Food industry adopts recipe changes to combat rising costs

A phenomenon known as ‘alteraflação’ is emerging in the food industry, where manufacturers modify product recipes to maintain price points while substituting traditional ingredients with cheaper alternatives. This practice involves replacing high-quality components—such as milk in condensed milk or cocoa in chocolate—with vegetable oils, fats, or artificial flavorings. While companies argue these changes are necessary to offset rising global costs for raw materials like sugar and milk, consumers often face both higher prices and reduced nutritional value or flavor.

Nestlé CEO Philipp Navratil confirmed that the company is reformulating products, eliminating certain items, and increasing prices to mitigate rising costs in energy, freight, and raw materials. Navratil attributed some of these inflationary pressures to the ongoing conflict in the Middle East, which affects global supplier costs. Although the Middle East accounts for only 2% to 3% of Nestlé’s total revenue, the broader impact on global supply chains contributes to the trend. This aligns with warnings from the Food and Agriculture Organization (FAO) regarding potential increases in global food price inflation.