The price hikes are being planned amid an estimated $300 million in extra costs from pricier commodities and freight.
The first round of increases, implemented in the first quarter, hit consumer products including Hefty waste bags, its Reynolds baking products and the Presto storage brand. The second round, which will mostly go into effect in May, will not include Hefty, but that brand will see another hike in the third quarter, Reynolds executives said on a conference call.
The rapid pace of the increases was a talking point on the call, with one analyst noting during the Q&A that “three price increases wouldn’t be typical, right?” But with soaring input costs, including aluminum, and rising demand as many Americans cook more at home, the company said retailers and consumers were accepting the increases.
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Consumer prices are going up across the board. Rival Clorox Co. said last week it’s planning to increase prices for its Glad products in July—and more hikes could be on the way. The Bloomberg Commodity Spot Index — which tracks 23 raw materials—is at its highest level in almost a decade.
Reynolds said the size of the next increases will be determined by the level of commodity costs changes, without specifying a percentage amount. With the second round of hikes going into effect now, the company expects high single-digit revenue growth in the second quarter from a year earlier.