Last year, when CTH discussed the original Kraft-Heinz wholesale notification for January 2022, we warned it was only the first round. The reason for waves of price increases is specifically, because each of the processed food categories is impacted differently depending on the amount of processing involved. Each category is different.
This understanding is why we warned everyone in October of last year to make as much preparation as possible for waves of food inflation. The original notification for contracted terms in 30, 60 and 90 days was +20%. Meaning this month, on those group and sectors, prices to retailers went up by 20%, and you are seeing that in the supermarket now.
For the next wave, Kraft-Heinz is telling wholesalers the fulfillment shipments arriving in March will be up to +30% on the next categories. Oscar Mayer proteins will be the biggest increase at the top end (+30%), Maxwell House coffee on the lower end (+5-10%) and the juice and drink category around +20%. [A $5 beverage pack will cost $6 in a few short weeks.]
The processing sector is still dealing with cumulative cost increases. The fulfillment terms are still catching up with the increased costs. These announcements are ON TOP OF the current price increases we are feeling. We are entering hyper-inflation.
If you look at the notification timing from Kraft foods, January 24th, you will see the categories we predicted to come next are the exact categories being outlined in this wave.
(VIA ABC) […] The increases range from 6.6% on 12oz Velveeta Fresh Packs to 30% on a three-pack of Oscar Mayer turkey bacon. Most cold cuts and beef hot dogs will go up around 10% and coffee around 5%. Some Kool-Aid and Capri Sun drink packs will increase by about 20%.
“As we enter 2022, inflation continues to dramatically impact the economy,” Kraft Heinz said in a letter dated January 24 to at least one of its wholesale customers that was viewed by CNN Business. The wholesaler shared the letter on the condition of anonymity to protect the company’s relationship with its suppliers.
[…] If retailers decide to pass on any of the increased costs, these items will be more expensive for shoppers in stores. US consumer prices rose 7% annually in December, the steepest climb in 39 years. Kraft Heinz has already raised prices on some of these same foods in recent months.
In October, the company said it would increase prices on Oscar Mayer cold cuts and hot dogs. In November, it said prices on Oscar Mayer beef, lean beef and Angus hot dogs, cheese dogs and other products would go up by around 9%.
But since those November hikes, Kraft Heinz said in the letter, it has faced “constrained supply, logistic bottlenecks and weather-driven crop losses.” The company’s costs have increased, including on raw ingredients and freight, leading it to bump prices yet again. (read more)
These same major manufacturers are the same companies that make the “off label” or “private label” products that are sold under various retail brand names. After the big guns raise their prices, the private label price increases will come in the next wave, because they are made by the same people using the same raw materials and the same processes.
Keep in mind the points we noted in December:
(1) The outlined price increases noted are against current price terms and contracts. Meaning, these are price increases from right now to the next fulfillment. These are not inflation price increases which are compared to a year ago. These are increases from the current price right now.
(2) The price increases are not the final price increase. This is the price of a contract today from the field to the distribution center. The retailer also has additional price increases (transportation, energy, labor, etc) which they need to add to the wholesale price before you see the final price at retail (grocery store).
The final field to fork price is not yet known but will be higher than noted above. We are only seeing the notifications from field through processing and into warehousing and distribution.
Additionally, the more an item needs to be processed, the higher the price increase will be. Food items that require multiple raw materials, ingredients and bases for processing (ex. condiments), when combined with increased packaging costs (oil, energy), will be much higher than foods with less processing, handling and packaging.
This has always been the nature of this specific supply chain.
Example: Many products, food, drinks and even cleaning products, contain citrus bases, additives, flavorings and distillation. Those products will be much higher in price due to the price increases in raw materials, combined with higher energy and petroleum costs. It is an issue of cumulative price increases in the production of the product from beginning to end.
CTH has recommended preparing for these massive increases in 2022 prices, by thinking about the base products you use to make meals at home and holding an extra supply of shelf stable products, so you won’t hit the grocery store and face those massive increases.
A working class family, who typically spends $200 to $300 a week on groceries, is already getting hammered at the gas pumps and grocery store. Another $50 to $100 bucks on top of the grocery bill each week can be very stressful.
