to a question about the impact of tariffs. “In the overall scheme of our business, this is manageable where we sit today. We are looking at a number of different mitigating actions, and those include a number of things around load balancing, how we source some things. Of course, pricing is also another lever.

“What I would say is we’ve seen supply chain disruption and changes like this a number of times over the last five years, and we’re quite good at putting the action plans together to manage the different scenarios as they evolve, and we've been very focused on that.”

While the Switzerland-based company operates in 185 countries around the world, Laurent Freixe, chief executive officer, said the company relies less on trade than may be generally understood, particularly for finished products. Nestle currently operates 337 production facilities spread across 75 different countries.

“In the tariff environment, we have that unique position that we make where we sell,” he said. “We produce essentially local for local. And you look at our three big geographies, US, Europe, China, more than 90% of what we sell is produced locally. So that is a kind of natural protection for the most part.”

Expanding on the discussion around the effects of tariffs on coffee, Nestle’s largest business, as well as other major categories, Freixe said the company is well positioned in those sectors as well.  

“Back to what Anna was saying on the category is the most exposed, which would be coffee for us in the US, especially in Nespresso, or Premium Water brands or Nestle Health Science for ingredients, those are categories where we have pricing power, the highest pricing power,” he said. “Hence, our confidence going forward, recognizing that this is a fast-moving reality, and we stay tuned and ready to adjust to a fast-moving environment.”