Kraft Heinz says food price rise is here to stay, people must be prepared for it



 

Miguel Patricio, the boss of Kraft Heinz, a company known for its baked beans and tomato sauce, told BBC that it was raising its prices of food items in many countries across the world. He also mentioned that inflation was “across the board” and that consumers have to be prepared for food price rise to remain. Prices have increased not only in the U.S. but in several countries due to a combination of factors.

As a result of the pandemic, production of raw materials in several countries had fallen. Some of these materials included crops and vegetable oils. There were also other reasons such as illnesses due to COVID-19, a limited output as well as limited delivery.

Although economies worldwide are restarting, there is limited supply despite growing demand. So, there is a rise in price. Some of the factors that have lead to an increase in price include wage rise as workers are expecting higher wages. There is also a shortfall of energy around the world, which is also contributing to a hike in prices. Logistics cost, shortage in truck drivers and supply chain woes are also adding to production costs.

Mr. Patricio also told the BBC that consumers would have to get used to higher food prices. He said that while the human population was increasing, the amount of land to grow food on was not increasing. He added that advancements in technology would help to farmers improve their efficacy. He also said that companies should absorb some of these costs and not pass all of them to customers.

Costs of basic commodities such as corn, sugar, vegetable oils and more have been increasing. Climate change, reduced acreage, increase in fertilizer, labor, energy costs, increase in shipping costs and other factors have lead to a price rise, according to Kona Haque, head of agricultural research at ED&F Man, an agricultural commodities firm.

Haque said that the increase in costs is going to be widespread and all companies are going to raise prices, so they will not lose customers, despite a hike. Price rise in food items are here to stay and consumers will have to accept it.




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