Even if you don’t have kids at home, perhaps your adult children have kids. Your proactive position can help them, perhaps your neighbors and others, at times of greatest need. Pride can often stop people from asking for help, so look behind the eyes of those who hesitate to accept it.
The price increases will not only hit retail grocers hard, but they will also hit restaurant and industrial food supply companies like Sysco. Food away from home will increase in price, because the food suppliers are all experiencing the same price increases.
Food, fuel and energy price increases will continue to be the most impactful problem into 2022. The problem will compound, because buying offices of the large multinational corporations enter this phase of consumer and commodity squeeze by looking to leverage their size for competitive advantage.
Large multinationals will make advance order purchases today at higher prices. Advanced purchasing becomes a competitive advantage, and they leverage that in the supply chain. The downstream consequence is a material shortage, because the commodity is wiped out, which drives up the price and then those same multinationals execute distribution to a higher profit.
This gaming of inventory for profit, or inventory evaluation/capitalization, is a less discussed outcome of rapid inflation. Multinationals have deep pockets, and they can maximize profits by executing advanced purchase orders to lock in commodity prices. Unfortunately, the little guys have a tough time competing against them when the inventories dry up.
While the examples above all relate to fast turn consumable goods, the same purchasing leverage is used by large corporations on durable goods. Retailers, large and small, then begin competing to secure inventories while supplies are limited; this too drives up prices. It’s a hot mess of competition that squeezes the consumer even harder.
The only thing that stops this process is the inevitable collapse in demand, but that outcome sucks also. In the interim, I hope and pray to have provided y’all with enough advanced notification so that all of us can ride this inflation storm out just a teensy bit better than if we didn’t know it was coming.
Boycott Heinz.
Easier transition since you can’t buy it anyway.
Contribute to the end of multii-national hegemony over food.
I haven’t bought Heinz for years – John Kerry.
When the food gets scarce, start the Every Other Day diet. Eat normal day 1, only 500 calories day 2. Repeat. It’s a form of Intermittent Fasting. Throw in a few all day fasts as well, and it’s great for your health.
When I do an 18hr/6hr intermittent fast cutting out dairy and bread, I save a substantial amount of money. I haven’t been on that diet for a few months and am starting it again. More importantly I feel much better on that diet.
I’ve been on a 24/4 for more than two years now.
My wife noted that our food bill is rather low and our nice built in fridge has room in it.
Now, the freezer and fridge in the garage, long term storage, are a different thing. 😉
Do you have a nutrition plan for those that don’t need to diet?
Asking for a friend.
It’s not really a diet, even if you don’t need to lose weight you can IF, it’s great for your health. Personally, I count calories, trying to get in better shape to survive the upcoming Zombie apocalypse.
It’s called the “Maduro Diet”. The average Venezuelan lost 26 lbs in 2017. I wonder how much we will lose on the “Biden Weight Loss plan”.
Can’t we just arrest the people responsible for the increase in prices?
What diet should I try after the Government makes your compensatory diet the official law of the land and it can no longer save me any money? Maybe then I should downsize to a one room apartment to save money. After that, maybe we should start riding public transportation instead of going where we want in our own cars. How about going to the Government run Emergency room to get their version of health care? How about fruit and veggie pills instead of actual fruit and veggies? Do you get it yet?
You are entitled to believe whatever you want about dieting, but don’t tell me I should follow your fasting recommendations. That won’t fix the supply chain situation.
My junior high school showed us a documentary about the death camps back in 1970. I am grateful that they did.
Why eat any of Kraft’s products?
Its all adulterated and full of cancer causing chemicals
Time to make your own or support you local organic manufacturer
Eg
You can make you own peanut buuter and tomato sauce and jam/jelly
Grass clippings from pesticide and herbicide free lawns, as well as fallen leaves, are good soil amendments. Seeds can be obtained through barter, and even from the dollar stores. Many cities and towns have community gardens.
Some even permit people to own a few hens. About a hundred and fifty years ago it was common for families in cities to have a small flock of hens and even their own dairy cow.
