The CFO of Mondelez, a popular snack company, says he does not believe supply chain difficulties will relax in the upcoming year. He also added that some product prices could see an increase in the face of global inflation.
“I think when we look at supply chains across the world, there are inflationary pressures that are mostly due to the fact that there are several bottlenecks in supply chains that are globally interlinked,” Mondelēz International CFO Luca Zaramella told Yahoo Finance Live last week. He added, “I expect this to continue into 2022, for the entire 2022. I think the holiday season ahead of us will put even more strains on global supply chains.”
As a result of inflationary pressures, the company gave a heads up to U.S. consumers that they can expect to see a slight price increase of about 6 to 7 percent at least in the first quarter of next year. Zaramella said the change would be “thoughtfully” implemented.
“We have been somewhat implementing already some pricing,” he noted to Yahoo Finance. “I think for consumers though, it is important to notice that as a company we are very thoughtful as we pass [the] price…In the end we believe that supporting a brand, making sure the quality is there, and having the right prices is absolutely the right strategy for us.”
There does appear to be some optimism for Mondelez, the company behind brands like Oreo and Cadbury, according to Zaramella. “I think that we might see some things changing maybe into 2023, but quite honestly 2022, I believe is going to be a tough situation for global supply chains.”
At the end of September, the company reached an agreement with some of its union members on strike in an effort to “reset our U.S. supply chain.” Due to the strikes, the company expects to see an impact in the fourth quarter. Higher labor costs result in an inflation increase, which may end up being passed along to consumers.