Kraft Heinz CEO: Inflation and supply shortages are here to stay, a new report contends
Posted on Jan 13, 2011 at 12:00 a.m. | Updated on Jan 13, 2011 at 4:35 p.m.
Cape Breton, N.S., Oct. 31, 2010 – When it comes to groceries, the price of eggs is not the only concern for Kraft Heinz Inc.’s Kraft Foods.
Canada’s inflation rate, expected to hit 2.5 per cent in the next 12 months, is also a key factor in the company’s decision to reduce its costs and increase its sales. The biggest concern is the rising cost in food.
Kraft Heinz has grown by expanding its products. And Kraft plans on continuing its aggressive expansion.
At a news conference Oct. 31, Kraft Heinz CEO H. Martin Aylward offered a brief explanation on why the company may be forced to increase the price of its products.
“I think what I’m hearing is that the inflation rate is getting, and will continue to get higher, and that can lead to some supply shortage,” he said.
“For me, there will be two effects,” he said.
“It’s going to be a supply challenge, and it’s going to be a inflation challenge.”
“Inflation of 2.5 per cent [can be good or bad,” said Aylward. “I think it’s a challenge, and I think they’re going to have to raise prices and reduce their costs. We’ll have to reduce them and raise them.”
Aylward explained that the companies will also have to do their part to make sure there aren’t any food product shortages, which could put food prices into a bubble.
“So it’s not just the egg, it’s not just for Kraft’s eggs that it’s the egg product that’s the issue, in my opinion,” he said.
“I think the company that can’t control is probably the consumer. And that seems to be the