My point is that there are more options available to survive, even in the city, than many people realize. It is not likely that most folks can raise all their own food in a city, but anything you can do will help you to be less dependent on a very fragile supply chain. It might make the difference between being hungry sometimes, and starving.
But do something NOW. Spring will be here soon.
If I were just starting out to try to raise food in the city, I would sign up for a community garden plot and I’d plant most of it to potatoes, a couple of different varieties. I’d mulch them heavily with leaves or herbicide free grass clippings (important, because what kills weeds can also kill your garden plants,) to save on watering. Potatoes usually bear heavily and are a calorie rich, nutritional powerhouse. Carrots are good, too. Both are easily stored in a cool (not cold,) dark space, no special equipment necessary. Oh, don’t forget onions, too!
I’d also see if I could have a couple of laying hens, suited to my climate. A couple of hens don’t require a lot of feed, but I would stock up on feed, enough for a year. A couple or three hens don’t require a large coop or run.
And save the manure and bedding for next year’s garden! Eggs are an excellent source of protein and fat.
I suggest buying beans and rice NOW, if you haven’t already. Cooking oil, too. Also get some good multivitamins and vitamin c and d and zinc.
A crockpot and pressure cooker are useful to prepare foods easily. Often you can find these cheaply at yard sales or thrift stores.
Will you get tired of this fare? Sure, in time you might, though there are lots of very delicious recipes using these ingredients. But if the choice is between “beans again?” and ” Mommy, I’m hungry!” coming out of the mouth of your gaunt five year old, who hasn’t eaten in three days, I think most folks would be happy to do what is necessary to make sure there is food in the house, even if it is just beans, rice, spuds and eggs. Boring is better than starving.
Lots of info on the web and YouTube, in libraries and magazines, at your local community college and local gardening groups.
But get started NOW.
Stock up on spices, herbs, and seasonings to make your beans and rice taste delish. Better than Bouillon or bouillon cubes, packets of True Lemon (dried lemon juice]. Tomato powder. Salt.
New York and SF had the solution. They just let low life loot under 999. s/
American investment firms snap up €15 billion of Dutch housing market
According to the researchers, investors own 1.8 trillion euros of real estate in Europe. American investment companies and pension funds have bought 579 billion euros worth of European homes. The American firm Blackstone, which also owns many homes in the Netherlands, is now one of the largest landlords in Europe with 117,000 houses. For comparison, that’s twice the number of homes in Dordrecht.
https://nltimes.nl/2022/01/27/american-investment-firms-snap-eu15-billion-dutch-housing-market
I heard Blackstone has been doing the same in the USA.
That would be Larry Fink a major player in the Climate Change Hoax!
You mean BlackRock and they are connected to China
Yes – our daughter and SIL tried to buy a home this week and were outbid by 100K………..who does that……theres your answer
They make me sick! I hope the real estate market falls out the bottom and all those people can snap up their foreclosures for a song! None of the Dems seem to care about Blackrock in the White House. Remember the Occupy nuts and the 1%? Where are they? I hope the hypocrites are dying in vaxxed agony!
Blackrock personnel and other banking industry players are running our country, and destroying it at an unbelievable pace.
There are still costs filtering down through the cost structure of goods and services that are not yet reflected in these announced increases. There are increases yet to be added on. The cost of gas and food are swallowing up people’s disposable income that will all trickle down and hurt the poor and middle class.
Does John Kerry have to give 10% to the big guy too?
The big guy is probably giving 10% to John…
It is a monumental task each day to stay in business. You can’t get paper for labels, film for packaging, card board for boxes, people for processing lines, raw materials,trucks for delivery, and when you have the trucks you can’t get them unloaded at the warehouses because they don’t have the people.
I’m hearing that at every small business I walk in…..very frightening and sad.
Where are all the workers? I don’t get it. Do we have full employment now or are the benefits high enough that working is no longer a preferred option?
Refusing to work is one way to break the system. It’s not pleasant, but at least it’s not violent. There are other non-violent, and equally unpleasant, ways to break the system. Then leave the rest to those with little to lose. Stay safe, feed oneself, survive. The rest will be what it is.
My understanding is that many working age people have died. According to a large insurance company the death rate of working age people increased 40%.
