“We’ve already increased the prices that we were expecting this year, but I’m predicting that next year inflation will continue, and as a consequence [we] will have other rounds of price increases,” Patricio said in an interview with CNN Business on Monday.
Patricio’s warning comes as inflation is still hovering at 40-year highs, drastically reducing the purchasing power of American households as many companies have passed on higher costs to consumers.
According to an estimate from Moody’s Analytics cited by CNBC, soaring inflation is forcing American households to spend an extra $445 more per month buying the same items they did this time last year.
Kraft Heinz reported in its second-quarter 2022 results that it had raised its prices by 12.4 percentage points compared to the year-ago period. The company has also offered different packaging and pricing options for consumers looking for lower-priced items.
CEO Patricio told CNN that the company has tried “to minimize inflation on everything we do” because “it would be very easy just to pass the price to consumers, but that has consequences.”
He cited that because of ongoing challenges, such as raw material shortages, supply difficulties, the emergence of new strains of the COVID-19 virus, and Russia’s war in Ukraine, there will be continued uncertainty among the food industry.
“Every day we have a new problem. It’s the new normal,” he said. “At the beginning, we thought it was a crisis. Now we know it’s a new normal and we have to adapt to that.”
“It has been very hard,” Patricio added. “This has been hard for the entire industry.”
Despite the ongoing issues, including a tomato shortage, Patricio vowed that Heinz ketchup will continue to be stocked in supermarkets as the company predicted there would be a problem with crops of the fruit and so purchased them in advance.
Kraft Heinz is scheduled to report its third-quarter earnings on Oct. 26.
The Chicago, Illinois-headquartered food company in September raised its inflation forecast, projecting full-year inflation of roughly 20 percent, compared with an earlier estimate for inflation in the “high teens.” Meanwhile, Patrick Harker, president of the Federal Reserve Bank of Philadelphia, has warned that the central bank will likely need to keep raising interest rates to well above 4 percent this year in an attempt to bring down the cost of living.
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