Global food leaders warn of even more price hikes ahead

According to Reuters, Kraft Heinz Co announced on February 16, 2022, it would raise the prices of its snacks and condiments further to counter soaring costs of raw materials and transportation, after posting quarterly earnings above market expectations.
Packaged food makers were among the biggest pandemic winners last year as stuck-at-home consumers stockpiled on frozen meals, sauces and soups.

A strained supply chain, however, has driven up freight and labor expenses and aggravated problems for companies like Kraft, Conagra, Kellogg and other global leaders of the food industry, that are grappling with surging costs of numerous raw materials such as grains, meat or edible oils. "Kraft Heinz is doing a better job of navigating rising costs and driving demand than we thought," analyst John Boylan said, adding that the company has laid a good foundation by lowering costs and divesting sluggish businesses.

Kraft, whose brands include Philadelphia Cream Cheese and Heinz ketchup, said it raised prices by 3.8 percentage points in the fourth quarter when demand for its products was also robust. Margins in 2021, as a result, were higher than in pre-pandemic 2019. The company expects inflation to be in the low-teens percentage range for 2022, with higher levels in the first half than in the second, said Chief Financial Officer Paulo Basilio.

Some complementary data
 
The spectacular rise in costs does not only affect raw materials, agricultural and industrial inputs, nor transportation, energy or the cost of labor, etc.: everywhere in the world, inflation also affects finished product prices, and in particular those processed food products. Beyond the findings, beyond the measures taken and the announcements of the world leaders in the food industry, it is possible to follow the evolution of the prices of products sold to end consumers, thanks to the monthly indexes published by the FAO. 
And the February 2022 indicators show that the year 2022 is starting at a level practically never reached before, which raises fears of a negative effect on consumption

The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.