Oreos, Ritz Crackers, and Sour Patch Kids are all made by Mondelez International. In November, the company raised its prices due to employee shortages and rising commodity costs.
In a recent article, The Wall Street Journal predicted that Mondelez’s expenditure is expected to rise again. As a result, customers should brace themselves for another price hike this year.
Why Are the Prices Rising?
Expenses for labor and shipping have taken a heavy toll on food producers of all kinds. High consumer demand for staples such as sugar and wheat has driven up raw material costs and resulted in a nationwide scarcity of these items.
The pandemic didn’t help. Limits on employee migration, changes in consumer demand, the shutdown of food production plants, and restrictions on food trade regulations all came along with the coronavirus. Ultimately, this situation may lead to a rise in food prices if the proper economic measures are not taken.
What to Expect?
Mondelez has announced no specific price increases for this year. Still, Van de Put thinks that the business needs to monitor supply chain difficulties. This is especially true in the United States, where the interruptions have been most noticeable.
Almost 1,000 union members went on a strike at the company’s plants over labor contract problems less than six months ago, prompting Mondelez to make the aforementioned price hikes. The company’s inventory was depleted due to these labor issues and the rising demand.
According to Van de Put, Mondelez can’t spend a lot of money promoting their snacks because of these difficulties. Additionally, there are “stimulated customers’ demand for comfort and indulgence,” two themes that have boosted Mondelez’s snack sales even as the epidemic continues to disrupt the supply chain.