Food Manufacturers’ Surprise Profitability Set to Continue, High Prices Will Test Consumers
By Rob Fox
February 10, 2022
- Before the pandemic, conventional wisdom held that cost inflation squeezes food manufacturing margins, but that did not happen in 2021.
- A perfect storm of increasing input costs in mid 2021 led to a series of pricing adjustments, some of which are just now hitting grocery shelves. Additionally, consumer food spending has not returned to pre-pandemic patterns, upending industry expectations.
- With pricing actions taking full effect and consumers’ grocery demand continuing to be strong, retail food manufacturers will continue to enjoy robust profit margins in 2022.
- The Consumer Price Index (CPI) for food at home will remain elevated through 2022, and may even edge higher in the first half of the year.
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