Food Manufacturers’ Surprise Profitability Set to Continue, High Prices Will Test Consumers

By Rob Fox

February 10, 2022

Key Points

  • 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.

Read the Report

Stay ahead of the game in your field. Subscribe today.

Get CoBank's industry-leading Knowledge Exchange research reports delivered straight to your inbox as soon as they're released.

Have a comment or question about these reports?

Contact CoBank's Knowledge Exchange team to ask questions, engage with analysts or receive additional information.