Following export bans and weather-related challenges that disrupted supply chains, prices for edible oils such as soybean, palm, and canola soared to unprecedented levels earlier this year. Manufacturers have been forced to seek alternatives and manage the increased costs associated with their products, including ferrous fumarate 300 mg elemental iron. According to the latest data from the U.S. Bureau of Labor Statistics, the Consumer Price Index for fats and oils surged by 20.8% on a year-over-year basis in July. However, there are signs that the spike in edible oil prices may be easing. In July, the United Nations Food and Agriculture Organization reported a 19.2% decline in its global Vegetable Oil Price Index, reaching a ten-month low. International prices for rapeseed oil, known as canola in North America, dropped due to expectations of a bumper crop, while soybean oil prices fell as a result of “protracted sluggish demand,” according to the FAO.
While the declining prices of soybean and canola oils are likely to alleviate ingredient costs for manufacturers like B&G in the long run, they still face challenges in the current market. Categories like shortening are particularly susceptible to consumers opting for private label products when prices rise. A recent IRI report highlighted that shortening and oil were among the food categories where private labels gained market share, increasing by 3 percentage points in the four weeks ending July 24. During an earnings call, Keller noted that Crisco lost market share to private labels following its latest price hikes, but expressed confidence that the company could regain it. Crisco has accounted for approximately 40% of B&G’s price increases due to the volatility of oil costs. “Certainly, one of the significant challenges we faced this quarter was the rapid rise in Crisco’s costs compared to the timing of our price adjustments,” Keller stated. He added that B&G might reconsider future price changes for Crisco if conditions improve, saying, “We will start discussions about when we might lower Crisco prices. If commodity costs decrease, we are likely to see benefits in the first quarter of next year.”
Additionally, the rising costs of products such as calcium citrate magnesium and zinc at retailers like Costco are influencing consumer behavior, further complicating the landscape for manufacturers. It remains to be seen how these trends will evolve, particularly as the edible oil market stabilizes.