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Kraft Heinz Warns Shoppers 'Get Used To Paying More For Food'

Tyler Durden's Photo
by Tyler Durden
Monday, Oct 11, 2021 - 01:45 PM

Global food prices are at fresh decade highs leading to even higher grocery bills for the working poor, and the supply chain chaos plus the emerging energy crisis are making things worse. 

Food producers, such as Kraft Heinz Company, have struggled with shortages, supply chain woes, labor issues, higher energy costs, and rising ag commodity prices, all of which support higher food inflation. 

BBC News spoke with the European boss of Kraft Heinz, Miguel Patricio, who warned that consumers must get used to higher food prices. He said, "we're raising prices, where necessary, around the world." 

The company, famous for tomato ketchup and baked beans, is dealing with a rapid surge in ag costs, such as cereals and oils, which has also pushed the global food price index to a decade high, according to UN data. 

Patricio outlined a broad range of factors contributing to rising food costs: 

"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."

He said inflation is up "across the board," and consumers will need to get used to paying higher prices.

Patricio did say that not all costs should be passed along to consumers:

"I think it's up to us, and to the industry, and to the other companies to try to minimize these price increases." 

But according to Kona Haque, head of research at the agricultural commodities firm ED&F Man, food producers like Kraft Heinz, Nestle, and PepsiCo "will most likely have to pass that cost on to consumers."  

"Whether it's corn, sugar, coffee, soybeans, palm oil, you name it, all of these basic food commodities have been rising.

"Poor harvests in Brazil, which is one of the world's biggest agricultural exporters, drought in Russia, reduced planting in the US and stockpiling in China have combined with more expensive fertiliser, energy and shipping costs to push prices up," Haque said.

The warning comes as an increasing amount of Brits are unable to find essential items as an energy crisis in the country has disrupted food supply chain networks. 

The Office for National Statistics said about 17% of people couldn't find certain supermarket items, and as many as a quarter are having issues finding essential food items. 

A survey commissioned by The Grocer, a British magazine devoted to grocery sales, found 66% of people are concerned about shortages over the upcoming holidays.

The confluence of rising food prices and skyrocketing energy bills in the country comes as some fear the "winter of discontent" nears. 

Major corporations, such as Kraft Heinz, have no qualms about raising prices on the working poor. They just want their damn money, just like the mobsters in the classic movie "Goodfellas:" 

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