These Giant Food Brands Are Still Raising Prices as Profits Skyrocket
Inflation is up by about 6%—and food brands and supermarkets say it's the root cause of grocery price hikes. Food prices are at their highest in a decade, and higher price tags are also boosting sales for manufacturers.
Here is a list of food giants that are still raising prices as profits skyrocket, according to data. And for more grocery news, here are 6 Things You'll See at Costco This Year.
The first few months of the pandemic hit Tyson manufacturing plants hard, with 10,000 employees contracting COVID-19 by the end of July 2020. There was a chicken shortage in 2021, then inflation hit another 40-year high in 2022.
"Tyson said it raised meat prices to offset higher costs for labor, transportation, and grains used for animal feed. Its cost of goods rose by 18% in the quarter, and [Chief Executive Donnie] King told reporters he expects grain prices will continue to rise," Tom Polansek and Ananya Mariam Rajesh recently wrote for Reuters. "To respond, Tyson restructured its chicken pricing strategy to make it more flexible and has asked customers to pay for freight rates that jumped 32%, King said."
Tyson's profits nearly doubled in the first quarter as prices increased, according to Reuters. Beef prices went up almost 32%, bringing in $5 billion, while the average price of the company's products went up almost 20%.
Another company seeing higher margins as it raises prices is PepsiCo, whose net revenue went up by 12.4% in the fourth quarter. In a recent interview with Reuters, the company's finance chief didn't rule out the possibly of additional price increases if production costs go up.
"We control our supply chain basically all the way to the shelf," Hugh Johnston told the outlet. "That puts us in a relatively better position, but I wouldn't say we're not going to have challenges. We're not immune to that."
Don't be surprised if Gatorade, Mountain Dew, Tropicana, or any of the other brands under the company's umbrella go up in price.
Coca-Cola's adjusted revenue climbed more than 10% in the fourth quarter, according to Reuters. CEO James Quincey said on a recent call with analysts that the company was "doing the maximum we can to optimize our full availability."
More price hikes may lie ahead, but experts think prices will ease at some point.
"The current impact on margins doesn't change our long-term outlook for Coke and Pepsi simply because eventually inflation should subside and the changes that both these companies have made internally should begin to shine through," an analyst from Edward Jones told Reuters.
But soda and meat aren't the only two grocery items that are about to become more expensive . . .
Another company is raising prices.
Kraft Heinz—the maker of Capri Sun, Lunchables, and other beloved drink and snack brands—recently announced that prices are going up by as much as 30% in some cases. According to CNN, the company said the increases were the result of "constrained supply, logistic bottlenecks and weather-driven crop losses."
Expect to see these price hikes in March. It's never been a better time to read up on the best money-saving tips for grocery shopping. Read this article to learn about how to save big.