Food Companies Were Finally Playing Nice on Prices — Then Geopolitics Blew It All Up

Just as grocery relief started showing up, geopolitics pulled the rug again. Food companies had spent years raising prices, and consumers had finally forced a change. PepsiCoPEP

was gearing up for snack price cuts of up to 15%, while Kraft HeinzKHC

acknowledged its pricing had turned “unfriendly” to shoppers. Then Iran’s seizure of the Strait of Hormuz sent oil higher, pushing up fertilizer and plastic resin costs since late February.

• Freight is adding to the squeeze, with diesel above $5 a gallon in the US, up ~40% since late February, lifting trucking surcharges and pressuring forecasts.
• The pressure is also evident in coffee, where green coffee prices have risen ~50% to $4.50 per pound in 2025, driven by crop failures, tariffs, and increased hedge fund activity.

The verdict: RBC’s Nik Modi warned it will be “much harder” for companies to push price hikes this time after overdoing it last cycle, with many now realising they “went a little too far.” Barclays’ Warren Ackerman added that “energy-led inflation shocks are particularly corrosive” for consumer confidence. With ~90-day retail lags before prices can adjust, any relief is distant, and consumers traumatized from past shocks aren’t willing to take another hit.