Executive Search Firm News - Food Products Trends

Food products executives: Consumer prices modest in 2006

While food manufacturers and distributors are facing substantial cost increases, the impact on consumers will be “moderate”, according to food products executives.

Large food makers like Kraft, Hershey and Flower’s Foods, among others, announced 3% to 5% increases on the retail side due to rising fuel and energy costs. The impact of the increases to consumers will translate into a 2.5% to 3.5% rise in the Consumer Price Index, according to experts in The Food Institute’s “Input Costs to Consumer Pricing, What’s Ahead in 2006.”

USDA economist Ephraim Leibtag notes that consumers will be hit in the first half of the year and recommends food products and consumer products executives take measures to minimize the impact:

• Make use of better inventory management and cost-saving technologies
• Take advantage of year-round availability of globalized trade products
• Look to nontraditional retail formats to maximize ability to compete
• Food-away-from-home will continue to trend upward
• Answer consumer’s increased demand for convenience, quality and low prices.

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