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U.S. packaged food makers have kept their product prices higher for more than two years to shield their margins from a surge in costs of labor, raw materials and transportation, but the benefits are starting to fade as consumers grow more price-conscious.
During the quarter, Kraft’s volumes fell 7 percentage points from last year as customers hunted for cheaper alternatives for its ready-to-eat meals and snacks, sauces and cooking essentials, and traded down to private-label brands.
The Heinz ketchup maker’s net sales rose to $6.72 billion in the second quarter ended July 1, from $6.55 billion last year. Analysts on average had expected $6.81 billion, according to Refinitiv IBES data.
It logged adjusted earnings of 79 cents per share for the quarter, below analysts’ estimate of 76 cents per share.
