Food And Beverage Inflation, Antici-Flation, Shrink-Flation: Who’s Winning And Losing?

June 21, 2022

Inflation has returned, and not just at the gas pump. While raising consumer prices is always risky, many F&B companies have had to take that chance as freight and material costs have skyrocketed. Some are finding that hiking prices hasn’t hampered demand much, at least for now. Campbell Soup Co., Kellogg’s, and Kraft Heinz all raised their annual sales forecasts in June, after raising prices.

A closer look at the F&B industry amid inflation shows changing company and consumer behaviors, new ingredients that stretch products further, supply chain shifts, different strategies, and new ways to handle higher costs and prices. Who are the winners now and who are they likely to be in the future?

The Inflation Equation

When it comes to inflation, unfortunately, you can believe what you hear. Supply chain struggles, labor shortages, and a consumer cash influx from Covid relief are fueling price hikes. According to the U.S. Bureau of Labor Statistics, food prices shot up 10.1% year over year as of May. And prices for groceries rose 11.9%, far outpacing the 7.4% at restaurants and take out. The cost to make a toast these days could drive you to drink.

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