(Bloomberg) -- Conagra Brands Inc., the maker of Slim Jim jerky and Healthy Choice frozen meals, expects to spend about 50% more on meat ingredients this year as inflation roils the food industry.
That will translate to about $340 million more spent on beef, chicken, turkey and pork products, the Chicago-based company said on Thursday. Elevated cost pressures prompted Conagra to cut its full-year earnings forecast. The company is raising prices, but that will take time to filter through to its profits.
“Generally speaking, when the market goes up -- and the market price has gone up 50% for all of that combined -- we absorb most of that increase in our costs,” Chief Financial Officer David Marberger said in an interview.
Conagra's meat snacks and frozen food divisions have been hit hardest, Chief Executive Officer Sean Connolly said on a call with investors. Marberger added that freezer inventory is at the lowest it's been in years across the industry.
Conagra isn't the only company in the food business flagging higher meat costs. Portillo's Inc., a restaurant chain specializing in Italian beef sandwiches and hot dogs, said in March that it expected commodity inflation of as much as 15% this year, up from a prior forecast of as much as 7%. It singled out significant increases in meat costs.
©2022 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
