NESTLÉ Philippines, Inc. is ramping up production as it faces thinning supplies because of a surge in demand for food products and supply chain challenges during the enhanced community quarantine (ECQ).
Despite this, the company foresees slower demand after consumers that have lost income during the ECQ lose purchasing power.
“Right now we are operating at around 80% of our normal output,” Nestlé Philippines Chairman and Chief Executive Officer Kais Marzouki said in a television interview on Monday.
He said the company had increased production from 60% in recent weeks after it was impacted by a surge in demand in March and April when consumers stocked up on food products. Mr. Marzouki said shipping delays had also caused a decrease in output.
“We are really running thin on some of the products,” he said, explaining that the company has one to two weeks worth of finished product supplies and 10 days worth of raw materials like sugar.
To address supply challenges, he said that the company has safety measures in place so that employees can report for work, and that it plans ahead in ordering raw materials.
He said demand had been strong in recent weeks because of panic-buying and increased home cooking.
“Going forward, this will change a lot because we think that a lot of people right now are not getting any income. So there will be a lot of pressure on purchasing power on our consumers in the months to come,” he said.
To retain demand, he said the company is considering adding free packs in products and increasing promotional strategies.
Nestlé Philippines recently launched a P500 million program to distribute food packages to one million families. — Jenina P. Ibañez