“We have inflation, we are seeing inflation, we are concerned about inflation. We have to mitigate that inflation, or at least part of it, with hedges and with efficiencies in the factories,” Kraft Heinz Chief Executive Miguel Patricio told Reuters.
Other major food companies, including Unilever, have also signaled higher prices due to global commodity inflation.
“We’ve got some inflationary pressures coming forward. And we do expect mid-to-high single-digit commodity inflation in the first half. So we have to be at the top of our game in pricing going forward,” Unilever Chief Financial Officer Graeme Pitkethly said on a recent earnings call.
Prices this year on some products that use wheat, sugar and other commodities that are becoming increasingly expensive due to high demand. Prices for commodities like sugar, wheat and soy are surging.
U.S. consumers on average paid 3.7% more for food consumed at home in January than they did a year earlier, according to the Bureau of Labor Statistics Consumer Price Index. Year-over-year increases in food prices have topped 3.5% each month since last April, the longest such stretch in nearly a decade.
The food producers are not the only U.S. manufacturers beginning to respond to sharply higher input costs - the highest in a decade in some national surveys - with price increases of their own. The Philadelphia Federal Reserve’s monthly factory survey for January showed prices received by manufacturers for their goods rising by the most since 1989.