Oscar Mayer and Velveeta got price hikes. Kraft isn’t done
CNN
By Danielle Wiener-Bronner, CNN Business
Kraft Heinz, the behemoth food company behind Oscar Mayer and Philadelphia cream cheese, may raise its prices. Again.
The company told retailers in January that it would raise prices in March on dozens of products, including Oscar Mayer cold cuts, hot dogs, sausages, bacon, Velveeta cheese, Maxwell House coffee, TGIF frozen chicken wings, Kool-Aid and Capri Sun drinks. That followed a price hike for products like Oscar Mayer cold cuts and hot dogs in the fall.
Now, the company is “taking additional pricing actions as appropriate,” said Paulo Basilio, the company’s CFO, during an analyst call Wednesday discussing the company’s fourth quarter and full year results.
In the last quarter of 2021, Kraft Heinz’s prices were about 3.8% higher compared to the year before, according to the company. The steeper prices helped it offset its own higher costs due to inflation, Kraft said.
Kraft Heinz’s sales dropped 3.3% to $6.7 billion in the final quarter of 2021 compared to same period the year before.
Many consumer products companies are raising prices, including candy-maker Hershey and Procter & Gamble, which makes laundry detergent and other products.
And customers are feeling it. Last week, the Bureau of Labor Statistics reported that the consumer price index rose 7.5% in the 12 months ending January, not adjusted for seasonal swings. It was the steepest annual price increase since February 1982 and came in worse than economists expected.
So far, customers seem to have accepted the higher prices. But that could change soon, warned Coca-Cola CEO James Quincey.
“It’s much harder when there’s a real squeeze on income,” Quincey said during an analyst call last week.
Higher prices or not, Kraft Heinz is hoping that customers will see their products as affordable.
“We continue to make sure we’re offering great quality products at prices that consumers can afford,” Carlos Abrams-Rivera, US zone president at Kraft Heinz, said during Wednesday’s call. “If you think about Heinz Ketchup, it’s about $0.10 an ounce.”
— CNN Business’s Anneken Tappe and Nathaniel Meyersohn contributed to this report.
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.
