Home Economy Kraft Heinz CEO: Inflation and supply shortages are here to stay for a while

Kraft Heinz CEO: Inflation and supply shortages are here to stay for a while

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New York
CNN business

Kraft Heinz CEO Miguel Patricio said: higher inflation When supply problem is going through food industrycompanies are being forced to adopt new strategies for everything from production to promotion to packaging.

And he doesn’t think either problem will end anytime soon.

“We have already raised the prices we expected this year, but we also expect inflation to continue next year, and as a result [we] In an interview with CNN Business, Patricio said:

In the second quarter ended June 25, Kraft Heinz raised the price Overall, it increased by 12.4 points compared to the same period last year. The company is expected to report third-quarter earnings on Wednesday.

Beyond the dual challenges of raw material shortages and inflation, problems like the ongoing pandemic, war in ukraine When climate change increasing uncertainty.

“It was very difficult,” said Patricio. “This has been difficult for the industry as a whole.”

Patricio told Kraft Heinz

We have tried to “minimize inflation in everything we do” because “it is very easy to pass the price on to the consumer, but it has consequences.”

So, in order to keep costs low for the end consumer, Patricio said his company is “much more efficient in our factories” and needs to be careful with procurement costs.

Kraft Heinz also incorporates various packaging and pricing options for consumers. This includes bulk value packs of craft macaroni and cheese and different bottle sizes for products such as Heinz Ketchup for shoppers looking for smaller, lower-priced options.

“It’s a constant battle to try to minimize price increases,” Patricio said.

Part of that battle is Patricio’s “relentless” pursuit of potential supply chain issues. Nearly three years of his endeavor have enabled the company to anticipate where failures will occur and respond quickly.

“We face new problems every day. That’s the new normal,” he said. “At first I thought it was a crisis, but now I know it’s the new normal and we have to adapt.” You can win if you adapt faster. And this is what we are trying to do. ”

However, these supply issues are more widespread than in Covid times. For example, three years of devastating drought have resulted in a shortage of tomatoes.

“There’s something missing every day,” Patricio said. “useless [that] Crops fail due to global warming. So the world is running out of tomatoes, running out of potatoes, running out of beans. ”

Despite that tomato shortage, Patricio swears heinz ketchup It will remain on the shelf as usual.

“We bought it in advance because we predicted problems with the tomato harvest,” he said.

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