Sending your children off to school with a healthy lunch and snacks may prove more costly this fall.
Kellogg expects commodity costs to rise 8% this year and sees a "fairly significant" rise in costs next year as well. As a result, it has planned more aggressive price increases on cereal, snacks and other food products, expecting price hikes between three and four percentage points.The company is also offsetting rising costs by reducing discounts, introducing new items at higher prices and shrinking its packaging. Heinz has raised prices on its signature ketchup and Ore-Ida potatoes. The company has said the prices of almost everything it puts in its products has increased and it needs to offset those. Kraft said it is facing higher prices for dairy used in cheese (milk prices have spiked more than 40% this year), coffee used in Maxwell House and wheat used in Wheat Thins crackers. Low-price leader Wal-Mart (WMT), which carries many of these brands, raised prices on a number of grocery items earlier in the year, specifically on dairy and meat.