Nestlé in Ukraine increased its production by 10% in 2024 and intends to repeat this growth next year, said Alessandro Zanelli, CEO of the company in Ukraine and Southeast Europe.
“Ukraine’s FMCG grew by just under 10% this year and demonstrated a strong focus on volume growth. This is a very clear sign of the resilience of the Ukrainian macroeconomy, which is hardly at war. Overall, the country’s GDP is quite resilient. We do not see the local currency, the hryvnia, collapsing. It is a steady controlled devaluation. At the same time, inflation is also relatively stable and under control,” he said at the NV conference ‘Ukraine and the World Ahead 2025’.
Zanelli noted that Nestle’s growth in Ukraine was at a similar level – just under 10% with an emphasis on volume growth, which can be estimated at 7-8%. The company’s CEO explained such indicators during the war as the result of the implemented strategy aimed at maintaining sustainability. The company’s team joined forces to protect its people, which allowed Nestle’s factories in Ukraine to continue operating even in Kharkiv. Being under constant shelling, this company also found an opportunity to increase productivity, the CEO explained. He noted that Nestle’s strategy in Ukraine also focuses on adaptability at all levels: from responding to changing consumer trends and adjusting the product portfolio and their locations to changing the timing of promotional activities and transforming communications to bring more hope and make products relevant to consumers.
Zanelli assessed the results of Nestle’s work in Ukraine as satisfactory and expressed confidence that in 2025, even taking into account possible difficulties, production growth will be similar – at least 10% per year.
The company’s CEO predicts that in the second quarter of 2025, Ukrainians and the FMGG segment will face rising inflation, which will lead to a significant rise in food prices. In addition, the shortage of skilled labor will increase. He also sees the cost of electricity as a challenge for the coming year. Zanelli said that the probability of the war ending, which the whole society is waiting for, is a possible “white swan”.
“In general, we remain optimistic, as I said, and expect about 10% growth,” Zanelli stated.
He also explained the postponement of the launch of the new plant in Volyn region from December 2024 to January 2025 by various elements of disruption, including the increase in air raids and the availability of people. At the same time, the top manager assured that the launch will take place, for which the company, along with recruiting specialists living in the region of the plant’s construction, is relocating staff from Kharkiv.
Zanelli emphasized that the location of the new plant next to another plant (Torchyn, Volyn region – IF-U) is the intention to create a food production center near the border with the European Union. The products produced by the new plant will be exported by 80%. In the domestic market, the company will increase its presence and market share through supplies from other companies.
“Usually, to make a business attractive, we first improve its efficiency and then immediately reinvest back into efficiency to grow and increase market share. It is extremely important for us to have an additional plant in Ukraine (…) We as Nestle understand that the war will end. It is too easy to come and invest on the first day after the war ends. For us, the moment of investment has come now, so we are planning for the future,” summarized the CEO of Nestlé in Ukraine.
Nestlé started its operations in Ukraine in 1994 with the opening of a representative office, acquired a controlling stake in Lviv Confectionery Factory Svitoch in 1998, and has owned 100% of the company’s shares since 2018. Nestlé’s business in Ukraine is represented by the following areas: coffee and beverages, confectionery, cooking (cold sauces, condiments, soups, fast food), baby and specialty food, breakfast cereals, and pet food.
