Kraft Heinz is planning more price increases

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The American food group Kraft Heinz had more than expected results in the last quarter of 2021. However, the multinational says it will have to increase its snack and spice prices even further to offset the rising cost of raw materials and transportation. .

Packaged food producers were among the biggest winners of last year’s pandemic, as consumers stayed home stocked with frozen food, sauces and soups. However, a fragile supply chain has led to a sharp rise in transport and labor costs. Moreover, prices for staple foods such as wheat and oil reached the highest levels in ten years last year. This puts companies like Kraft Heinz under considerable pressure.

CEO Miguel Patricio has already announced price increases in October, and these are now reflected in the quarterly figures. Kraft Heinz increased its prices by 3.8 percentage points in the last quarter. As a result, margins were higher than in the same period before the coronavirus crisis.

However, sales of the food giant fell 3.3% to $ 6.71 billion (5.9 billion euros) in the three months leading up to December 25, but that was due to more acquisitions and divestments. . They also performed better than the $ 6.61 billion (5.8 billion euros) analysts expected, Reuters reports. On an organic basis, revenues rose 3.9 percent.

“Our achievements are proof that our scale and agility have led to better results and greater relevance for customers and consumers. We are generating efficiencies to fuel the growth of investment in our business, which, together with successful pricing, alleviates inflationary pressures, ”said Patricio. .

Despite high inflation, Kraft Heinz expects to achieve “strong financial performance” in 2022. The company expects an organic increase in sales of 1 to 3% for the full year, driven by continued higher consumption than before the pandemic. . Adjusted gross operating profit (adjusted EBITDA) is expected to be between $ 5.8 billion and $ 6 billion (5.1 to 5.3 billion euros).