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New York (CNN Business) -
Get ready to pay even more for the things you love most in your shopping cart.
Major snack makers Kraft Heinz and Mondelez say they will increase prices for retail customers on Kraft Mac & Cheese, Jell-O, Bagel Bites, Cool Whip, Toblerone, Sour Patch Kids and other items starting next year. . If the customers of these companies - such as department stores, supermarkets, pharmacies and others - decide to pass on those increases, the buyers' wallets will be affected, as with the higher prices for pork, meat of res and other items.
"Retailers may want to absorb some of the price increase to remain competitive," said Neil Saunders, managing director of GlobalData Retail.
But "many of them will not, because they have their own cost increases," he said.
"Much [of the price increase] will likely pass to the consumer."
Bagel Bites snacks and other items are getting more and more expensive for retailers.
Like most American companies, manufacturers of food and consumer products face higher costs for labor, raw materials, transportation, and other expenses. Many have responded in recent months by increasing prices, reducing production of ancillary items, and limiting the number of products that retail customers can purchase. And they are seeing that, so far, consumers are willing to pay.
The pandemic has led to increased demand for snacks and sweets as shoppers spend more time at home and sometimes eat out of stress.
But prices for snacks and sweets have lagged behind rising food prices overall.
In September, grocery prices rose 4.5% from the same month last year, according to the latest data from the Bureau of Labor Statistics.
Snack prices increased 1.9% in September, while candy and gum prices increased 2%.
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Now, even higher prices for comfort foods are likely as companies try to combat lingering cost pressures.
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A regional grocery store distributor received a letter from Kraft Heinz dated November 1 notifying the company that it will increase prices starting January 9 on hundreds of items.
Products include a variety of Jell-O jellies and puddings, which will increase between 7% and 16%;
Bagel Bites frozen snacks, which will increase by approximately 10%;
and a variety of Cool Whip products, scheduled to increase between 7% and 10%.
Kraft mac and cheese are becoming up to 20% more expensive for retailers.
Dozens of versions of Kraft Mac & Cheese will see price increases, from a 3.5% increase for a pack of EZ Mac to 20% for a 205 gram bowl of Kraft's Big Bowl Mac & Cheese.
The distributor shared the letter on the condition of anonymity to protect the company's relationship with suppliers.
Strong demand, supply constraints and uncertainty increased input costs for Kraft, the company said in the letter, adding that "the upward trend in packaging, transportation, ingredient and labor costs persists, reaching levels not seen in decades. "
Those higher costs led the company to make the decision to raise prices.
In an email to CNN Business, a Kraft spokesperson did not say whether the price increases applied to all Kraft customers.
But the company has raised prices by an average of 5% on 80% of its products "to help offset the rising inflation facing the entire industry," the spokesperson said.
At the same time, Kraft is also introducing more affordable prices and sizes in brands like Lunchables, Mio, and Kraft Mac & Cheese.
"A continuous desire for comfort"
Meanwhile, Mondelez, which makes Oreos and Ahoy in addition to candy, said "we've been raising prices and plan to raise prices more than we have ... probably for quite some time as a company," said CEO Dirk Van de Put during a call Tuesday to discuss the company's third-quarter results.
According to Mondelez, a price increase of 6% to 7% will take effect in the US in January 2022.
The company provided details on some products that will be affected in a Nov. 1 email letter to the grocery distributor, which was seen by CNN Business.
The letter states that as of January, a wide variety of Toblerone bars would be approximately 7% more expensive.
The price of Sour Patch Kids bags of about 280 grams will also increase by 5.9%.
Demand for Mondelez products has been strong.
Consumers "have an ongoing desire for comfort, Van de Put said on the earnings call.
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And that demand does not appear to be decreasing as prices rise, Van de Put noted, saying that consumers have almost no elasticity at the moment, meaning their spending habits are not changing the way prices are.
In fact, shoppers seem to be accepting higher prices for comfort foods, for now.
McDonald's expects its menu prices to be about 6% higher in 2021 compared to 2020, CEO Chris Kempczinski said during a recent call with analysts.
The increase "has been quite well received by clients" so far, he said.
Chipotle has also been able to raise prices without being punished by customers.
Consumers may be willing to spend more to get the snacks they love, GlobaData's Saunders noted.
People who love Oreos, for example, "probably don't want to stoop to what they see as an unsatisfactory alternative."
But companies still need to be careful about raising prices, because at a certain threshold, even loyal customers can end up buying less rather than switching brands, he said.
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