I can’t recall the name of the company nor the site where I read this, ( maybe this one, or perhaps Zero Hedge?)
If you are a citrus eater save the peels of several oranges/lemons, put them in a sealed jar w/plain white vinegar. Use plastic wrap between the lid and jar. Let it sit for a couple of weeks, then put the liquid in a spray container. It makes for a great all-purpose cleaner. There are quite a few UTube videos on it. Recycling is going to have a new connotation. I think of El Rushbo mocking the media hagfish from CBS, “recycling!” Made me laugh every time.
Aren’t most of the vitamins in the peels – why not eat them?
When Joe is out and all these problems are all fixed, the pipeline is open and running again, etc., do you think food and gas prices will go back down? In other words, do you think inflation will cease to exist at some point with lower prices?
No, that would be DE-FLATION, and IIRC, last time it happened was in like,…1930.
After the inflation of Carter was brought down under Reagan, prices didn’t go down, they just didn’t go up as fast anymore.
Besides, they have spent like drunken sailors, for last 3 administrations, while holding off the inflation it would cause, with low interest rates.
IMHO, the economic system is already broken beyond repair, and no, prices will never go back down, we will NEVER get back to where we were pre-covid.
Having been an adult through both periods I’d say the marked difference from then to now is back then inflation was high, interest rates were high and interest on savings was high. It was all high. I remember it well due to taking savings out of a high interest savings account to put a down payment on a new house with a high interest mortgage.
Today, we have accelerating inflation with low mortgage and savings interest rates, obscenely low.
After the last crash in 2008-2012 I opined the next one would make it look like a pleasant sunny afternoon. It’s coming. I hope good God-fearing folks have a chair when the music stops because hitting the floor is gonna hurt.
Yes, inflation ebbs and flows based on demand… yet the cost of living does keep going up incrementally.
Dems recognize that a lot of people cannot keep up so the safety net becomes wider and wider to the point where, for a large swath of people they will simply subsist on government handouts.
Socialism.
Sundance, I can’t thank you enough for all of your advance warnings and information. It has been invaluable in preparing for what lies ahead and helps to reduce stress associated with the coming storm. I hope you know how much you are appreciated.
You can ad paper products as well.
Bread will be given him, His water will be sure. ~Isaiah 33:16
💋✝️💋
Will the UniParty Republicans ever use this devastating information in election ads?
Of course not. We’re all collegiate here.
https://www.thegatewaypundit.com/2022/01/biden-crime-family-made-5-deals-communist-chinese-elites-worth-31-million-hunter-biden-family/
It’s the UniParty, so…no…
Stopped buying their poisonous crap over 20 years ago. I generally don’t buy foodstuffs from multi-national mega corps. They are all seeking continued monopoly power with the help of your tax dollars.
Homemade ketchup –
Ingredients
Original recipe yields 48 servings
Ingredient Checklist
https://www.allrecipes.com/recipe/232397/homemade-ketchup/
A lot of work to save $.75.
No doubt it is better if you make your own, saving the recipe – but I use Red Gold Ketchup & Blue Plate Mayo & I just started making my own Baked Beans & Blackeyed Peas using Goya Dried Beans.
On a purely economic basis it’s nearly impossible to compete with economies of scale, particularly in agricultural products. I was proud to be a part of its infrastructure for most of my adult life but have no illusions. What Sundance writes about is reality.
Myself, I’ve forgone condiments and simply eat tomatoes instead of using ketchup, eat cucumbers instead of pickles or relish, etc, etc. Or, instead of using ketchup I make a simple salsa and use that for a wide range of dishes to add some spice.
Still, buying a bottle of ketchup, purely from an economic standpoint, is a better deal. Or that jar of salsa. Or pickles. Or relish. Etc, etc.
It only follows that food pilfering will greatly increase. We’ll probably see AOC and Bernie calling on the progressive DA’s not to prosecute food theft as a human right to food. As we’ve seen pharmacies close, watch for grocery stores to follow.
they already are…food deserts…
Yeah, I wouldn’t be surprised if one of the two grocery stores in the nearest town closes at some point. One is a national chain, the other is a two-county local family owned chain of a half dozen or so stores. I can only imagine the pressure they’re under. I’ll shop there until they close, if they do.
