General Mills Inc. is bracing for an uncertain year as consumers emerge from spending more time at home during the coronavirus pandemic and costs pick up.
The maker Cheerios cereal, Häagen-Dazs ice cream and other grocery products expects pandemic-fueled trends, such as the growth in e-commerce and the prospect of continuing remote work for some office employees, to have lasting effects on shopper behavior, Chief Executive Jeff Harmening said in prepared remarks Wednesday.
“We are ending one period of significant consumer disruption only to start another,” he said.
Inflationary pressures are expected to pose challenges for General Mills during its new fiscal year. The company anticipates logistics costs to rise by a double-digit level during its new fiscal year, which began May 31, and expenses for raw materials and packaging to increase by high-single-digit levels, finance chief, Kofi Bruce, said.
As expenses increase, General Mills has already moved to raise prices and is working on cost-saving efforts. Other package-food manufacturers, including Campbell Soup Co. and J.M. Smucker Co. , also are facing higher costs and looking for ways to offset them, including through higher prices.