In some ways, it’s tough to believe that General Mills
Not all is rosy in the land of food, though, Yes, General Mills plans to increase prices more than it already has, but its profit did drop by 17.4% last quarter on a 22.6% jump in cost of goods sold (imagine how much worse it can get as corn prices grow and grow). And situations like this are the prevailing story across the food-producing industry right now, with higher food pricing leading to minimal, if any, gain in profits. ConAgra
So, the foodies aren’t going under, but they are struggling to keep up with rising commodity costs. How do they plan to satisfy their hunger for higher profits? International growth looks to be the answer.
Stocking up on global goodies
American food producers aren’t the only ones with an international shopping list. Del Monte Foods
While things are lukewarm for Smithfield Foods and others, Campbell Soup
Will desperate times call for generic food?
It’s definitely a mixed bag right now for the foodies. With no end in sight for rising commodity costs, food producers must continue to look for new growth markets. Whether the growth comes internationally or domestically, these companies will continue to balance major cost jumps with revenue expansion. The bigger question is whether companies such as General Mills and ConAgra will continue to wield pricing power. Times aren’t so bad that folks are going to the generic Wheaties right now, but you have to wonder whether that time will come.
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