I’ve done that before in another rural town, one that Walmart came to and drove the locals out of business. It’s the only time, until now, I’ve seen a grocery store in the U.S. with empty shelves. They were selling off the remaining stock before closing the doors.
Before that, it was Russia and Ukraine, the regular stores, empty shelves there, but plenty of selection at the boutique stores where people with money shopped. I had dollars so could pick and choose. Stark reminder of Communism though.
I know how to fix this overall problem…let’s go to WAR !
That may happen if they do something dumb like start up WW3 with what’s going on in the ME/Ukraine/Taiwan. Perfect time to strike. Wars take enormous resources and, well, we’re how the resources get to the war zone. Besides field to fork, we’re key to every part of the supply chain for anything domestic, and military.
Remember when they sold war bonds for WW2? Can you imagine that now? Heh. 😀
I sell to the manufacturing END USER and OEM market
(The folks that make stuff and make the equipment that makes stuff.)
Not only are we struggling to get the products to keep them up and running or shipping machines.
Constant price increases are now the norm.
It’s not just Ketchup that will cost more.
Everything.
I work retail. We just updated prices throughout the store. Most prices were modest, .50 cents to a dollar on most things. Some prices though, went up 10 dollars…
I noticed last night that a bottle Ketchup was suddenly $1 more.
Of course the retail price increases immediately on such announcements. That is why they make them. So their customers will raise their current prices to be able to afford restocking.
I expect to hear screechy lectures about “gaming inventory for profit” from Fauxcahontas soon.
Will Jon Carry give himself another Purple Heart for injuries suffered by his wife’s corporation?
To make window cleaner – warm water, Denatured Spirits & a couple of drops of dishwashing detergent. Some people like to add white vinegar, but I don’t think it really makes much difference in my opinion.
Am curious. Why is my Kroger in NE Indiana running terrific Kraft sale this week? With coupons, etc:
Kraft Singles (16 ct) $1
Heinz Ketchup (38 oz) $2
Kraft mac’n cheese 56 cents/box
I’ve already collapsed my demand, living on five bucks a day for food the last couple years. Good training for tough times.
I also track a basic basket of food items and note the winners and losers in the inflation game so far. Noting the picture of Kraft Velveeta, I’ve been impressed with the price stability of their cheese sauce over the last couple years and will be interested to see how the current environment affects it.
I also watch processed seafood, chicken, turkey and beef products. So far, in my basket, seafood has been the most stable, particularly tuna, with chicken behind it.
In some ways this is little different from what I dealt with as a young adult shopping for groceries during the high inflation of the late 70’s and early 80’s. Shop sales, use coupons, stretch products, limit extras. BTDT.
The main difference is back then the societal discord was much different and far less pervasive and we didn’t have a government forcing medical treatment down our throats. The food part, no biggie. We’ll survive.
Election Fraud put Joe Biden in the White House.
The Economic Policy of Democrat politicians will economically
cripple the USA and demolish the Supply Chain.
Inflation will obliterate the buying power of the Middle & Lower Class.
Excellent opportunity to BDS the lefty pukes.
While fresh produce prices are increasing as well, it’s nothing compared to processed foods. The solution is simple and will save you money in a multitude of ways. Don’t eat that crap. it’s more than garbage, it’s poison. You’ll be eating a much healthier diet and consequently will have fewer, if any. medical problems. Diet related disease is easily the most avoidable cause of death.
Same with feedlot beef and industrial raised pork & chicken. Buy local, the beef is usually grass finished. The cost of steaks is ridiculous but if you can buy in bulk, even a 1/4 side as we just did, the price of the beef was $4.50/lb. You can buy small amounts of humanly raised pork for just a little more than pork raised in feces, crammed together like sardines. Do you think that meat is healthy?
I know it’s not possible for a lot of folks but raising food in a small garden or even hydroponically is healthier and cheaper.
These huge multinationals and our “representation” in DC are for all intents & purposes, out to crush us. Stay healthy, buy local.