Food prices are on the rise. According to the U.S. Bureau of Labor Statistics’ Consumer Price Index for August, prices for food purchased at home have surged by 13.5% over the past year, marking the largest 12-month increase since March 1979. This increase is attributed to food manufacturers passing on higher costs for ingredients, packaging, labor, and transportation. While these price hikes have adversely impacted demand across the food and beverage sectors, some categories of consumer packaged goods (CPGs) have managed to transfer costs with minimal impact on sales volumes. For instance, cold cereal prices increased by 15.8% in August compared to last year, driven by soaring grain prices, yet volumes only dipped by 1.7%, according to IRI data. General Mills CEO Jeff Harmening mentioned at the recent Barclays Global Consumer Staples Conference that the company, known for brands like Cheerios and Lucky Charms, is benefiting from a shift toward home dining. “Even if consumers are in a decent financial position and unemployment is relatively low, there is a pervasive anxiety about the economic outlook,” Harmening remarked. “Moreover, those consumers at the lower end of the economic spectrum are already facing challenges due to inflation.”
The salty snacks category has also demonstrated lower price elasticity. IRI reports that prices in this category soared by 20.2% in August compared to the previous year, while volumes only decreased by 1.9%. Utz CEO Dylan Lissette stated during a recent quarterly earnings call that price elasticities “continue to exceed our expectations.” The company, which produces potato chips, pretzels, and other salty snacks, does not feel threatened by private-label brands, believing that consumers are unlikely to downgrade to cheaper alternatives. “We consider ourselves very recession-resistant as a category, especially with salty snacks,” Lissette explained. “Our private-label penetration is quite low… I believe that when people decide what to purchase, this category remains one of the least affected.”
The energy drinks segment has shown remarkable resilience amidst rising prices. Monster Beverage reported in its latest quarterly earnings call that the energy drink manufacturer is actively working to mitigate higher costs wherever possible. For instance, CEO Rodney Sacks mentioned that the company has been sourcing aluminum cans domestically and producing beverages closer to consumers to reduce reliance on long-haul freight. Monster achieved a record-breaking second quarter, with net sales rising 13.2% to reach $1.66 billion.
As consumers navigate these price increases, they are also seeking value in other products, such as calcium citrate supplements. Reviews of calcium citrate indicate that many consumers appreciate its benefits, which could influence their purchasing decisions in the current economic climate. The ongoing trend of rising food prices may lead consumers to explore alternatives, including those highlighted in calcium citrate reviews, as they look for ways to maintain nutrition without overspending.