Expect Higher Prices for Consumer Products

Coca-Cola, P&G, Kimberly-Clark announce upcoming increases, citing higher commodity costs.

April 21, 2021

Searching Wallet

ALEXANDRIA, Va.—This week, several companies announced price hikes in consumer products, ranging from popular beverages to pharmacy goods. The companies are betting consumers will pay more for the brand version instead of opting for a private label as commodity costs rise. However, what consumers ultimately decide will largely depend on the economic recovery process.

Procter & Gamble announced it will raise prices on baby care, feminine care and adult incontinence products in September to respond to higher commodity costs. Also boosting retail prices are companies such as Coca-Cola, Kimberly-Clark and J.M. Smucker, according to CNBC.com. P&G said its price increases will be in the range of mid-to-high single digits.

“This is one of the bigger increases in commodity costs that we’ve seen over the period of time that I’ve been involved with this, which is a fairly long period of time,” Jon Moeller, COO, P&G, told analysts. He added that the company is assessing the raw material costs and foreign exchange impacts on other categories as well, which could mean more price increases in the future.

Coca-Cola’s bump in prices will come in the form of increased prices on drinks to combat the impact of higher commodity costs, CNBC reports. The beverage manufacturer didn’t mention which products will be affected.

James Quincey, chairman and CEO, Coca-Cola stated, “We are well-hedged in ’21, but there’s pressure built up for ’22, and so there will have to be some price increases. We intend to manage those intelligently, thinking through the way we use package sizes and really optimize the price points for consumers.”

After the pandemic began, Coca-Cola shifted its production to focus on larger bulk packaging aimed at consumers who were spending more time at home and stocking their pantries. Coca-Cola and rival PepsiCo had been promoting smaller cans and bottles before the pandemic, which usually carry a higher price per ounce for the consumer. On Thursday, Pepsi executives said that they expect smaller packaging to return in the future.

Not a NACS Magazine or NACS Daily subscriber? Subscribe to NACS Magazine in a print and/or digital format to read the latest insights from industry thought leaders each month. Subscribe to NACS Daily to receive a roundup of industry news and trends in your inbox each weekday.

Advertisement
Advertisement
Advertisement