Pandemic shortages and inflation are fooling with food prices again, and this time it’s the cost of some of your favorite cereals and snacks. General Mills has notified retailers that it will be raising prices next year on hundreds of items spread across dozens of household brands. The list reportedly includes Cheerios, Wheaties, Cinnamon Toast Crunch, Trix, Lucky Charms, Reese’s Puffs, Annie’s organic products, Progresso soups, Yoplait yogurts, Fruit Roll-Ups, Betty Crocker, Pillsbury, and more.
Officially, General Mills isn’t confirming the increases. A “major regional wholesale supplier” leaked to CNN a letter that General Mills sent retailers to inform them that the price of some products could increase by as much as 20% starting in mid-January. This would be on the extreme end, but that high rate is certainly concerning. When Kraft Heinz announced in November that the price of a few varieties of Mac & Cheese would be jumping by 20%, it was noted in a cascade of stories.
General Mills explained to those retailers that it was simply responding to surging ingredient, materials, and labor costs. “The current operating environment is as dynamic as we’ve experienced in at least a decade, resulting in significant input cost inflation, labor shortages, and challenges servicing the business,” it wrote. Back in June, it warned of consequences from the current “inflationary environment,” saying inflation was likely to eat up 7% of the company’s cost of goods sold.
Soaring grocery prices because of the pandemic are becoming increasingly frequent (we all just paid 24% more for a Thanksgiving turkey). As the latest Bureau of Labor Statistics data shows, prices for this October were 5.4% higher than last October’s. With its muscle, Big Food held out for months, but lately the major manufacturers are starting to crack. General Mills’ price hikes will have a lot of company in 2022, joining increases announced by Unilever, Kraft Heinz, Mondelez, and Procter & Gamble—which fill a staggering amount of Americans’ grocery carts, collectively.
Cereal’s fluctuating price has sort of stepped into the role of economic barometer (previously held by milk, until drinking it became a social-media punchline). But these price hikes are just at General Mills. Kellogg hasn’t followed suit (yet), but the company is dealing with its own, even greater problems: Inflation, plus 1,400 factory workers have been on strike at four of its main cereal plants since October 4. Today, news broke that Kellogg and the workers’ union have reached a tentative agreement, but this comes after months of warnings that Kellogg’s costs are rising. So who knows, Frosted Flakes and Apple Jacks could be next.