Food giant Kraft Heinz is set to raise the prices of its snacks and condiments further to counter the soaring costs of raw materials and transportation costs, stated a report on Thursday (17).
In its final quarter of 2021, ended 26 December 2021, the FMCG giant reported a 3.9 percent decrease in net sales to £4.9 billion and by 1.8 percent for the year as a whole.
Despite increases in international markets and Canada, the firm also reported a 3.3 percent drop in overall revenues in the quarter as a result of the disposal of its natural cheese business to Lactalis in November, with reduced numbers for the US market.
A strained supply chain has driven up freight and labour expenses and has aggravated problems for companies such as Kraft that are grappling with surging costs of grains, meat and edible oils.
Kraft, whose brands include Philadelphia Cream Cheese and Heinz ketchup, said yesterday (17) that it raised prices by 3.8 percentage points in the fourth quarter when demand for its products was also robust.
Packaged food-makers were among the biggest pandemic winners last year as stuck-at-home consumers stockpiled on frozen meals, sauces and soups.
“Our strategic transformation has powered another year of outstanding performance,” Kraft Heinz CEO Miguel Patricio said.
“Our achievements are proof that our scale and agility have led to better results and greater relevance with customers and consumers. We are generating efficiencies to fuel incremental investments in our business, which, along with successful pricing, are mitigating inflationary pressures.
“I’m proud of our incredible team and have great confidence that we will build on our momentum in 2022.”
The report comes amid similar claims made by Nestle and Dettol-maker Reckitt. Nestle – which owns brands including KitKat, Quality Street and Shreddies – has warned of increases in addition to the 3.1 percent rise it made late last year.
The consumer goods company Reckitt, the maker of brands such as Harpic, Nurofen and Strepsils, revealed on Thursday (17) that its costs increased on average by 11 percent during 2021, adding that these would climb even higher this year.
“We are passing some pricing on to consumers, but we minimise that through programmes that we have internally, such as productivity programmes,” said Jeff Carr, its chief financial officer. “Prices have gone up but we’re absorbing a significant part of that inflation, and we’re not passing it on to consumers. We want to get good offers to our consumers, we want to be competitive.”
