Kraft Heinz tells shareholders that inflation is the biggest threat to their prosperity

Kraft Heinz CEO: Inflation and supply shortages are here to stay for a while Kraft Heinz, the giant food company that recently made an $11 billion bet on food safety, is telling its customers…

Kraft Heinz tells shareholders that inflation is the biggest threat to their prosperity

Kraft Heinz CEO: Inflation and supply shortages are here to stay for a while

Kraft Heinz, the giant food company that recently made an $11 billion bet on food safety, is telling its customers that the biggest threat to their prosperity is not the rising cost of foodstuffs but the “inflexible” cost curve of inflation.

“I believe that there will be some hard times ahead,” John Slosar, Kraft Heinz chairman and chief executive, said on an earnings call earlier this month. “I believe that there’s a softness in the demand, and when the demand softens, the cost of goods and materials rises.”

Since the recession of 2007-09, inflation has increased at a rate of about 1.4 percent a year, which has made the cost curve look more “inflexible” — in other words, the only way to get out of it is to cut consumption, Mr. Slosar says.

“Inflation is a very fluid, very dynamic thing,” Mr. Slosar said. “The inflation curve doesn’t like to be fixed.”

A growing chorus of critics has said that the company is spreading the inflation story to its customers, who seem to be under the impression that rising prices are good news.

“I have never seen a CEO tell the press and the shareholder that inflation will erode demand,” said Stephen Eisman, chief investment officer at Eisman Capital. “As an investor, I like to have solid data behind my hypothesis. John Slosar is telling shareholders something they need to hear.”

On Thursday, the consumer group Consumer Federation of America, which has advocated for stronger inflation regulation, said the company’s assertion that inflation is “a cyclical phenomenon” was factually false.

The price of gas has risen at an average rate of 1.3 percent per year in the United States since 2005, said CFA president and general counsel David Neumayr.

It would only be “extraordinary” if food prices held their own.

“There’s nothing extraordinary,” Mr. Neumay

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