Mondelez Faces Cost Pressures, Price Hikes Amid 'Make America Healthy Again' Movement
Mondelez CEO Dirk van de Put has announced that the company will face increased production expenses due to the "Make America Healthy Again" (MAHA) initiative led by U.S. health secretary Robert F. Kennedy Jr.
MAHA aims to reformulate U.S. food products by eliminating certain ingredients and food dyes, potentially requiring Mondelez to alter its recipes for brands such as Ritz crackers and Chips Ahoy cookies. The company operates in both Europe and the U.S., making recipe adjustments less complex, according to van de Put.
"It's work that needs to be done," he said. "It's cost that will come."
These additional costs are expected to translate into higher prices for consumers, who are already experiencing unprecedented food inflation caused by supply chain disruptions during the COVID-19 pandemic.
Van de Put noted the continued rise in ingredient prices, including eggs, cocoa, and coffee, as contributing factors. He also predicted a significant increase in chocolate prices, citing supply issues in Africa.
"U.S. consumers are still reeling from once-in-a-generation levels of food inflation," he said. "I do expect it will take us a few years to work our way through this."