July 30, 2010
Dear Valued Customer:
Effective September 1, 2010, there will be a price advance on a selection of Nestlé Professional skus. The decision to advance prices was driven by significant cost increases. These include:
I. Commodities:
Commodity prices increased over the past year as economic growth accelerated. The value of the S&P GSCI, a broad index of commodity prices, rose 10% during this period of time; investors are betting more gains lie ahead.
• Milk prices are 53% above last July and at the highest level since January 2009. Rising dairy costs could add further pressure to margins for dairy processors.
• Cheese prices have risen over 25% y/y since May 2009
• Nonfat Dry milk has increased 50% y/y since May 2009
• Cocoa up 20% has increase y/y since May 2009
• Sugar up 36% has increased y/y since May 2009
• Beef up 20% over 2009 year average
II. Energy
• Oil prices have risen 11% y/y since May 2009
• Natural Gas prices have risen 13% y/y since May 2009.
III. Packaging
• Polypropylene resin prices rose 22% in 2010
• Corrugate linerboard prices rose 16% in 2010
Effective with orders with a requested delivery or pick up date on or after September 7, 2010, the following products’ prices will be:
Hot Pockets 8 oz - All SKUs Increase Amount 5%
Hot Pockets 4 oz - All SKUs Increase Amount 5%
Hot Pockets 3 oz - All SKUs Increase Amount 5%
Should you have any questions, please contact me at 972-236-1298. Thank you for your continued support.
The Very Best,
John Choukalas
Nestlé Professional
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