“All the packaged meat suppliers are coming to the price increase party,” said a leader at one regional distributor to stores who spoke on the condition of anonymity to protect their company’s relationship with suppliers.
“Meat is center of the plate for Americans, and these price increases will hit hard,” Chris DuBois, the senior vice president for protein practice at market research firm IRI and who consults with grocers on meat trends and strategies, said in an email.
Tyson sent a letter to at least two regional distributors last month in which it said that prices on Ball Park, Hillshire Farm, Jimmy Dean, State Fair and all deli meats will increase by a range of 5% to 10.2% beginning January 2 for “all retail customers.” The distributors shared the letters with CNN Business on the condition of anonymity.
“We continue to face accelerating levels of extraordinary inflation,” Tyson said in the letter. “The sustained duration and significant impact of the inflation necessitates additional pricing action.”
A Tyson spokesperson said in an email to CNN Business that the company was “carefully managing these inflationary pressures through pricing actions and efforts to reduce costs.”
Conagra alerted one of the distributors this week that it will hike prices starting January 24 for varieties of Hebrew National hot dog packages, such as beef franks, 97% fat free beef franks, and jumbo beef franks, as well as quarter-pound and bun-length beef franks. The price increases range from 10.9% to 12.6%.
In the letter, Conagra said it was cutting costs throughout its operations, but the “sustained increase in packaging and ingredients will require” the company to raise prices.
A spokesperson for Conagra did not say how many retail customers were notified of price increases.
Kraft Heinz said in a November 1 letter to retail customers that it will raise prices for varieties of Oscar Mayer beef, lean beef and Angus hot dogs, as well as cheese dogs, by around 8% effective January 9.
A spokesperson for Kraft Heinz told CNN Business the price increases applied to all of the company’s retail customers. The company has increased prices by an average of 5% on 80% of its products “to help offset the escalating inflation that the entire industry is facing,” the spokesperson said. At the same time, Kraft is also introducing more affordable price points and value sizes on brands such as Lunchables.
Price increases on meat and other grocery store staples may force changes to consumer behavior and pose a threat to supermarkets, said IRI’s DuBois. When prices at customers’ regular stores become unaffordable, they are more willing to leave the store for cheaper ones.
“That’s the big unspoken danger that many retailers are worried about right now. We could see some big retail market share shifts starting next year.”