Published on : Aug 05, 2014
The effects of inflation are being observed in practically every sector starting from manufacturing to services. The food industry is also a victim of inflation with rising food costs. Hershey, a popular snacks and chocolate maker has declared a price rise by almost 8% across a significant chunk of its US portfolio. The reason behind the price rise is the surging commodity spot prices of the raw materials for chocolate making which include nuts, cocoa and dairy products.
In North America, Mars, the producer of Snickers and M&Ms has also increased the prices by 7%.
Kraft Foods has raised the prices of the cheeses ranging from 5% to 12% and held the rising commodity prices responsible for this overall price rise. It was also observed that prices for meat products like pork, beef and turkey have also been increasing.
US fast food joints are getting highly affected due to the increasing costs of the commodities. This significantly affects the prices of their fast food products which as a result reduces the demand for their products.
Popular coffee brands like JM Smucker, Kraft and Starbucks are also facing rising prices of raw coffee which as a result will lead to higher prices of packaged coffee and related products.
The owner of Frito-Lay snacks, PepsiCo, also experienced a decline in the profits due to surging prices of the newer products introduced by them. The company believes in the positive effects of innovation and has introduced interesting flavors for Lay’s.
Globally, consumers are feeling the burden of inflation.