A CPG trade group is weighing in on the issue of wholesale inflation. After months of rising costs and elevated inventory pressures, no reprieve is yet in sight for U.S. manufacturers, according to the Washington, D.C.-based Consumer Brands Association, which said the historic climb in producer prices is having a major impact on CPG companies.
“This is the 14th straight month that we’ve seen wholesale prices push above the historical trend line, and the CPG industry, like all industries and consumers, is exceptionally frustrated,” said Consumer Brands President and CEO Geoff Freeman in a news release. “The percentages may fluctuate month-to-month, but the story has remained the same—the cost to make and ship goods is out of control.”
The April Producer Price Index (PPI) pegged wholesale inflation at 11% year over year. Further, on a month-to-month basis, producer prices overall were up 0.5% from March and food wholesale prices rose by 1.5%. Since 2019, wholesale prices for the CPG industry are up 35%, according to Consumer Brands
The rising cost of diesel fuel (up 85% over the year-ago period) will continue to hit the CPG industry hard, as it relies on freight transportation, Consumer Brands noted.
At an item level, a wide range of ingredients and materials have seen huge wholesale price spikes over the past year—among them eggs (up 161%), wheat (up 85%), aluminum (41%); oils (41%); and corn (32%). About 70% of the costs that CPG companies pay are from energy and ingredients, according to Consumer Brands.
The latest producer-price numbers "reflect the persistent and challenging cost environment that CPG companies are facing and further reinforce the urgency of shoring up the supply chain to provide consumers with much-needed relief," Freeman said in a statement.
The CPG industry, noted Consumer Brands, accounts for more than 20 million American jobs.