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High food prices are here to stay – Kraft Heinz

High food prices are here to stay – Kraft Heinz
Consumers will have to get used to increasing food prices, as pandemic-shaken economies and the global energy crunch have placed an enormous burden on the world’s food producers, Kraft Heinz CEO Miguel Patricio has warned.

Patricio admitted that the world’s fifth-largest food and beverage company has been raising prices of such products as ketchup and baked beans “where necessary around the world.” Kraft Heinz has reportedly increased prices for more than half of its products in the US, the company’s home market, and expects to do the same elsewhere.

The warning comes shortly after the UN Food and Agriculture Organization reported that the cost of ingredients, including cereals and oils, has pushed global food prices to a 10-year high.

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Patricio highlighted that inflation was “across the board,” unlike in previous years. Production of raw materials across the world, ranging from crops to vegetable oils, saw a dramatic decline as the Covid-19 pandemic limited both output and delivery due to the rise of infections and measures to control the virus’ spread.

When the vaccine rollout allowed economies to reopen, the restarted supply failed to keep up with the sharply increasing demand, inevitably leading to price spikes. Moreover, soaring energy prices have made the situation even more complicated.

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“Specifically in the UK, with the lack of truck drivers. In the US logistic costs also increased substantially, and there’s a shortage of labor in certain areas of the economy,” Patricio said, as quoted by the BBC.

He stressed that not all cost increases should be passed on to consumers, with manufacturers expected to absorb some of the costs.

“I think it’s up to us, and to the industry, and to the other companies to try to minimize these price increases,” he said, adding that “there’s a lot to come in technology to improve the effectiveness of farmers” that would help in the longer term.

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