Nestle - using branding & productivity to overcome commodity price increases

A huge amount of lesson material for both business & economics lessons here.  The background to the video clip is the rapid increase in the global price of commodities such as cocoa & sugar together with energy costs. However, despite the soaring costs of raw materials, Nestle has so far been able to avoid passing on the cost to its customers. Why is this?  Could it be the economies of scale that Nestle enjoys from being one of the world’s biggest food producers?  Might the popularity of its brands mean that customers are less likely to switch to alternatives if Nestle attempts to increase its selling prices?

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